R.C.LAHOTI - (1.) IN exercise of the powers conferred by sub-section (5) of Section 8 of the Central Sales Tax Act, 1956, the Government of Madhya Pradesh issued a notification No. F. No. A-3-41-81 (31)-ST-V, dated the 29/06/1982 allowing exemption from payment of tax to certain dealers subject to the satisfying the requirements of the notification. The relevant part of the notification reads as under :- NOTIFICATION F. No. A3-41-81 (31)-ST-V, dated the 29/06/1982. Whereas, the State Government is satisfied that it is necessary so to do in the public interest; Now, therefore, in exercise of the powers conferred by sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (No. 74 of 1956), the State Government hereby directs that no tax under the said Act shall be payable with effect from the 1/07/1982, by the dealers specified in Column (1) of the Schedule below, who have set up industry in any of the districts of Madhya Pradesh specified in the annexure to this notification (. . . . . . . . . . . .) in respect of sales in the course of inter-State trade or commerce of goods produced manufactured by them, for the period specified in Column (2), subject to the restrictions and conditions specified in Column (3) of the said Schedule :- JUDGEMENT_148_SCALE1_2000Html1.htm
(2.) THE respondent, a public limited company, is a new industrial unit engaged in manufacture and sale of paper at Champa in the backward tribal area of District Bilaspur in the State of Madhya Pradesh. It is not disputed that the respondent industrial unit satisfies the requirements of Columns (2) and (3) of the notification. It is also not disputed that the respondent was registered as a dealer under the M. P. General Sales Tax Act, 1958 as also under Section 7(2) of the Central Sales Tax Act, 1956. THE registration under the Central Sales Tax Act is dated 12-11-1981. Having taken into consideration the two sales tax registrations as 'dealer' under the two Acts i.e., the State and the Central Acts, the Directorate of Industries issued a certificate of eligibility dated 19-2-1985 for exemption from payment of sales tax whereby it was certified that the respondent was a new unit having gone into production on 10-1-1984 i.e. after 1-4-1981 and as such eligible for exemption from payment of sales tax. It was also certified that the unit being located in District Bilaspur - category Backward 'A', was eligible for exemption for the period up to 9-1-1987. The Assistant Commissioner of Sales Tax formed an opinion that for the purpose of claiming benefit of the exemption notification a dealer registered under the State Act has also to be registered under sub-section (1) of Section 7 of the Central Sales Tax Act but the respondent was registered under sub-section (2) and not sub-section (1) of Section 7 of the Central Sales Tax Act and therefore was not entitled to the benefit of the exemption notification dated 29-6-1982. The Appellate Deputy Commissioner agreed with the Assistant Commissioner. In an appeal preferred by the respondent the Board of Revenue reversed the finding of the authorities below and held that on the basis of the certificate of eligibility issued by the Directorate of Industries, the respondent was entitled to exemption from payment of sales tax and therefore the assessment and consequential penalty were unwarranted. At the instance of the Revenue the following question was stated for the opinion of the High Court under Section 44 of the M. P. General Sales Tax Act :- "Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the dealer is eligible to avail of the exemption under Separate Revenue Department Notification No. A-3-41-81-(31)-ST-V, dated 29-6-82 in respect of the Inter State sale of goods manufactured by him by virtue of his holding an eligibility certificate in fulfilment of one of the conditions laid down in the said notification for eligibility, although he was not holding a Registration Certificate under sub-section (1) of Section 7 of the Central Sales Tax Act, 1956."
(3.) THE High Court of Madhya Pradesh has answered the question in favour of the respondent-assessee forming an opinion that the eligibility certificate issued by the Directorate of Industries was conclusive and binding on the assessing authorities and they could not go into the question whether the respondent-assessee was eligible for the benefit of exemption in spite of his holding the eligibility certificate by entering into the question of the respondent's registration whether it was under sub-section (1) or (2) of Section 7 of the Central Sales Tax Act. Feeling aggrieved the Revenue has come up in appeal before this Court. It was submitted by the learned counsel for the appellant that on a full reading of the notification and placing a reasonable construction thereon the expression - ". . . . . . . . registered under the Central Sales Tax Act, 1956", as employed in the first column of the notification should be understood as meaning the registration under sub-section (1) of Section 7 of the Central Sales Tax Act; registration under sub-section (2) of Section 7 of the Central Sales Tax Act is not covered by the expression and is of no relevance for the purpose of claiming exemption under the notification.;