SEN - (1.) THIS case arises out of a Gazette Notification dated 9/01/1970 issued by the Government of Uttar Pradesh granting exemption from payment of sales tax to various newly set up industrial undertakings. The notification was to the following effect:- "Whereas, it has been brought to the notice of State Government that the seven Industrial Units mentioned in Schedule below have started the manufacture of goods mentioned in Column II of the Schedule with effect from the date noted against each; And, whereas, the State Government is of opinion that it is necessary so to do for increasing the production of the said goods manufactured by the said Industrial Units; Now therefore, in exercise of the powers under Section 4-A of the U.P. Sales Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor is pleased to declare that the turnover in respect of the said goods manufactured by the said Industrial Units shall be exempt from payment of sales tax for a period of three years with effect from the date of publication of this notification in the official Gazettee; JUDGEMENT_84_8_1996Html1.htm
(2.) AS a result of this notification, the notified goods became exempt from sales tax with effect from February, 1969 for a period of three years from the date of publication of the notification in the official Gazette. The claim of the respondent, Hindustan Safety Glass Works (P) Ltd. is that it was entitled to exemption from payment of tax under the Central Sales Tax Act by virtue of the provisions of Section 8(2A) of the Central Sales Tax Act before its amendment by Act No. 61 of 1972 which came into force with effect from 1-4-1973. The position after the amendment came was examined by this Court in the case of Commissioner of Sales Tax, J and K v. Pine Chemicals Ltd. (1995) 1 SCC 58; (1995 AIR SCW 1717). In that case, it was held that where the sale or purchase of the goods was exempt generally under the State Sales Tax Law, the benefit of the exemption under Section 8(2A) of the Central Sales Tax Act would be available to an assessee. But, if the exemption granted was not of general nature, then the assessee could not claim the benefit of any exemption provided by Section 8(2A). In that case, the Government Order No. 159 provided exemption to large and medium scale industries in the State of Jummu and Kashmir from payment of sales tax both on raw materials and finished products for a period of five years from the date on which the unit went into production. By a subsequent Government Order dated 25-8-1971, the earlier order was modified and it was provided that the State sales tax paid by large and medium scale industries on the raw materials procured by them for the initial five years of the production would be refunded to such industries. Similarly such industries were granted exemption from payment of State Sales Tax on their finished products for a period of five years from the date the unit went into production. It was pointed out in that case that because of the aforesaid Government Order the assessee could not claim benefit of exemption under Section 8(2A) of the Central Sales Tax Act because the exemption was not a general one, the exemption under Government Order No. 159 was not with reference to goods or a class of category of goods, but with reference to an industrial unit producing them and their manufacture and sale within a particular period. In the instant case, the exemption has not been granted to the goods generally. Specified goods (mirrors and toughened glass) produced by a specified company have been exempted from payment of sales tax for a specified period of time. It is not the case of the assessee that mirrors and toughened glass have been generally exempted from payment of tax. Therefore, in view of the ratio laid down in the aforesaid case of Commissioner of Sales Tax v. Pine Chemicals Ltd. (1995 AIR SCW 1717), (supra), it must be held that the assessee will not be entitled to get benefit of Section 8(2A) of the Central Sales Tax Act in the facts of this case.
(3.) ON behalf of the respondent, it has been contended by Mr. Raja Ram Agarwal that sub-section (2A) of Section 8 of the Central Sales Tax Act was amended with effect from 1-4-1973. He drew our attention to the language of the section before its amendment, which was as under:- "8(2A). Notwithstanding anything contained in sub-sec. (1) or sub0section (2) if under the sales tax laws of the appropriate State the sales or purchases as the case may be, of any goods by a dealer is exempt from tax generally or is subject to tax generally at a rate which is lower than two percent (whether called a tax or fee or by any other name), the tax payable under this Act on his turnover in so far as the turnover or any part thereof, relates to the sale of such goods shall be nil or as the case may be, shall be calculated at the lower rate. Explanation : For the purposes of this sub-section a sale or purchase of goods shall not be deemed to be exempt from tax generally under the sale tax law of the appropriate State if under that law it is exempt only in specified circumstances or under specified conditions or in relation to which the tax is levied at specified stages or otherwise than with reference to the turnover of the goods." It has been contended that under the old Act the exemption was in respect of a dealer whereas under the amending Act exemption was in respect of goods. Under the repealed provisions, it would have been sufficient if a dealer was exempted from payment of tax generally. It was not necessary to establish that exemption had to be granted to the goods in order to get the benefit of the provisions of Section 8(2A).;