BALIA, J. - (1.) THESE two revisions are filed by the came dealer registered under the Central Sales Tax Act arising out of common order passed by the Rajasthan Tax Board, Ajmer in Appeal Nos. 477/96/cst/ganganagar and 478/96/cst/ganganagar relating to the assessment periods 82-83 and 85-86. The appeals were decided by the Board on 16. 1. 99.
(2.) THE question relates to levy of Central Sales Tax on the rice sold by the Dealer in the course of inter-State trade or commerce, where the Dealer has paid tax on paddy, from which rice is manufactured, at the rate of 3% under the Rajasthan Sales Tax Act. At the time of assessment the assessee has claimed that he is entitled to exemption from the payment of tax on rice sold in the course of inter-State trade or commerce in the present case because he is governed by notification No. 324 F. 4 (67)FD/gr. IV/76-25 dt. 8. 9. 1976 issued u/s. 8 (5) of the Central Sales Tax Act, 1956 (Annexure/6 ). THE assessee has claimed that he has paid full tax prescribed under the Rajasthan Sales Tax Act on the paddy at the rate of 3% without reference to Section 5c of the Rajasthan Sales Tax Act. He is not liable to pay any tax on the sale of rice sold in the course of inter-State trader or commerce under the aforesaid notification. It has been case of the revenue that there is another notification of the same date (Annex. /5) produced along with petition which provides where tax has been levied under the Rajasthan Sales Tax Act, 1954, in respect of paddy, the tax leviable under the said Act on rice procured out of such paddy, shall be reduced by the amount of tax levied on such paddy. According to revenue such turnover of rice was subjected to tax at the rate of 3% and his liability was reduced by adjusting the amount of tax paid by the assessee on paddy under the Rajasthan Sales Tax Act. Annex. /5 being the notification specially covering the tax on paddy and rice, the notification (Annex. /6) is not applicable to the petitioner. Accordingly the Assessing Authority charged tax @ 3% on the turn over relating to sale of rice in the course of inter-State trade or commerce in question. The appeals against levy of tax on rice has been dismissed by the Dy. Commercial as well as by the Rajasthan Tax Board. Hence these petitions. It would be appropriate at this juncture to reproduce relevant part of notification No. 23 dt. 8. 9. 76 issued u/s. 5 of the Rajasthan Sales Tax Act prescribing rate of tax on paddy, rice and wheat and other foodgrains. S. No. 322: F. 4 (67)FD/gr. IV/76-23 dt. 8. 9. 1976: S. O. 127:-In exercise of the powers conferred by S. 5, RST Act, 1954, and in supersession of all previous notifications (S. No. 258-item 1 and others) issued in this behalf under this section, the State Govt. hereby notifies that with immediate effect the rate of tax payable by a dealer in respect of the goods specified in column 2 of the list annexed hereto shall be as shown against them in column 3 of the said list. Item No. Description of goods Rate of Tax 1. Paddy, rice and wheat in all their forms including Atta (flour) and bran thereof but excluding Maida,, Suji,, wheat-flakes and Sewaiyan 3% Provided that where tax has been levied in respect of paddy,, the tax leviable on rice procured out of such paddy,, shall be reduced by the amount of tax levied on such paddy. Explanation: For the purpose of this entry,, "bran of rice" shall also include "rice polish. 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The notification (Annex. 5) No. 24 dt. 8. 9. 1976 issued in exercise of powers conferred u/s. 8 (5) of the CST Act prescribes rate of tax chargeable on the said commodity under the CST Act and notification no. 25 dt. 8. 9. 1976 (Annex. /6) was also issued by State Government in exercise of powers conferred u/s. 8 (5) of the CST Act directing that no tax shall be paid on commodities mentioned therein on the condition stated in the notification. The two notifications read as under:- ANNEXURE/5. S. No. 323: F. 4 (67) FD/gr. IV/76-24 dated 8. 9. 1976 as corrected by corrigendum dated 18. 9. 1976. S. O. 128:-In exercise of the powers conferred by S. 8 (5), CST Act, 1956, hereinafter referred to as the said Act, the State Govt. (2) hereby directs that the tax payable by any dealer having his place of business in the State in respect of sale by him from any such place of business in the course of inter-State trade or commerce in respect of:- 1. Paddy, rice and wheat in all their forms including Atta (Flour) and bran thereof but excluding Maida, Suji, wheatflakes and Sewaiyan shall be calculated at the rate of three per cent. Provided that where tax has been levied under the RST Act, 1954 in respect of paddy, the tax leviable under the said Act or rice procured out of such paddy, shall be reduced by the amount of tax levied on such paddy; (Explanation:-For the purpose of this item, "bran of rice" shall also include "rice polish" ). 2. . . . . . . . . . . . . . . . . . . . . . 3. . . . . . . . . . . . . . . . . . . . . . 4. . . . . . . . . . . . . . . . . . . . . . This shall have immediate effect. ANNEXURE/6: S. No. 324: F. 4 (67)FD/gr. IV/76-25 dt. 8. 9. 1976 S. O. 129:-In exercise of the powers conferred by S. 8 (5), CST Act, 1956, hereinafter referred to as the said Act and in supersession of this deptt. notfn. No. F. 5 (25)FDCT/72-2 dated 26. 4. 1972, the State Government (2) hereby directs that no tax under the said Act shall be payable in respect of sale of paddy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in all their forms including. . . . . . . . . . . . . and Bran thereof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . by any dealer having his place of business in the State of Rajasthan, from any such place of business in the course of inter-State trade or commerce, on the condition that such dealer proves to the satisfaction of the AA that tax in respect of the said goods under the RST Act, 1954, has been paid otherwise than under S. 5c thereof. (Explanation:-For the purpose of this notfn. "bran of rice" shall also include "rice polish" ). This shall have immediate effect. Since the notifications have been issued u/s. 8 (5) of C. S. T. Act and refers to tax paid otherwise than u/s. 5c of R. S. T. Act the same may be noticed. SECTION 5c of RST Act reads during the relevant period: Concessional rate of tax for raw material:- (1) Notwithstanding anything contained in this Act, but subject to such restriction and conditions as may be registered, the rate of tax payable on the sale to or purchase by registered dealer of any raw material for the manufacturer in the State of goods other than exempted for sale by him within the State or in the course of inter-State trade or commerce or in the course of export outside the territory of India shall be at a concessional rate of 2% of the sale or purchase price of such raw material. Explanation:-For the purpose of this sub-section exempted goods means (i) goods exempted under sub-sec. (1) of Sec. 4, and (ii) goods liable to additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and which are exempt from the payment of tax by or under the provisions of this Act. (2) Where any raw material purchased by a registered dealer under sub-section (1) is utilised by him for any purpose other than a purpose specified therein, such dealer shall be liable to pay as penalty, such amount not less than the difference between the amount of tax on the sale of such raw material at the full rate applicable thereto under Sec. 5 and the amount of tax payable under sub-section (1) but not exceeding one and one quarter times the amount of tax at such full rate, as the assessing authority may determine, having regard to the circumstances in which such use was made. Sec. 8 (5) of the Central Sales Tax Act reads as under:- (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct- (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub-sec. (1) or sub-section (2) as may be mentioned in the notification; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce, by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at the such lower rates than those specified in sub-section (1) or sub-Sec. (2) as may be mentioned in the notification.
(3.) HERE it may be noticed that u/s. 5c of the State Act the concessional rate of tax on raw material was 1% until 3. 3. 82 and thereafter it was substituted by 2% vide Act No. 14 of 1982. With effect from 8. 3. 88, by Act No. 3 of 1988 the concessional rate u/s. 5c of the RST Act was increased to 3% from 2%. Entire period in question is within the span when general rate of tax on paddy was 3%. Under notification No. 23 referred to above and concessional rate of tax u/s. 5c was 2% of the turn over of paddy as raw-material for procuring rice. Notifications, Annex. /5 & Annex. /6 if read in the light of statutory provisions there remains no doubt about the purport of aforesaid three notifications respectively. Sec. 5 of the Rajasthan Sales Tax empowers the State Government to notify rate of tax payable by the assessee in respect `of its turn over and in respect of different commodities. Notification No. 23 (Annex. /2), is a notification prescribing rate of tax on sale of paddy, rice and other commodities, within State of Rajasthan. It has prescribed general rate of tax on rice @ 3%. ;