K.C.AGRAWAL, C.J. - (1.) THIS revision (along with other 10 revisions) under Section 15 (1) of the Rajasthan Sales Tax Act, 1954 is directed against the order dated December 1, 1988, passed by the Rajasthan Sales Tax Tribunal, Ajmer in Revision Petition No. 584 of 1984 (71/85) ST/ Bikaner: M/s Khadi Mandir v. CTO, Special Circle, Bikaner.
(2.) THE petitioner M/s Khadi Mandir New Public Park, Bikaner is a society registered under the Societies Registration Act, 1957 and is recognised by All India Khadi & Village Commission. It is a registered dealer under Rajasthan Sales Tax Act, 1954 (hereinafter referred to as 'the State Act') as well as Central Sales Tax Act, 1956 (hereinafter referred to as 'the Central Act' ). For the assessment year 1977-78 (from 1-4-77 to 31-3-78) the Commercial Taxes Officer, Special Circle, Bikaner, assessed the petitioner under the provisions of the Central Act. The Commercial Taxes Officer held that sales of jerseys and sweaters made of Khadi were not generally exempt under the State Act, consequently, the petitioner's estimated inter-state sales of jerseys and sweaters made of Khadi was of Rs. 13,57,219/. He imposed tax at the rate of 10 per cent on the said sales. Against the assessment order, an appeal was filed before the Deputy Commissioner (Appeals), Commercial Taxes, Bikaner, who affirmed the judgment and order of the Commercial Taxes Officer holding that the petitioner was not entitled to the benefit of Section 8 (2a) of the Central Act and found that on the inter-state sales of jerseys and sweaters tax was not exempt. Feeling aggrieved by the aforesaid judgment the petitioner filed revision petition before the Board of Revenue, which was later on transferred to Rajas-than Sales Tax Tribunal. This revision was heard along with other similar revisions and was decided by a common judgment and order dated 1. 12. 1988. The Tribunal dismissed the revisions. Against, this decision of the Tribunal, the present revision under Section 15 (1) of the State Act was preferred, inter alia, on the grounds that: (i) because inter State-sales of jerseys and sweaters made of Khadi are exempt from tax under Section 8 (2a) of the Central Act on account of the fact that they are unconditionally exempt under Entry no. 6 of the Schedule annexed to the State Act, hence, the Tribunal as well as other authorities below erred in holding that the petitioner was not entitled to exemption: (ii) because under a notification no. F5 (37) FDCT/66/1 dated 31-12-1966 issued under Section 4 (2) of the State Act read with Section 8 (2a) of the Central Act Sales of jerseys and sweaters made of Khadi were exempt unconditionally and, consequently, covered by the expression 'generally exempted' under Section 8 (2a) of the Central Act: (iii) because Entry No. 6 of the Schedule of the State Act being blank, the mentioning of the certain words in the description of goods for their identification did not amount any condition on the exemption inasmuch as the circumstances specified in Entry No. 6 of the notification dated 31-12-66 merely identification was described industry entitled to the exemption. Such a description could not be construed as a condition for exemption.
(3.) NOTIFICATION No. 114 : F. 5 (37) FECT/66-1 dated 31-12-1966 reads as under: "in exercise of the powers conferred by sub-section (2) of S. 4 of the RST Act, 1954, the State Govt. hereby exempts the sale of garments and other articles made of Khadi cloth, and hand-spun yarns when sold by Khadi Bhandar certified as such by the All India Khadi and Village Industries Board. " Section 4 (2) of the State Act reads as under: "where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, the State Government may, by notification in the official gazette (exempt whether prospectively or retrospectively) from tax the (sale or purchase) or any person or class of person on such conditions and on payment of such fee as may be specified in the notification. " The controversy in the instant case is whether the petitioner was entitled to the benefit of Section 8 (2a) of the Central Act. This provision deals with sales in the course of inter-State trade or commerce. The relevant provision of this Section, along with Explanation, is reproduced below: "notwithstanding any thing contained in sub-section (1 A) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sale tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than 4 (four per cent) (whether called a tax or fee or by any other name, 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 any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate state if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified condition or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. " ;