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2008 DIGILAW 1319 (ALL)

COMMISSIONER, TRADE TAX v. DENAJI SANSTHAN.

2008-07-11

PRAKASH KRISHNA

body2008
JUDGMENT Prakash Krishna, J. - These four revisions relate to the assessment years 1990-91 (U.P. and Central), 1991-92 (Central) and 1992-93 (Central). All these revisions were heard together and are being disposed of by a common order as learned counsel for the parties have jointly agreed that identical controversy is involved in all the revisions. The dealer - opposite party deals in a business of manufacture and sale of shampoo. In view of the Notification No. 7073 dated January 31, 1985 the dealer - opposite party claimed exemption on its turnover of Central sales claiming itself as an institution certified by the U.P. Khadi and Village Industries Board. The said claim was denied by the assessing officer on the ground that the production and sale of shampoo is exempted under the aforesaid notification. It was of the view that the goods in question are not generally exempt under the Trade Tax Act on specified conditions, otherwise are taxable under the Trade Tax Act. Therefore, in respect of Central sales, the dealer opposite party would be liable to pay the tax. The matter was carried to the Tribunal ultimately. The Tribunal by the impugned orders took the view that since the turnover of the dealer - opposite party has been exempt from tax generally under the U.P. Trade Tax Act, 1948 the tax on the Central sales shall be nil. It placed reliance upon the circulars, mentioned in the orders issued by the Commissioner granting exemption to such dealers issued under the Central Sales Tax Act, 1956 also, whose turnover is exempt being an institution under the Khadi and Village Industries Board, U.P. Challenging the legality and validity of the said order the present revisions have been filed. In T.T.R. No. 387 of 2000 which was considered by the counsel for the parties as the leading case relevant to the assessment year 1991-92 (Central) the following questions of law have been sought to be raised : 1. Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to declare the goods in question exempted under notification No. 7037 dated January 31, 1985 despite the fact the goods in question are not exempt from tax generally for the purposes of section 8(2A) of the Central Sales Tax Act, 1956 ? 2. 2. Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to declare the goods in question exempt from tax contrary to the law declared by honourable Supreme Court in the matter of Commissioner, Sales Tax, Jammu Kashmir v. Pine Chemicals [1995] 96 STC 355; [1995] UPTC 609 ? Considered the respective submissions of the learned counsel for the parties and perused the record. The learned standing counsel submits that in view of section 8(2A) of the Central Sales Tax Act, 1956 the goods in question being not generally exempt under the U.P. Trade Tax Act, 1948 the Tribunal was legally incorrect to grant exemption in respect of Central sales to those goods. The contention is that the exemption has been granted to the dealer - opposite party on the turnover of the goods in question as the dealer - opposite party is an institution certified by the U.P. Khadi and Village Industries Board. The exemption granted on the turnover of such goods is not a general exemption for the purposes of section 8(2A) of the Central Sales Tax Act, 1956. There is no difficulty to accept the said argument of the learned standing counsel. However, there is another aspect of the case. There were Circulars Nos. Vidhi-10-(1)-77-78/1178/Mukhyalay dated May 7, 1977 and vidhi-Doa-10(1)(87-88) 956/Mukhyalay, dated July 23, 1987 which provide exemption from Central sales tax in respect of the institution under the Khadi and Village Industries Board, U.P. These circulars were matter of consideration by a learned single judge of this court in Commissioner, Trade Tax, U.P., Lucknow v. Bhartya Charmodhyog Sangh [2008] 16 VST 67; [2007] 33 NTN 340. It has been held that in view of the law as laid down by the apex court that though the circulars may be contrary to the statute, it is not open to the Commissioner of Trade Tax to contend that the circulars referred to above are not binding on it. It has been further laid down that so long as the circular stands and is not withdrawn the Revenue authorities cannot take a different stand contrary to the circular. The learned standing counsel could not point out any distinction to take a view different from the one taken in the case of Commissioner, Trade Tax v. Bhartya Charmodhyog Sangh [2008] 16 VST 67 (All); [2007] 33 NTN 340. The learned standing counsel could not point out any distinction to take a view different from the one taken in the case of Commissioner, Trade Tax v. Bhartya Charmodhyog Sangh [2008] 16 VST 67 (All); [2007] 33 NTN 340. Respectfully following the said judgment, it is held that the Tribunal has not committed any mistake in holding that Central sales at the hands of the dealer - opposite party is also exempt in view of the circulars referred to above. I find no illegality in the orders of the Tribunal. All the revisions are hereby dismissed. No order as to costs.