COMMISSIONER OF SALES TAX, JAMMU AND KASHMIR ETC. ETC .. versus M/S PINE CHEMICALS LTD. AND ORS. ETC. ETC.

Citation: [1994] SUPP. 5 S.C.R. 123 · Decided: 24-10-1994 · Supreme Court of India · Bench: M.N. VENKATACHALIAH · Disposal: Case Allowed

Judgment (excerpt)

COMMISSIONER OF SALES TAX, 
JAMMU AND KASHMIR ETC. ETC .. 
V. 
M/S PINE CHEMICALS LTD. AND ORS. ETC. ETC. 
OCTOBER 24, 1994 
[M.N. VENKA TACHALIAH, CJ, S. MOHAN AND B.P. JEEV AN 
REDDY, JJ.] 
A 
B 
Central Sales Tax Act-Sub-section (2A) of Section 8-J&K General 
Sales Tax Act-Government Order No. 159-/nd. dated March 26, 1971-
/nterpretation of Section 8 (2A) -Claim of benefit of sub-sec. (2A) of C 
Section 
8-Dealers assessees 
already 
granted exemption 
under 
Government Order No. 159-Whether benefit of sub-section (2A) is 
available even where goods are exempted with reference to industrial unit 
and for a specified period as granted under Government Order No. 159-
Held, No-Whether an exemption of the nature granted under Government D 
Order No. 159 is an exemption from the tax 'generally' within the meaning 
of Section 8 (2A) ·-Held, No. 
These petitions were filed seeking the review of this Court's 
judgment and Order dated January 16, 1992 in Pine Chemicals Ltd. and 
Ors. Etc. Etc. v. Assessing Authority and Ors. Etc. Etc.,(1992] 2 SCC 683. E 
By this judgment, this court allowed the appeals preferred by the 
dealers setting aside the judgment of the High Court, while holding that 
the dealers - assessees were entitled to claim the benefit of the provision 
contained in sub-section (2A) of Section 8 of the Central Sales Tax Act 
in view of the exemption granted to them under GQvernment Order No. 
159-Ind. dated March 26, 1971 passed under the Jammu and Kashmir F 
General Sales Tax Act. 
For attracting the exemption provided by the Government Order, 
it had to be established that the goads, the sale or purchase of which 
was claimed to be exempt from tax, were manufactured by a large or 
medium scale Industry and that the said goods were manufactured and G 
sold within five years from the date the said industrial unit had gone 
into production. 
The question for consideration is whether the Bench which decided 
Pine Chemicals was right in holding that the benefit of the said sub-
section was available even where the goods were exempted with H 
123 
124 
SUPREME COURT REPORTS 
[1994] SUPP. 5 S.C.R. 
A 
reference to industrial unit and for a specified period, viz., period of 
five years from the date the relevant unit goes into production. In other 
words, the question was whether an exemption of the nature granted 
under Government Order No. 159 was an exemption available "only in 
specifi,ed circumstances or under specified conditions" within the 
meaning of the explanation to Section 8 (2A), as contended by the State 
B 
or was it a case where the goods were exempted from the tax 
"generally" within the meaning of Section 8 (2A), as contended by the 
dealers. 
c 
D 
E 
F 
G 
H 
Allowing the review petition, this Court 
HELD : 1.1. The idea behind sub-section (2A) of Section 8 of the 
Central Sales Tax Act, is to exempt the sale/purchase of goods from the 
Central Sales Tax where the sale or purchase of such goods is exempt 
generally under the State Sales Tax Law. Sub-section (2A) requires 
specifically that such exemption must be a general exemption and not 
an exemption operative in specified circumstances or under specified 
conditions. The exemption under the Government Order No. 159 dated 
March 26, 1971, is not with reference to goods or a class or category of 
goods but with reference to the industrial unit producing them and their 
manufacture and sale within a particular period For the purposes of the 
Government Order, the nature, class or category of goods is irrelevant; 
it may be any goods. It is concerned only with the industrial unit 
producing them and the period within which they are manufactured 
and sold. In such a case it is not an instance where the sale is of goods, 
th~ sale or purchase of which is under Sales Tax Law of the appropriate 
State, exempt from tax generally. Exemption provided by Government 
Order No. 159 is not with reference to goods but with reference to the 
industrial unit. The exemption granted under the Government Order 
does not sat!sfy the requirements of Section 8 (2A). (129-B-F, 130-A) 
. Indian Aluminium Cables Ltd v. State of Haryana, (1976) 4 SCC 27 
and International Cotton Corporation (P) Ltd. Etc. Etc. v. Commercial Tax 
Officers and Ors., (1975) 3 SCC 585, relied on. 
1.2. The Bench in the judgment under review agreed that the 
existence or otherwise of the three limitations under the explanation 
referred to on claiming exemption under Section 8 (2-A) of t

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