DEVI DASS GOPAL KRISHEN LTD. AND ANR. versus STATE OF JAMMU AND KASHMIR AND ANR.

Citation: [2000] SUPP. 5 S.C.R. 325 · Decided: 01-12-2000 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Dismissed

Judgment (excerpt)

, 
DEVI DASS GOPAL KRISHEN LTD. AND ANR. 
A 
v. 
STATE OF JAMMU AND KASHMIR AND ANR. 
DECEMBER I, 2000 
[B.N. KIRPAL, DORAISWAMY RAJU AND BRIJESH KUMAR, JJ.] 
B 
Constitution of India- -Articles 301 and 304 Discrimination-Local 
manufactures of edible oil exempted from sales tax--Outside manufactures 
not exempted-Tax raised to 8% from 4%---0utside manufacturers realizing 
tax at the rate of 4%---Exemption inf avour of local manufacturers declared C 
invalid by Court with prospective effect from 1.4.1997- ·Outside manufacturers 
claiming parity and seeking exemption from payment of enhanced rate till 
31.3.1997--Held, cannot be granted--Jammu and Kashmir General Sales 
Tax Act, 1962---Section 4(/)--Sales Tax. 
The appellants manufactured edible oil in the State of Punjab and D 
Haryana and sold the same in the State of Jammu and Kashmir. Initially 
sales tax was levied on edible oils in the State of Jammu and Kashmir at the 
rate of I%, which was subsequently raised to 4% in the year 1989. By a 
notification dated March 7, 1991 issued under Section 5 of the Jam mu and 
Kashmir General Sales Tax Act, 1962, all units manufacturing edible oil in E 
the State of Jammu and Kashmir were granted exemption from sales tax. 
However, those manufacturing edible oil outside the State of Jammu and 
Kashmir were denied such benefit. Later on, by another notification dated 
27.6.1994 the sale tax in respect of edible oil was further enhanced to 8%. 
The appellants filed a writ petition before the High Court assailing the F 
total exemption granted to manufacturers within the State contending that 
it was hit by the provisions of Articles 301 and 304 of the Constitution of 
India. 
While the writ petition filed by the appellants was still pending before 
the High Court this Court in Shree Mahabir Oil Mills & Anr. v. State of J G 
& K & Ors., 11996111 SCC 39 held that the unconditional exemption from 
sales tax granted by the State to the edible oil produced within the State, 
while subjecting the same produced in other States to sales tax at the rate 
of 8%, was discriminatory and violative of Article 304(a) of the Constitution 
oflndia. This Court, however, directed that the declaration of invalidity of the H 
325 
326 
SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R. 
A notification dated 7.3.1991 would take effect only on and from l.4.1997 and 
that the notification would be effective and operative till 31.3.1997. 
The appellants thereafter, claiming parity with the local manufacturers, 
prayed that they should also be exempted from depositing the balance amount 
of sales tax for the period prior to 31.3.1997. The appellants claimed that 
B they had been realizing sales tax only at the rate of 4% instead of 8% and 
it would be unjust to recover the balance 4% from them. The High Court 
rejected the prayer of the appellants. 
The appellants filed the present appeal against the order of the High 
C Court. 
Dismissing the appeal, the Court 
HELD : l. The mere fact that the appellants had not been realizing the 
sales tax at the rate of 8% but only at the rate 4% would not justify their 
D demand that they may not be required to deposit balance 4% of the sales 
tax. At no stage in any proceeding whatsoever there had been any interim 
order from any Court or any other direction of any authority, by reason of 
which or in consequence whereof the appellants may not have been required 
to realize the sales tax at the rate of 8% but only at the rate of 4%. It was 
their voluntary act that they opted not to realize the sales tax at its full rate 
E of 8% but only to the extent of 4%. [330-D, El 
2. The manufacturers of edible oil in the State of Jam mu and Kashmir 
were exempted from payment of sales tax by virtue of notification dated 
7.3.1991 issued under S.5 of the Act. Exemption from payment of the sales 
tax is permissible under the said provision. That being the position, the local 
F manufacturers had no reason or right in law to realize the sales tax from 
the customers and therefore they had not realized the same. But so far it 
concerns the appellants they had not been enjoying any such concession nor 
there was any order in operation by virtue of which they were not required 
to realize the whole amount of sales tax. On the other hand, under law they 
G were required to realize at the rate of 8%, throughout, which has not been 
found to be illegal by any court. [330-G, H, 331-A, BJ 
3. It has nowhere been challenged that sales tax c

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