LexINDIAN ALUMINIUM CABLES LTD. versus STATE OF HARYANA
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E • F G H 992 INDIAN ALUMINIUM CABLES LTD. v. STATE .OF HARYANA April 2, 1976 [A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.] Exemption froni tax liability-General Tax exemption--Central Sales Tax .A.ct (74 of 1956)-Section 8(2A) and Explanation thereto-Meaning of "exempt from tax geenrally". Punjab Sales Tax Act-Section 5(2) (a) (iv) -Nature of exemption granted under the Section-Whether in specified circuni· stances or under specified conditions. Under section 5(2)(a)(iv) of the Punjab Sales Tax Act "taxable turnover" meant that part of a dealer's gross turnover during any period which remains after deducting therefrom, his turnover during ·that period on sales to any undertaking supplying electrical energy to the public under a licence or sanc- tion. granted under the Indian Electricity Act, 1910. of goods for use by it in the generation or distribution of such energy. Under section 8 of the Central Sales Tax, every dealer~ who in the course 4t of inter state trade or commerce sells to the Go~ernment any goods; or sells to a registered dealer other than the Government goods of the description referred to in sub section ( 3) shall be liable to pay tax under the Act, which shall be three per cent of his turnover. Section 8(2A) reads as follows:- "Notwithstanding anything contained in sub-section (IA) of section 6 or sub section (1) or sub section (2) of this section, the tax pay- able under this Act by a dealer on his turnover in so far as the turn- over or any part thereof relates to the sale of any goods, the §ale or, as the case may be, the purchase of which is. under the sales tax law of the appropriate state, exempt, from tax generf!llY, or subject to tax ~enerally at a rate which is lower than three per cent, (whether called a tax or fee or by any other name), shall be riil or, as the case may be, shall be calculated at the lower rate. Explanation : For the purpose of this sub-section or 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 the law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or vurchase of such g_9ods is exempt only in specified circumstances or under speci- fied conditions 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." The appellants were suppliers of poles and cables to the Delhi Electric Sup_ply Undertaking and the sales were in the course of inter state trade or commerce and admittedly exempt under the state sales tax u/s 5(2)(a)(iv)'. The state assessed tax u/s 8 of the Central Sales Tax Act, 1956 on the ground that the exemption granted ufs 5(2)(a)(iv) of the state Act fell under Explana- tion to s. 8(2A) of the Central Sales Tax Act. The High Court held that the sales by the undertaking supplying electrical energy were not exempt from tax generally within the meaning of section 8 ( 1A) of the Central Act read with section 5(2)(a)(iv) of the State Act. Dismissing the appeal, by special leave, the Court. HELD : (1) General exemption means that goods should be totally exempt from tax before similar exemption from the. levy of central s~es .tax can become available. Where the exemption from taxation is conferred by condi- tions or in certain circumstances there is no exe1nDtion from tax generally. Section 6 of the State Act does not speak of exemption but deals with tax free goods. Section 6 deals with specified goods on '\Vhich no tax is: payable~ I INDIAN ALUMINIUM CABLES v. H"-RYANA (Ray, CJ.) 993 Section 5 of the State Act deals with what has to be excluded from taxable turnover of the dealer. Both the sections deal with goods which do not sulfer from sales tax. Section 8(2A) of the Central Act exempts goods from inter state sales tax where a tax law of the state has exempted them from sales tax. The explanation to section 8(2A) of the Central Act takes away the exemption where it is not general and has been granted in specified circumstances or under •pecified conditions. The provisions contained in section 5(2)(a)(iv) of the state Act exclude sales which are made under specified circumstances or speci- fied conditions. The specified circumstances are that the sale ml!St be to an undertaking engaged in supplying electrical ene
Excerpt shown. Read the full judgment & AI analysis in Lexace.