M/S. CASIO INDIA CO. PVT. LTD. versus STATE OF HARYANA

Citation: [2016] 2 S.C.R. 791 · Decided: 29-03-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2016] 2 S.C.R. 791 
. MIS. CASIO INDIA CO. PVT. LTD. 
V. 
STATE OF HARYANA 
(Civil Appeal No. 1410 of2007) 
MARCH29,2016. 
[DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.) 
Central Sales Tax Act, 1956: s.8(5) - Whether the notification 
dated 04.09.1995 issued under s.8(5) of the CST Act is relatable to 
the exemption of goods or the person selling it - Whether in view of 
the notification dated 04.09.1995 issued under s.8(5) of the CST 
Act and r.28A of the Rules, the inter-state sales of the goods 
manufactured by an "exempted unit", even by any other dealer, is 
exempted from the levy of the Central Sales Act - Held: On all inter 
state sales, no tax is chargeable as the said transactions are treated 
as exempt - There is no stipulation in the notification that only the 
first sale or the sale by the eligible industrial unit in inter state or 
trade would be exempt - r.28A(4)(c) supports the interpretation - It 
exempts all intra state sales including subsequent sales - The 
intention is to exempt all subsequent stages in the State of Haryana 
and the eligible product can be sold a number of times without 
payment of tax - Haryana General Sales Tax Act, 1973 - Haryana. 
General Sales Tax Rules, 1975 - r.28A(4)(c) 
Haryana General Sales Tax Rules, 1975 - r.28A - Object and 
purpose, discussed. 
A 
B 
c 
D 
E 
Interpretation of statutes: Proviso - Significance of proviso in 
F 
a provision, discussed. 
Allowing the appeals, the Court 
HELD: 1. As per the notification, no tax is payable under 
· the Central Sales Tax Act, 1956 w.e.f. 1" April, 1988 on sale of 
goods during the period of exemption that are manufactured in 
the State of Haryana by any dealer, who holds a valid exemption 
certificate under Rule 28A of the Rules. Proviso to the said 
' 
notification stipulates that the dealers should have .also not . 
charged any tax under the. CST Act on the sale of goods 
791 
G 
H 
792 
A 
B 
c 
D 
E 
F 
SUPREME COURT REPORTS 
[2016] 2 S.C.R. 
manufactured by him. Sub-section (5) to Section 8 of the CST Act 
begins with the non-obstante clause and empowers State 
Governments to issue a notification in the official gazette subject 
to the condition(s) as may be specified and under clause (a) direct 
that no tax shall be payable by any dealer having his place of 
business in the State in respect of sale in the course of inter-
state trade or commerce, etc. and under clause (b) in respect of 
all sales of goods or classes of goods, etc. Rule 28A as per heading 
relates to class of industries, period and other conditions for 
exemption/deferment from payment of tax. Sub-rule (1) makes 
it clear that industries are covered under this rule and the said 
industries would not be entitled to any deferment or exemption 
from payment of tax under any other provisions of these rules • 
. Inter-state trade or commerce of finished products of eligible 
industrial units will be treated as notional sales tax liability. The 
reference in this clause is to the eligible industrial unit and sales 
of finished products made by the said units, which are sold in the 
course of inter-state trade or commerce.(Paras 14, 15, 16] ( 804-
B-D; 806-D-F] 
I 
2. The purport and impact of Rule 28-A is with reference to 
eligible industrial unit, is not only clear from the definition clauses 
which define eligibility certificate, exemption certificate, etc. but 
also from sub-rule (4)(a) which stipulates that the benefit of tax 
exemption or deferment shall be given to an eligible industrial 
unit holding exemption or entitlement certificate for the period 
specified. Clause (c) to sub-rule (4)(2) postulates that goods 
manufactured by an eligible industrial unit availing of exemption 
under this Rule shall be exempt from levy of tax on all successive 
stage/stages of sale or purchase, subject to the dealer affecting 
the said purchase or sale furnishing a certificate in the form of 
ST-14A obtained from the assessing authority. This clause has 
the effect of granting exemption from levy of tax at all successive 
stages of sale and purchase in intra-state trade or commerce i.e. 
G within the State of Haryana. To put it differently, it extends the 
benefit granted under clause (n)(ii) which relates to inter-state 
trade or commerce to intra-state sale or purchase. Such sales 
may be one or successive and tax at all stages is exempt. The 
exemption, therefore, is good specific, subject of course to other 
H conditions being satisfied. [Para 171 [806-G-H; 807-A-
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