LexSTATE OF HARYANA versus DALMIA DADRI CEMENT LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
)
STATE OF HARYANA
v.
DALMIA DADRI CEMENT LTD.
NOVEMBER 20, 1987
[M.H. KANIA AND S. RANGANATHAN, JJ.]
Puniab General Sales Tax Act, 1948: s. 5(2)(a) (iv)-Cement-
Sale of to Electricity Board for use in generation or distribution of
~.
energy-Deduction of from dealer's gross turnover-Whether permis-
sible.
A
B
i
c
..
J'·
Words & Phrases: Expression "for use" must mean "intended
for use"-s.5(2)(a)(iv), Punjab General Sales Tax Act, 1948.
Section 5(2)(a)(iv) of the Punjab General Sales Tax Act, 1948
exempted goods sold to any undertaking supplying electric energy to
public, for use by it in the generation or distribution of such energy.
The assessee-respondent was sought to be reassessed to sales
tax, in respect of supply of cement to the Punjab State Electricity
Board in the years 1964·65 and 1965·66 on the basis of the certificates
issued by the Board to the effect that it was required for use in the
generation or distribution of electrical energy, on the ground of non·
user of the goods for the said purpose. The Tribunal dismissed the
appeal of the assessee.
On a reference the High Court came to the conclusion that the
assessee who made sales to the Board on the basis of the certificates
was not required to prove further that the cement was actually so
used.
Dismissing the State's appeal by special leave,
'
•
HELD: The assessee-respondent is entitled to exemption under
D
E
F
s. 5(2)(a)(iv) of the Punjab General Sales Tax Act, 1948. [4G]
G
·'r
The mere fact that some of the cement supplied was, in fact used
by the Punjab State Electricity Board for activities not directly con·
nected with the generation or distribution of electrical energy, cannot
make any difference regarding the availability of the exemption. [4D·El
1
H
2
SUPREME COURT REPORTS
[ 1988] 2 S.C.R.
A
In order to get exemption it need not be shown that the goods in
question were actually used in the generation or distribution of electri-
cal energy. On a plain reading of Cl. (a)(iv) of sub-s. (2) of s. 5 of the
Act it is clear that the expression "for use" therein must mean "inten-
ded for use". If the intention of the legislature was to limit th1: exemp-
tion only to such goods sold as were actually used by the untertaking
IB
in the generation and distribution of electrical energy, the phraseology ·
used in the exemption clause would have been different, as, for exam-
ple, "goods actually used" or "good used". [4H; SA-BI
In the instant case, the certificates issued by the Board clearly
showed ·that the intention of the Board was that the cement should be
used for a purpose directly connected with the generation or distribu-
C tion of electrical energy. There is no material to show that the certi-
ficates were false certificates given by the Board, having another use
in mind, or that they were fraudulently obtained by the assessee in
collusion with the Board. [SH; 6A-B]
D
Associated Cement Co. Ltd. Kymore M.P. v. Assistant Commis-
sioner of Sales Tax, Jabalpur Region, Jabalpur & Anr; [1971] 28
S.T.C. 629 and Spedding Dinga Singh & Co. v. The Punjab State,
11968] 22 S.C.C. 319 distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 937-
'i -
E
38 of 1975.
F
From the Judgment and Order dated 4.11.1974 of the Punjab
and Haryana High Court in Govt. Sales Tax Reference No. 37 of
1973.
Ravinder Bana and C.V. Subba Rao for the Appellants.
Serv Mitter and Madan Gopal Gupta for the Respondent.
The Judgment of the Court was delivered by
G
KANIA, J. These appeals by special leave are directed against
the decision of a Division Bench of the High Court of Punjab &
. _J
Harvana on a reference under Section 22 of the Punjab General Sales
\
Tax· Act (hereinafter referred to as 'the Act'). The short facts neces-
sary for the disposal of these appeal are as follows:
H
The respondent-assessee supplied cement in the years 1964-65
'i ..
• ,
{
I
STATEOFHARYANAv. DALMIADADRICEMENTLTD. [KANIA, J.J
3
and 1965-66 to the Punjab State Electricity Board (referred to
A
hereinafter as 'the Board') on the basis of the certificates issued
by the Board to the effect that the cement was required for use
in the generation or distribution of electrical energy. In the
initial assessment proceedings on the basis of these certificates
the sales of cement by the asscsscc to the Board were exemp-
ted. The exemption wa5. granted under section 5(2)(a)(iv) of the
B
Act.
Section 5(2)(a)(iv) of thExcerpt shown. Read the full judgment & AI analysis in Lexace.