STATE OF M.P. versus INDORE IRON AND STEEL MILLS PVT. LTD.

Citation: [1998] 3 S.C.R. 1140 · Decided: 12-08-1998 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Case Allowed
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Judgment (excerpt)

A 
STATE OF M.P. 
v. 
INDORE IRON AND STEEL MILLS PVT. LTD. 
AUGUST 12, 1998 
B 
[S.P. BHARUCHA AND V.N. KHARE, JJ.] 
Sales Tax: 
MP. General Sales Tax Act, 1958: Sections 7 and 12. 
c 
Sales tax-Purchase tax-Exemption of-State Government notification 
dated 8-10-1978 and item 2(b) column (4) of Schedule thereto-Provided for 
exemption of purchase tax under S. 7 of the State Act in respect of iron and 
steel as specified in S. 14(4) of the Central Sales Tax Act, 1956 subject to 
the condition that the said goods suffered entry tax under MP. Sthaniya 
D Kshetra Me Mal Kar Ke Pravesh Par Kar Adhiniyam, 1976 (Entry Tax Act) 
before such purchase-Held: The word "suffered" meant actual payment-
Hence, dealers exempted from payment of entry tax under State Government 
l' 
notification dated 9-2-1977 issued under S.10 of the Entry Tax Act not 
entitled to exemption of payment of purchase tax under the 1978 notification-
E MP. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976, S.10-
Centra1 Sales Tax Act, 1956, S.14 (4). 
Words and Phrases: 
"Suffered"-Meaning of-Jn the context of S.10 of the MP. Sthaniya 
F Kshetra Me Mal Kar Ke Pravesh Par Kar Adhiniyam, 1976. 
G 
The appellant-State issued a notification dated 8-10-1978 under Section 
12 of the M.P. General Sales Tax Act, 1958 exempting the purchase of iron 
and steel as specified in Section 14(4) of the Central Sales Tax Act, 1956 
from payment of purchase tax under Section 7 of the State Act subject to the 
condition that the said goods had suffered entry tax under M.P. Sthaniya 
Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (Entry Tax Act), 
before such purchase. By virtue of a Notification dated 9-2-1977 issued 
under Section IO of the Entry Tax Act, the appellant-State exempted new 
industries from payment of entry tax for a certain period. The respondent, 
H being a new industry, was accordingly exempted from payment of entry tax. 
1140 
y 
STATE v. INDORE IRON AND STEEL MILLS PVT. LTD. 
ll41 
The respondent filed a writ petition before the High Court contending A 
that it was exempted from payment of purchase tax under item 2(b) column 
(4) of the Schedule to thll 1978 notification under the Sales Tax Act since 
it was exempted from payment of entry tax under the 1977 notification. The 
High Court allowed the petition on the ground that although the respondent 
had not actually paid the entry tax by virtue of exemption granted under B . 
Section 10 of the Entry Tax Act yet is was exempted from payment of 
purchase tax by virtue of the 1978 notification. Hence this appeal. 
> 
On behalf of the respondent it was contended that the word "suffered" 
referred to the charge of tax under the Entry Tax Act and not to the actual 
payment of that tax. 
C 
Allowing the appeal, this Court 
HELD : 1. The words of the notification dated 8-10-1978 issued under 
Section 12 the M.P. General Sales Tax Act, 1958 are so clear that they leave 
no doubt whatsoever and cannot be subjected to any construction but one, D 
namely, that only goods upon which entry tax under the M.P Sthaniya Kshetra 
Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (Entry Tax Act) has been paid 
are entitled to the exemption thereunder. There has to be actual payment. 
The impact of the entry tax upon the goods for which the exemption is sought 
has to be felt; only then is the exemption available. The use of the word E 
'suffered' makes this plain. [1143-H; 1144-A) 
Gannon Dunkerley and Co. v. State of Rajasthan, (1993) l SCC 364, 
followed. 
CCEv. Usha Martin Industries, (1997) 94 ELT 460, held inapplicable. F 
Tata Yodogawa Ltd. v. Union of India, (1987) (32) ELT 521, referred 
to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1987 of 
1995 Etc. 
G 
From the Judgment and Order dated 18.1.93 of the Madhya Pradesh 
High Court in M.P. No. 695 of 1985. 
Anup Choudhary, A.K. Singh and S.K Agnihotri, with him for the 
Appellants. 
H 
1142 
SUPREME COURT REPORTS 
[1998) 3 S.C.R. 
A 
J. Vellapally, V.B. Joshi, Alok Singh, Umesh Bhagwat, S. Ganesh, Ravinder 
Narain, Ms. Punita Singh and M.S. Chaudhari for the Respondents. 
The Judgment of the Court was delivered by 
BHARUCHA, J. The order under appeal, of the High Court of Madhya 
B Pradesh, allowed the writ petitions filed by the respondents, following the 
High Court's earlier judgment in the case of Mis. New Shakti Iron & Steel 
Re- rolling Mills v. State of MP. The State is in appeal by special leave. The 
State had preferred a petition for special lea
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