TMI Blog1984 (4) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter referred to as "the Rules"), found that the assessee had committed breach of the recitals of such certificate with the result that the assessee was liable to pay purchase tax under section 14 of the Act. The Sales Tax Officer, therefore, levied purchase tax accordingly on the turnover of such purchases amounting to Rs. 27,018. These purchases were of medicines covered by entry 22 of Schedule E to the Act. Under notifications issued by the State Government under sub-section (1) of section 41 of the Act from time to time certain classes of goods were exempted from payment of general sales tax. We shall have occasion to refer to this notification at a later stage. However, it may be pointed out that under such a notification issued under sub-section (1) of section 41, entry 38 was added to the earlier notification whereby the dealer was exempted from payment of general sales tax in respect of certain classes of medicines and medicines in question belong to that class or classes. The Sales Tax Officer levied the purchase tax at 6 per cent on these goods relying on the provisions of sub-section (2A) of section 14 of the Act read with entry 22 of Schedule E to the Act. This order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 thereof, but after deducting from such turnover,- (i)................................... (ii).................................. (iii)................................ (2) There shall be levied a general sales tax on the turnover of sales of goods specified in Schedule E, at the rate set out against each of such goods in column 4 thereof, but after deducting from such turnover(i).............................. (ii)............................." Section 11 provides for levy of tax at reduced rate on certain sales on giving a certificate as provided therein. Under section 12 it is provided that there shall not be deducted from the turnover sales of goods to an authorised dealer or licensed dealer or to a commission agent holding a permit to purchase on behalf of his principal or to a registered dealer as provided in sections 7, 8, 9 and 10 unless such authorised dealer, licensed dealer, commission agent or the registered dealer issues a certificate in the prescribed form as provided in section 12. Section 14 provides for the liability to purchase tax for contravention of terms of certificate given under section 11 or 12. According to subsection (1) of section 14 it is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention of the assessee which has found favour with the Tribunal is that as a result of the notification granting exemption, the rate of tax mentioned in column 4 has to be read as "nil". Now there is nothing to indicate in the provision of sub-section (1) of section 41 that issuance of notification thereunder reduces the rate mentioned against column in the relevant entry and is rendered as nil. Section 41 deals with exemption from payment of tax and sub-section (1) thereof, inter alia, provides that subject to such conditions as it may impose, the State Government may, if it is necessary so to do in the public interest, by notification in the Official Gazette, exempt any specified class of sales or purchase from payment of the whole or any part of any tax payable under the provisions of the Act. The only effect of the notification is that the dealer is exempted from payment of tax. Section 41(1) does not talk of either the rate or the liability to pay the tax. As against this the levy of purchase tax, liability to pay the purchase tax and the rate of purchase tax is provided under subsection (2A) read with sub-section (1) of section 14 of the Act. 5.. As mentioned earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay purchase tax. Sub-section (2A) provides for levy as well as the rate of purchase tax, once the dealer becomes liable to pay the purchase tax. The rate specified under sub-section (2A) is the aggregate of the rate specified against the particular goods in columns 3 and 4 of Schedule E. The notification issued under section 41(1) which is relied on by the assessee in this case, merely deals with the exemption from payment of the general sales tax and does not affect the liability to pay purchase tax. There is nothing to show nor does the notification has the effect of reducing the rate of purchase tax, which in the instant case is provided under sub-section (2A) of section 14. 8.. In this connection it may be mentioned that there is a separate provision in the Act, viz., section 17, which confers power on the State Government to reduce the rate of tax and also to amend schedules. Section 17 provides that the State Government may by notification in the Official Gazette reduce any rate of tax specified in Schedules B, C, D, and E in respect of any entry (or part thereof) in the said Schedules and may by like notification, (a) omit or amend any entry (or part thereof) but not so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Statement of Objects and Reasons attached to the Bill provides a clue to the intention of the legislature in introducing the amendment to section 14. The legislature found that though section 14 of the Act provides for levy of purchase tax for contravention of the terms of the certificate given by an assessee under section 11 or 12, it does not prescribe specifically the rate of tax. It would, therefore, be clear that prior to the addition of subsection (2A) there was no specific provision providing for rate of payment of purchase tax when there was breach of condition of the certificate issued under section 11 or 12 of the Act. 10.. The present sub-section (2A) was added by Maharashtra Act 13 of 1973 which provision has been made retrospective and is, therefore, applicable to the facts of this case. Here also the Statement of Objects and Reasons indicate that the amendment was made since doubts were raised regarding rate of tax and the Tribunal had taken up a particular view and sub-section (2A) was added to make the rate of purchase tax more precise and clear. We have referred to the Statement of Objects and Reasons now with a view to show that no such intention, as is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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