2005 (11) TMI 445 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of the term "exempted goods" under section 13-A(2) of the Rajasthan Sales Tax Act, 1994 based on a notification exempting certain goods from tax.

In this judgment, the main issue revolves around the interpretation of the term "exempted goods" under section 13-A(2) of the Act of 1994 in light of a notification issued by the State Government granting exemption on the sale of specific goods. The notification in question, S.O. 125 dated July 9, 1998, exempts the sale of stainless steel flats, ingots, and billets subject to specified conditions. The Tax Board held that goods exempted under this notification fall within the definition of "exempted goods" as provided in section 2(18) of the Act, and therefore, the turnover related to these goods, subject to fulfilling the conditions, cannot be included in the turnover on which turnover tax is levied under section 13-A of the Act.

The court analyzed the power of the State Government to grant exemptions from tax under section 15 of the Act, emphasizing that the government's authority to exempt goods is extensive and can be prospective or retrospective, conditional or unconditional. The court highlighted that the exemption granted under a notification issued in exercise of these powers implies that the goods are exempted in accordance with the provisions of the Act. The conditional nature of the exemption does not exclude the goods from being classified as "exempted goods" as per the statutory definition. The court clarified that once the conditions specified in the notification are met, the goods are considered exempted, and their turnover falls within the purview of section 13-A(2)(i) of the Act.

Ultimately, the court upheld the Tax Board's decision, stating that the turnover related to the sale of stainless steel flats, ingots, and billets exempted under the notification is indeed entitled to exclusion under section 13(2)(i) of the Act. The court found no grounds to interfere with the Tax Board's conclusion and dismissed the revision accordingly.