1975 (4) TMI 124 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exemption of goods from sales tax under Section 8 read with Item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Applicability of Section 55 of the Sales Tax Act for rectification of assessment orders.
3. Interpretation of Section 8 of the General Clauses Act, 1897, in relation to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and the Madras Prohibition Act, 1937.

Detailed Analysis:

1. Exemption of Goods from Sales Tax:
The petitioners, manufacturers of various products including Woodward's Gripe Water, claimed exemption from sales tax under Section 8 read with Item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. They argued that their products, containing alcohol, qualified as "liquor" under the Madras Prohibition Act, 1937, and were thus exempt from sales tax. The Tribunal initially assumed the goods were exempt and considered whether Section 55 applied for rectification. However, the Government Pleader contended that the goods were not exempt under the specified provisions, necessitating a detailed examination of the exemption claim.

2. Applicability of Section 55 for Rectification:
The Tribunal treated the petitioners' refund petitions as applications for rectification under Section 55 of the Sales Tax Act. It dismissed the petitions for the assessment years 1961-62 to 1963-64 as time-barred and rejected those for 1964-65 to 1966-67, stating there was no apparent error or mistake of law. The Court upheld this view, noting that since the goods were not exempt from sales tax, there was no basis for claiming an error or mistake of law in the original assessments.

3. Interpretation of Section 8 of the General Clauses Act:
The petitioners relied on Section 8 of the General Clauses Act, 1897, arguing that excise duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, should be deemed as levied under the repealed Section 18-A of the Madras Prohibition Act, 1937. The Court examined whether the reference to the Madras Prohibition Act in the Sales Tax Act could be construed as including the provisions of the repealed Section 18-A. It concluded that the reference in the Sales Tax Act was to the Madras Prohibition Act as it existed when the Sales Tax Act came into force, not as it was prior to the repeal. Therefore, the goods were not exempt from sales tax under the provisions cited by the petitioners.

Conclusion:
The Court dismissed the petitions, ruling that the medicinal and toilet preparations manufactured by the petitioners were not entitled to exemption under Section 8 of the Sales Tax Act. It affirmed that there was no error or mistake of law on the face of the record that could warrant rectification under Section 55. The judgment emphasized the need for specific legislative reference to exempt goods subject to excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, which was absent in the relevant period. The petitions were dismissed with costs.