2003 (9) TMI 713 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of Notification S.O. No. 154 dated January 28, 1985, under section 13(1) of the Bihar Finance Act, 1981.
2. Inclusion of packing materials made out of paper in the registration certificate for concessional tax rates.
3. Validity and impact of the notification excluding paper materials from the operation of section 13 of the Act.
4. Interpretation of amendments to sections 13 and 21 of the Bihar Finance Act, 1981, by the Bihar Finance (Amendment) Act, 1985.

Issue-wise Detailed Analysis:

1. Applicability of Notification S.O. No. 154 dated January 28, 1985:
The petitioner sought a direction to prevent enforcement of the notification issued under the proviso to section 13(1) of the Bihar Finance Act, 1981, which excluded paper materials from the operation of section 13. The State contended that the notification remained valid despite the amendment to section 13, which added clause (e) providing concessional tax rates for packing materials specified in the registration certificate.

2. Inclusion of Packing Materials Made Out of Paper:
The petitioner applied for the inclusion of packing materials made out of paper in the registration certificate to avail concessional tax rates. The Deputy Commissioner of Commercial Taxes rejected this request, citing the notification that excluded paper materials from the benefits of section 13. The Court upheld this decision, stating that the notification explicitly excluded paper materials from concessional tax rates.

3. Validity and Impact of the Notification:
The Court examined whether the notification issued on January 28, 1985, was nullified or repealed by the amendment adding clause (e) to section 13(1). It concluded that the notification remained effective and applicable to the newly added clause (e). The proviso to section 13(1) empowered the State Government to exclude any goods from the operation of section 13, and the notification was issued under this power. The Court emphasized that the notification's purpose was to exclude paper materials from concessional tax rates, and this exclusion applied to all relevant clauses of section 13, including the newly added clause (e).

4. Interpretation of Amendments to Sections 13 and 21:
The amendments to sections 13 and 21 introduced by the Bihar Finance (Amendment) Act, 1985, were analyzed. The amendment to section 13(1) added clause (e), which included sales or purchases of packing materials specified in the registration certificate for concessional tax rates. However, the Court ruled that the notification excluding paper materials from the operation of section 13 remained valid and applicable to clause (e). The amendment to section 21 removed the exclusion of packing materials from taxable turnover, but the notification's exclusion of paper materials from concessional tax rates under section 13 was not affected.

Conclusion:
The Court dismissed the writ application, holding that the notification excluding paper materials from the benefits of section 13 remained valid and applicable to the newly added clause (e). The decision to exclude packing materials made out of paper from the registration certificate for concessional tax rates was upheld. The notification was neither nullified nor superseded by the amendment, and it continued to apply to all relevant provisions of section 13, including clause (e).