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2014 (7) TMI 15 - GUJARAT HIGH COURTClassification - whether items such as patasa, harada, sakaria and alchidana, would fall within the term 'sugar' for the purpose of entry 47 of schedule-A of the Bombay Sales Tax Act, 1959 - Held that:- The Additional Duties of Excise(Goods of Special Importance) Act, 1957 (here-in-after referred to as "the Act of 1957") was enacted in the year 1957. From the preamble to the Act, it can be seen that the same was enacted to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of a part of the net proceeds among the States in pursuance of the principles of distribution formulated and the recommendations made by the Finance Commission in its report. Section 4 of the Act of 1957 provides that during each financial year, there shall be paid out of consolidated fund of India to the States in accordance with the provisions of the Second Schedule such sums, representing a part of the net proceeds of the additional duties levied and collected during that financial year as are specified in that schedule. After 10.04.1981, exemption was available to sugar falling under entry 42 only when levy and collection of additional duties of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not exempted on account of any exemption or drawback granted under that Act. Rate of duty had to be provided for sugar not falling in entry 42. Schedule-IIA pertains to goods, the sale or purchase of which is subject to sales tax or purchase tax and rates of tax. - Parallely, under exemption notification issued under section 49(2) of the GST Act, by virtue of entry 133, sugar covered under entry 3E in schedule-II part A of the GST Act was exempted from payment of whole of the tax. It may be noted that entry 3E of schedule-II part A referred to Sugar as defined in item no. 1 of the first schedule of Central Excises and Salt Act, 1944. Thus the definition of sugar for the purpose of entry 42 to Schedule I and entry 3E to schedule-II part A remained the same. By virtue of these entries, sugar falling under entry 42 would be exempt from payment of tax, if the condition contained in second column of entry was satisfied. If such condition was not satisfied, it would fall under entry 3E and would ordinarily be taxed at the rates specified therein. However, by way of exemption notification issued by the Government, such tax was also waived. We are informed that this was done in view of the representations made by the trade as is apparent from the circular dated 17.9.81 issued by the Government. The circular refers to legislative changes made in entry 42, corresponding insertion of entry 3E in schedule-IIA and issuance of exemption notification on account of difficulties faced by the trade which was brought to the notice of the Government through representations. In a circular dated 3.4.1989 while explaining the changes made after 1.4.1989 in the GST Act, it was explained that in schedule-I in entry 37, 40, 42, 43 and 44, if additional duty of excise is paid, sales tax is not to be levied. The definition of these terms were adopted from Central Excises and Salt Act, 1944. Now with the introduction of Central Excise Tariff Act,1985 in place of Central Excises and Salt Act, 1944, definition of these terms is referred to from the said Act. Interestingly, in the Gujarat Value Added Tax Act also, similar entries and exemptions are provided. In that background, in circular dated 1.8.2012 issued by the State Government, it is provided that by virtue of decision of Supreme Court in case of Sakarwala Brothers (1966 (9) TMI 102 - SUPREME COURT OF INDIA), items such as patasa, harada, sakaria and alchidana containing more than 90% sucrose are considered as sugar and therefore, would be exempt from payment of VAT. When the State Authorities themselves have clarified the situation, as mentioned above, we see no scope for any further debate. Quite independently also, we have given our own interpretation to various entries holding the field. We fully endorse the view of the tribunal. We further hold that even if case of the respondent does not fall under entry 86 of schedule-I, by virtue of condition contained therein not being satisfied, same would fall under entry 8 of schedule-IIA and not in entry 167 - Decided against Revenue.
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