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TMI Blog1976 (4) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... Co., with him), for the appellants (in C.A. No. 936 of 1975). -------------------------------------------------- The judgment of the Court was delivered by RAY, C.J.-This appeal by special leave is on the question whether the appellant is exempt from inter-State tax on the sales of poles and cables to the Delhi Electric Supply Undertaking by reason of the provisions contained in section 5(2)(a)(iv) of the Punjab Sales Tax Act hereinafter referred to as the State Act. Section 5(2)(a)(iv) of the State Act is as follows: "5. (2) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom- (a) his turnover during that period on-.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods." The contention on behalf of the appellant is that by reason of the explanation to section 8(2A) of the Central Act read with section 5(2)(a)(iv) of the State Act, the appellant is exempt from payment of inter-State sales tax. The words "goods for use by it in the generation or distribution of such energy" occurring in section 5(2)(a)(iv) of the State Act are said by the counsel for the appellant to be descriptive of the goods. In short, the appellant's cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aphers and radiologists preparing them" as mentioned in the second column. In item 46 "hand- spun yarn" mentioned in the first column becomes tax-free "when sold by one who deals in hand-spun yarn exclusively" as mentioned in the second column. Section 5(2) of the State Act deals with taxable turnover. There is no dispute that electricity poles and cables sold to the undertaking supplying electric energy are exempt under the State Act from being included within the taxable turnover. The question is whether such sales made in the course of inter-State trade are also exempt from the levy of Central sales tax. The appellant contends that the exemption in the State Act is general because exemption applies in respect of goods without any enume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to section 8(2A) of the Central Act was held to mean such circumstances or conditions, the non-existence or non-performance of which precludes the grant of exemption. In other words, if those circumstances do not exist or those conditions are not performed then the sales of goods cannot be exempted from tax even if they are effected by a class of dealers to whom exemption is granted and during the period for which exemption is granted. In the Madhya Pradesh case [1968] 22 S.T.C. 152., there was no dispute that the sales effected by the assessee fell under section 8(1) of the Central Act. The State Act granted exemption from sales tax on sales of niwar effected by a registered dealer. The exemption granted to sales by a registered dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the State Act, was also not liable to Central sales tax because of the provisions contained in section 8(2A) of the Central Act. It was held that for purposes of section 8(2A) of the Central Act, sale of mirrors and toughened glasses manufactured by the company was under no condition and in no circumstance liable to be taxed in the hands of the company. The reasons given were that normally it will be taken that the sale of mirrors and toughened glasses by the company was exempt from tax generally unless it could be shown that such goods belonged to the class specified in the explanation to section 8(2A) of the Central Act. As the toughened glasses and mirrors manufactured by the company did not fall in such a category the turnover of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generation or distribution of electrical energy. If the circumstances do not exist or if the conditions are not performed then the sales of goods cannot be exempted from tax. General exemption means that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances, there is no ex- emption from tax generally. The contention of the appellant that the words "in the generation or distribution of such energy" in section 5(2)(a)(iv) of the State Act are descriptive of goods is unacceptable. The expression "generation or distribution of such energy" specifies the condition under which exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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