TMI Blog1962 (3) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... d, on the remaining sum of Rs. 42,971-70 nP. at 5 per cent. In this writ petition, which is directed against the assessment made in this way. Mr. Venkataranga lyengar contends that the sales of coffee powder made by the petitioner were all exempt from the payment of tax under the Central Sales Tax Act and that the assessing authority could not have called upon the petitioner to pay any tax in respect of those sales. In support of this contention, he relied upon section 8 of the Central Sales Tax Act. The argument addressed is that the coffee powder sold by the petitioner was made out of coffee seeds purchased by it in the State of Mysore on the transaction relating to the sale of which tax had already been collected under the Mysore Sales Tax Act. The contention urged is that the sales of coffee powder were made to registered dealers of goods in the other States, and that those goods were of the description referred to in sub-section (3) of the Central Sales Tax Act. Reliance is, therefore, placed upon the proviso to sub-section (1) of section 8 of that Act. and the contention advanced on the basis of that proviso is that since the sales of coffee powder made out of coffee seed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for the packing of goods of the class or classes of goods so specified. Explanation.-For the purposes of this sub-section, "contract" means any agreement for carrying out for cash or deferred payment or other valuable consideration- (i) the construction, fitting out, improvement of repair of any building, road, bridge or other immovable property: or (ii) the installation or repair of any machinery affixed to any building or other immovable property. (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom 'the goods are sold. containing the prescribed particulars on a prescribed form obtained from the prescribed authority. (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, direct that in respect of such goods or classes of goods as may be mentioned in the notification and subject to such conditions as it m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have been applied by the assessing authority in this case was whether, if the coffee powder sold by the petitioner to the dealers in the other States had been sold inside the State of Mysore, any sales tax could have been demanded in respect of those transactions under the relevant Mysore Sales Tax Law. Since the Mysore Sales Tax Law which was operating in the State of Mysore during the period between 1st July, 1957, and 30th September, 1957, was the Mysore Sales Tax Act, 1948, it will be necessary to examine the provisions of that law for the purpose of deciding this question. Now it is clear from the 32nd entry of Schedule 1 to the 1948 Act, read with footnote (a) appearing under that Schedule, that in the case of coffee the only sale which attracts sales tax is the sale by the first or earliest of the successive dealers in the State of Mysore. That being so, and, since it is not disputed that for the Purpose of that entry the word "coffee" occurring in it includes coffee powder, if the coffee powder sold by the petitioner had been made out of coffee seeds which he had purchased in the State of Mysore, and, on the sale of those coffee seeds tax was payable when they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the proviso to sub-section (1). The validity of this contention depends upon the interpretation to be placed on section 8(1) and on the proviso to it. To bring this turnover within the proviso, it is urged that the sales of coffee powder if they had been made inside the State of Mysore would have been exempt from the payment of sales tax under the Mysore law and that, therefore, the inter-State sales of the coffee powder were similarly exempt from liability under the Central Act. To support this argument, it is submitted that under the Mysore Sales Tax Act, 1957, which was in force when those sales were made, if coffee seeds were purchased in the State of Mysore, and that sale is taxable, the subsequent sale of coffee powder made out of those seeds is not taxable, in support of this contention, reliance was placed on the 43rd entry in the Second Schedule to the Mysore Sales Tax Act, 1957, and on Explanation III to that Schedule. That entry and the Explanation read: "SECOND SCHEDULE Goods on the sale of which a Single Point Tax is leviable on the first or earliest of successive dealers in the State under section 5(3)(a). Serial No. Description of the goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e v. State of Mysore [1962] 13 S.T.C. 597. and Others v. The State of Andhra Pradesh(1). Mr. Government Pleader submitted that the exemption under the State law to which the proviso to section 8(1) refers, is an exemption similar to the exemptions created by section 6 of the Mysore Sales Tax Act, 1948, or by section 8 of the Mysore Sales Tax Act, 1957, exhaustive enumerations of which are contained in Schedule III to the one Act and Schedule V to the other. He proceeded to argue that Explanation III to the Second Schedule to the 1957 Act was not an exemption but was only a provision which enabled a second or subsequent dealer in the State of Mysore to contend that since the previous transaction was taxable, his transaction was not. I am not prepared to place any such narrow construction on the proviso to section 8(1) of the Central Act or on the word "exempt" occurring in it. I am of the view that what Explanation III to Schedule V to the Mysore Sales Tax Act, 1957, does is to exempt transactions other than the first or the earliest of the successive transactions inside the State from the payment of tax. I do not also think that the decision of this Court in Civil Revision Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offee seeds, the sale relating to which had already suffered taxation under the Mysore Sales Tax Act, the sale of such coffee powder, if it had been sold inside the State would not have been taxable under the Mysore Sales Tax Act. That being so, its inter-State sale was also not taxable. Mr. Government Pleader does not admit that the coffee powder sold during this period was made out of coffee seeds purchased in the State of Mysore or that the transaction relating to that purchase was taxed under the Mysore Act. It, therefore, becomes clear that both in the case of coffee powder, the sales of which were supported by "C" forms and which were of the value of Rs. 32,511-26 nP., and in the case of sales of the value of Rs. 42,971-70 nP., which were not supported by those "C" forms, the material question which had to be decided by the Commercial Tax Officer was whether those sales were of coffee powder made out of coffee seeds purchased in the State of Mysore, in respect of which sales tax had already been paid under the 43rd entry of the Second Schedule to the Mysore Sales Tax Act, 1957. Since there are no materials before us on the basis of which we could ourselves come to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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