TMI Blog1974 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... der the State Act. The petitioner claimed that the hides and skins which had been subjected to Orissa sales tax were sold outside the State of Orissa in the course of inter-State trade or commerce. The State Government had issued a notification under section 8 of the Central Act (annexure 1) to the effect that in respect of sale of declared goods no tax under the Central Act would be levied if the two conditions indicated therein (to which reference would be made later) are satisfied. The petitioner relying on the said notification claimed exemption from tax under the Central Act. The assessing officer, however, did not agree with the petitioner's contention and levied Central sales tax. While doing so, the assessing officer had disbelieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax has been levied under the State law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of interState trade or commerce and tax has been paid under the Central Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under the State Act shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State. 3.. Annexure 1 is the notification of the State Government issued in 1966 in exercise of the powers under section 8(5) of the parent Act. That notification is to the following effect: "In exercise of the powers conferred by sub-section (5) of section 8 of the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of tax under the State Act in respect of declared goods and the fourth proviso to section 5(1) of the State Act incorporates the same provision in order that the rate of tax under the State Act may conform to the requirement of section 15(a) of the Central Act. The Central Act is intended to deal with transactions taking place in the course of inter-State trade or commerce and takes into its field such transactions which come into the net applying the tests of section 3 of that Act. It is clear, therefore, that the Central Act does not ban levy of tax under the State Act, but the essential feature in the scheme is that two sets of taxes would not be levied under the two Acts in respect of the same goods. Where the same declared go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Sub-section (5) of section 8 provides for giving individual exemptions in public interest. Such a power is there in all taxation measures. It is to provide for unforeseen contingencies. Take for example, when there was famine in Bihar, if a dealer in Punjab had undertaken to sell goods to a charitable society in that State at a reasonable price for distribution to those who were starving, it would have been in the public interest if the Punjab Government had exempted that dealer from paying sales tax. Such a power cannot immediately or directly affect the free flow of trade." It is true that the court was meeting the challenge to the vires of the Act when these observations were made. It cannot, however, be lost sight of that the scope o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished by the assessee. The mandate in section 15(b) of the Central Act is that the tax under the State Act is to be refunded once the same goods are sold in the course of inter-State trade or commerce and are assessed to tax under the Central Act: Khader Co. v. State of Madras[1966] 17 S.T.C. 396. Judged from that angle, the notification embodies a converse scheme, i.e., where the State tax is collected and the dealer shall not claim refund of that tax under section 15(b) of the Central Act, the Central sales tax shall not be payable. A statutory notification [in exercise of power under section 8(5) of the Central Act] cannot be permitted to run counter to section 15(b) of the Central Act. That view has been taken in Rafeeq Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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