TMI Blog1989 (8) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessees' units were entitled to the benefits of the Government Order S.R.O. No. 968 of 1980 under which all small-scale industrial units set up after 1st April, 1979, are entitled to exemption from payment of sales tax on the turnover of the sale of goods produced and sold by them for a period of five years from the date of commencement of sales of such goods by them subject to the limit prescribed therein of which we are not concerned. Therefore, the goods manufactured and sold by the assessees are exempt from payment of sales tax for a period of five years under the said Government Order. Section 5(3) of the Sales Tax Act gives certain other benefits to persons like the assessees. Under section 5(3) of the Act, the industrial ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-the Revenue. 4.. We heard counsel. 5.. There is no dispute that the assessees are small-scale industrial units set up after 1st April, 1979, and they are entitled to the benefit of S.R.O. No. 968 of 1980. That notification is issued under section 10(2) of the Act which reads: "10. Power of Government to grant exemption and reduction in rate of tax. (1) ........................ (2) Any exemption from tax, or reduction in the rate of tax, notified under sub-section (1),- (a) may extend to the whole State or to any specified area or areas therein, (b) may be subject to such restrictions and conditions as may be specified in the notification." Since S.R.O. No. 968 of 1980 is issued under section 10 of the Act, it only gives a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which imposes a levy of tax on every dealer. It says that every dealer shall pay tax on his taxable turnover for that year at the rate and at the point specified against such goods in the First or Second Schedule of the Act. Subsection (3) of section 5 of the Act reads: "Notwithstanding anything contained in sub-section (1) or subsection (2), the tax payable by a dealer in respect of any sale of industrial raw materials, component parts or packing materials which is liable to tax at a rate higher than two per cent when sold to industrial units for use in the production of finished products inside the State for sale or for packing of such finished products inside the State for sale, as the case may be, shall be at the rate of only two pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is "no liability" to tax under "the Act". The second proviso to the notification states that the cumulative sales tax concession granted to a unit at any point of time within this period shall not exceed 90 per cent of the cumulative gross fixed capital investment of the unit. Therefore, section 5(3) of the Act would apply to the assessees and the goods manufactured by them are liable to tax under the Act though tax is not payable by virtue of the notification exempting the small-scale industrial units for a limited period on complying with certain conditions. 8.. The counsel for the appellants wanted us to read the proviso to section 5(3) as "provided that this sub-section shall not apply where the sales tax in respect of such fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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