9911796707
TMI Blog1991 (5) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... n exercise of the powers conferred by section 8A of the Karnataka Sales Tax Act ("the Act"), the petitioner is exempt from tax or taxes payable under the Act on the turnover of goods manufactured in Karnataka and sold by all tiny-sector industrial units which are eligible for the exemption under the said notification. The contention of the petitioner is that the department, on a literal interpretation of the notification, is of the opinion that only the sale turnover of finished products is exempt from levy of tax and not the purchase tax payable on the purchase turnover of raw cashew. Several contentions are urged by Sri Indrakumar, the learned counsel for the petitioner. It was argued that, under explanation VI to the Second Schedule, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on behalf of the respondents and a statement of objections is filed in the case. It is the case of the department that what is exempt under the notification is only the sale turnover of the finished product and not the purchase tax payable under section 6 of the Act. It was urged by Sri C.V. Kumar, the learned Government Pleader, that the notification issued by the Government under section 8A of the Act does not admit of any other interpretation, and the exemption is only in respect of the tax payable on the sale turnover of finished products. The only question that arises for consideration on the arguments advanced by both sides is: Whether the petitioner is entitled to exemption on its purchase turnover on a proper interpretation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Though the latter half of the preamble refers to the tax payable on the turnover of goods manufactured and sold by tinysector industrial units, the reasonable interpretation it admits of is, having regard to the object of extending tax concession to tiny-sector units, that the tiny-sector industrial units would be eligible for exemption from all taxes payable under the Act. The expression, "on the turnover of goods manufactured and sold by all tiny-sector industrial units" should not control and read in such a way so as to take away the benefit of total exemption purported to be extended by the Government to tiny-sector industrial units. This is one way of looking at it. If this interpretation commends itself for acceptance, then without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [1991] 83 STC 251; (1990) 47 ELT 700, and in particular, the observations made in paragraphs 2 and 3 of its judgment, that the court should, while interpreting the exemption provision, adopt a liberal construction, whereas, it should adopt a strict construction while applying the provision providing for levy. The Supreme Court also observed, the construction which results in inequitable results and is incongruous has to be avoided. Another case of the Supreme Court cited by the learned counsel is Union of India v. Sukhshaw International (1989) 39 ELT 503. Sri Venkatachaliah, J., laid down in paragraph 9 of the judgment that a factual strict interpretation of a beneficial policy of the Government should not be adopted by courts, and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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