9911796707
TMI Blog2009 (3) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... added that the revision No. 2077 of 2005 arises out of assessment proceedings while the connected revision No. 2074 of 2005 arises out of reassessment proceedings initiated under section 21 of the U.P. Trade Tax Act, 1948 with respect to the assessment year 1996-1997, which was the first year of the business of dealer-opposite party. The facts of the case may be noticed in brief. The dealer-opposite party claims that it is an institution certified by the U.P. Khadi and Village Industries Board. It carries on the business of manufacture and sale of mentha crystals. The mentha crystals were manufactured out of mentha oil purchased by it. The dealer claimed exemption on the sale of mentha crystals so sold and manufactured out of mentha oil purchased by it under Notification No. 2454 dated October 5, 1995 issued under section 4(c) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, "the Act"). The case of the dealer is that its product, i.e., mentha crystals is exempt from payment of trade tax under entry No. 35, in particular of the said notification. The said plea did not find favour with the assessing authority. The assessment order was carried in appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e industries which are registered with Khadi and Village Industries Board Adhiniyam, 1956. Unit of the dealer has been registered as village industry with the U.P. Khadi and Gramodyog Board for manufacture of mentha crystals and de-mentha oil out of jari booti (herbs). Taking an analogy of a circular issued by the Commissioner of Trade Tax in respect of footwear dated 29th September, 2000, which has been relied upon by the Tribunal in the impugned order holding that the "footwear" and "chappals" are the part of leather industries and therefore, mentha crystals are exempt under the said notification. The similar interpretation and treatment is required to be given to mentha crystals also, submits the learned counsel for the dealer. Considered the respective submissions of learned counsel for the parties and perused the record. The relevant notification for our purposes is the Notification No. 2454 dated 5th October, 1995 which has been issued in exercise of powers given under clause (c) of section 4 of the Act. By this notification the earlier Notification No. 7037 dated 31st of January, 1995 has been amended. The present notification provides for exemption of sale by institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification which contains the said entry as also the statutory provision, proceeded to decide the appeals on the footing that the word "and" be read disjunctively notwithstanding the context thereof. It may also be noticed that the said decision was not rendered under the Trade Tax Act, but with respect to a penal provision. The interpretation of exemption notification granting exemption from tax, excise or duty was not involved therein. The apex court in State of Punjab v. Punjab Fibres Limited [2005] 139 STC 200 (SC); [2005] 4 RC 58; AIR 2004 SCW 6988, a case under the Punjab General Sales Tax Act, while dealing with the exemption from tax granted by a notification issued therein to textile mills in respect of sales within State has made the following observations which is apt for present purposes: "7. It is settled law that to avail of the benefits of a notification the party must strictly comply with the conditions of the notification. It is also settled law that the notification has to be interpreted in terms of its wording. Where the language is very clear and unambiguous, benefit cannot be granted merely on the ground of sympathy. " In State of Kerala v. Vattukalam Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, "The Principles of Statutory Interpretation" in Chapter 5, page 436, 10th Edition. In Hyderabad Asbestos Cement Products v. Union of India [2000] 1 SCC 426, a case under the Central Excise Act, it was held that the word "and" be read conjointly on its plain language. The other limb of the argument of the learned counsel for the dealer that the aforesaid notification should be interpreted in the manner in which it was understood by the Department as is evident from circular of the Commissioner dated January 29, 2000 with respect to the grant of exemption to footwear is concerned, it is liable to be rejected. The said circular cannot be imported for the purposes of entry No. 34 of the notification in question, as it relates altogether to a different entry. The entry No. 34 being unambiguous, it should be read as it is without making addition or subtraction therein. Additionally, the circular was issued in the light of the decision given by the Commissioner of Trade Tax, which is not so in the present case. The Tribunal has committed manifest error of law in proceeding with the matter on the premises of the said circular and importing its purport to explain the entry in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for the purpose of either curing or mitigating the disease after its symptoms have appeared or in prevention of any disease. "Disease" means an impairment of the normal state of the living animal that interrupts or modifies the performance of the vital functions in a response to environmental factors (as malnutrition, industrial hazards or climate) or to specific infective agents (as worms, bacteria or viruses) or to inherent defects of the organism (as various genetic anomalies) or to combinations of these factors. The other facet of the order of the Tribunal is that it was of the view that once Khadi and Gramodyog Board has expressed its view in the matter, the Trade Tax Department is bound by it and cannot take a different view. It invoked the principle as enshrined under section 4A of the Act in the case of "new unit" in whose favour eligibility certificate has been granted. In support thereof the Tribunal has placed reliance upon a letter of U.P. Khadi and Gramodyog Board dated December 8, 1999. In absence of any statutory provision prohibiting the trade tax authorities to make an inquiry in this regard, it is difficult to agree with the Tribunal. How, the letter dated 8t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose in the light of the section 8(2A) of the Central Sales Tax Act. In that relation, it was found that the exemption granted under the said notification in respect of U.P. sales is not generally exempt, but the exemption is conditional one. Therefore, the said decision is not of any help for the decision of the controversy on hand. In G.P. Ceramics Pvt. Ltd. v. Commissioner, Trade Tax, Uttar Pradesh [2009] 19 VST 284 (SC); [2009] 2 SCC 90, a case under the U.P. Trade Tax Act with reference to section 4A thereof, it was held that it is now well established principle of law that whereas eligibility criteria laid down in the exemption notification are required to be construed restrictly, once it is found that the applicant satisfies same, the exemption notification should be construed liberally. In this very case, the apex court has referred its earlier decision in State Level Committee v. Morgardshammar India Ltd. [1996] 101 STC 1 (SC); [1996] 1 SCC 108 wherein it has been pointedly held that section 4A provides for exemption from tax. This being a provision providing for exemption or exception, as the case may be, has to be construed strictly, was held therein. The upshot of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
