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2017 (5) TMI 927 - BOMBAY HIGH COURT

2017 (5) TMI 927 - BOMBAY HIGH COURT - TMI - Interpretation of statute - applicability of principle of estoppel - whether the Sales of leather goods are admissible for deduction as resales u/s 8(2) of the Bombay Sales Tax Act, 1959, even though corresponding purchases of these goods were covered by Entry 39(a) of Schedule A of the Act and when necessary certification was availed of by the appellant's vendors? - Held that: - Held that: - the Tribunal found that the Notification which was issued, .....

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tly understood the controversy before it. To our mind, and further, the Tribunal rightly noted that there are conditions specified in Schedule A39 and which, upon fulfillment, would make the sale and purchase of these products free from tax. The Tribunal also rightly referred to the object, namely, to promote the products of village industries as are defined by KVIC Act. - There are specific conditions when such products, as referred above, are sold by a dealer who is certified by the Commissio .....

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81, both at the time of purchase and sale. They are Schedule C goods when purchased and sold, and therefore, entitled to resale. We do not see how such conclusion can raise a question of law. When the Tribunal decided this matter and as elaborately as it did, how does any question of an interpretation of the provisions of law has not been clarified to us. The question as framed for our consideration and opinion is that, whether the sales of leather goods are admissible for deduction as resales .....

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r these questions. - Making distinction between leviability and nonleviability, the Tribunal had come to the conclusion that even after addition of explanation to Section 8, that has not made any difference. We think that the insertion of the Explanation has led to the reference to this court. On facts, we find that all conditions of deduction for resale have been fulfilled. However, the Explanation added later is the focal point. The Explanation that was introduced to Section 8 came to be i .....

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sense we are construing and interpreting a statutory provision and Schedule entry as forming part of the statute itself. In such circumstances, we do not see how a question about applicability of the principle of estoppel, as invoked by the Revenue in the peculiar facts and circumstances, would arise at all. - Appeal dismissed - decided in favor of dealer. - SALES TAX REFERENCE NO. 37 OF 2010, SALES TAX REFERENCE NO. 17 OF 2009, SALES TAX REFERENCE NO. 18 OF 2009, SALES TAX REFERENCE NO. 10 .....

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9 to 105 of 2001 before the First Bench of the Maharashtra Sales Tax Tribunal at Mumbai. 2. These Reference Applications arose out of the judgment and order dated 10th October, 1997, in Second Appeal No. 188 of 1997 and the judgment and order dated 5th May, 2001 in Second Appeal Nos. 950 to 956 of 1999. 3. In the present Sales Tax Reference, we are concerned with the dealer M/s. Shoe Bazaar Queen, who shall be referred to, hereafter, as the original appellant. 4. After hearing both sides at grea .....

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f Schedule A of the Act and when necessary certification was availed of by the appellant's vendors? (ii) Whether on the facts and circumstances of the case and on the true and correct interpretation of the provisions of law, the Tribunal was justified in law in holding that no principle of estoppel is applicable to the conditions introduced in Entry A­39 w.e.f. 11.6.1988 for the purpose of allowance of claim of exemption from tax by the claimant dealer? 5. We have to notice certain facts .....

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ern and duly registered under the provisions of the Bombay Sales Tax Act, 1959 (for short "the Bombay Act"), is not a manufacturer. It is a reseller in foot­wears. It does not hold any trade mark at all. The original appellant made large purchases for the period under dispute which, going by the facts from the appeal itself, is 1992­93, from several Cobblers' Societies. These Cobblers' Societies are duly registered dealers under the Bombay Act. They also hold a certific .....

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ombay Act. As per the chart, and which was provided to the Tribunal in the order on the Reference Application, it is apparent that the assessment order dated 21st March, 1996 was made and the total dues as per the said assessment order were ₹ 21,47,115/­, whereas, dues as per the first appellate order were determined at ₹ 16,68,082/­. Thus, the claim on account of resale was disallowed. Being aggrieved by the order passed by the assessment officer, so also the first appellate .....

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53,54,630/­ of the very goods has been allowed. Even consequential relief in interest under Section 36(3)(b) has been given. The penalty imposed under Section 36(2)(c) of the Bombay Act was deleted. 9. An attempt was made to rectify this judgment by making an application under Section 62 of the Bombay Act. That attempt was made by the Revenue in the light of the statutory amendment brought in subsequently, but with retrospective effect. The Rectification Application No. 20 of 1999 moved in t .....

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e result of the consent order was that the order dated 11th October, 2002 in Rectification Application No. 20 of 1999 was set aside by consent of the parties. 10. However, the Revenue sought reference to this Court of the questions of law arising from the Tribunal's main order dated 10th October, 1997 in Second Appeal No. 188 of 1997. It is that application which has been allowed on 17th March, 2006. It is because of that order that the above two questions of law have been forwarded for our .....

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retation of those provisions by the Tribunal is not correct and proper. After referring to the brief facts in a written note, Mr. Sonpal would submit that on 11th August, 1988, Schedule entry A­39 was amended and the exemption was restricted to only those dealers who purchased goods from certified producer. The conditions were that i) the seller must be a dealer; ii) the seller must be certified by the Commissioner of Sales Tax; iii) The seller should not hold trade mark or patent in respect .....

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xemption. If it is not entitled to exemption in terms of A­39(2), then, it cannot, by any alternative process, avoid the obligation to pay tax. The original appellant is avoiding it on the ground that what the Revenue is attempting to do is to tax a resale. 13. Then, Mr. Sonpal invites our attention to Section 8 of the Bombay Act. He would submit that the Scheme of Section 8, Rule 42H and Rule 46B, both of the Bombay Sales Tax Rules, would demonstrate that if resales are to be allowed, it is .....

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not satisfied. The claim of resales cannot be allowed. 14. Then, relying upon this Section further, Mr. Sonpal would submit that deduction of sales of goods purchased from registered dealer, and in terms of Section 8, can be claimed, provided a certificate under Section 12A is furnished or incorporated in seller's invoice. No doubt, the certificate as provided under Section 12A is incorporated in the seller's invoice. It is inherent in the Scheme of the Act that the tax is levied at sing .....

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anation was inserted by amended Section 8 and relying upon the same, Mr. Sonpal would submit that this retrospective amendment would have a great bearing on the issue raised before us. Mr. Sonpal submits that the record will indicate that at the time of purchase by the original appellant, no tax was leviable. The goods were exempt under Schedule entry A­39. The retrospective amendment has not been struck down and is in force. The retrospective amendment was made by the Maharashtra Tax Laws ( .....

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entry A­39. He submits that it is dealer specific and is not qua any goods. Any one who produces leather goods in cottage leather industry, which is not recommended by Khadi and Village Industries Commission (for short, KVIC ) or State KVIC and also not certified by the Commissioner, is not entitled to exemption. When a dealer is not entitled to exemption, then, the benefit of resale, and as set out in the Scheme of the Act, is not available to him. It is specifically provided in the Schedu .....

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or purchase of the goods specified in that entry (or part thereof) is leviable, the deductions provided in clause (ii) or clause (iii) of Section 8 and in clause (b) or clause (c) of Subsection (1) of Section 9 shall not apply to the re­sale of those goods. It is in these circumstances that Mr. Sonpal would submit that the reasoning of the Sales Tax Tribunal is not in tune with the requirements stipulated by the Bombay Act, particularly for resale. Mr. Sonpal heavily criticizes these findin .....

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resolving the controversy which had to be done by an Appellate Court by referring to the facts and circumstances of the case before it and the entire record. By giving hypothetical examples, such complex issues cannot be resolved. Mr. Sonpal also submits that the Tribunal was not concerned in the present case with any supposed intention of the legislature. There was a clear stipulation in the statute. The language was plain, unambiguous and clear. There was no scope for any interpretation. In t .....

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entitled to any exemption on their sale of goods purchased from certified producers. Strangely, the Tribunal has used old circulars which are redundant after the amendment. The Tribunal also lost sight that it was not dealing with a claim for exemption but on account of resale. Hence, all the observations and findings are de hors the factual background and controversy. In such circumstances, he would submit that the questions of law, and forwarded by the Tribunal, be answered in favour of the Re .....

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nion of this Court which is not based on the findings and conclusions in the second appellate order. The Tribunal has completely misconstrued and misinterpreted the issue. On a Reference Application, a question even of law, which never arose from the order passed in appeal, could not have been referred for this Court's opinion. There was no occasion for the Tribunal to have forwarded such question and as is reproduced by us above. She would submit that this Court, therefore, should not answe .....

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ibunal. In the Second Appeal, the Tribunal was considering a question somewhat distant from the one referred to this Court's opinion. Therefore, going by the Schedule entry, the claim for resales and particularly, bearing in mind Section 8 clause (ii) of the Bombay Act, the question must be answered. If looking at these provisions, the question as proposed and forwarded does not arise at all, and particularly, in the factual background, then, this Court is not obliged to answer the same. Thi .....

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is permissible. The entire record of the Second Appeal before the Tribunal should have been forwarded. That contains several documents and very vital for the issue. Ms. Badheka would submit that the basic claim of the original appellant rests on the certificate issued by the Commissioner to the vendor cobblers' societies as being the KVIC unit and entitled to claim its sales as tax free in terms of Schedule entry A­39(a) of the Bombay Act. It was therefore, specifically requested that t .....

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ertificates as enclosures to the Reference Application. The questions framed are based on these certificates issued to the vendor cobblers' societies. The very contents of these certificates, if produced, would falsify all the claims made by this application. That is why the original appellant has forwarded the certificates issued to all the suppliers for the period 1992­1993. These certificates are issued to the registered dealer by the Sales Tax Officer and were renewed every year. The .....

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ents. The Tribunal has also not forwarded the relevant trade circulars and which have an important bearing on the issue. She would therefore submit that once the Tribunal has not followed the practice of drawing up a statement of admitted facts and forwarding of the relevant records, then, this Court should return the Reference. Then, she would submit that the present Reference is peculiar. The Reference Application before the Tribunal is disposed of not only by passing an order on the same, but .....

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finding of fact, the State has not challenged the order of the Tribunal rejecting these Reference Applications. However, even when the assessment order in the present matter is vitiated by a bias, then, the same decision and conclusion, as reached in the seven other cases, should have been reached by the Tribunal in the present matter. 20. Without prejudice to the above contentions, Ms. Badheka would submit that the respondent's claim for deduction is based on Section 8(ii) of the Bombay Act .....

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the vendors held registration certificate and issued their sale bills incorporating the requisite details in terms of Section 12A. She would submit that despite such clear stipulation, the State was desirous of taxing the transaction. The assessment order confirms ₹ 61,65,760/­ as Registered Dealer Purchase. The Tribunal has correctly allowed the deduction of resale as claimed. The Revenue, however, has based its question by relying on certain certificates claimed to have been issued b .....

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ed by the Commissioner, it was not entitled to the claim as laid under Section 8(ii) or exemption from tax in terms of Schedule entry A39(a). Hence, the claim of second sale being tax free cannot be allowed. This was a erroneous approach and the Tribunal in its judgment in Second Appeal of the original appellant, held that it had claimed deduction under Section 8(ii) and not exemption under Section (5) of the BST Act. 21. In any case, according to Ms. Badheka, the entry A­39, as it existed, .....

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ation to be made by KVIC is restricted to those and spelt out by the language of the entry itself. There is no question of any recommendation for the original appellant and to be made by KVIC. The Tribunal was convinced that even if the first sale is exempted, the statute is framed for a single time tax, the sales subsequent to the first sale which is exempted, will also be exempted. In that regard, the Tribunal rightly relied upon the judgment in the case of Anand Distillery vs. The Assistant C .....

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uestion of law proposed and forwarded for this Court's opinion and answer is, therefore, not arising from the finding in the second appellate order. 22. The wording of the question itself is criticized by Ms. Badheka. She would submit that the crucial facts have been overlooked. In that regard, paragraph 36 of the Tribunal's judgment and order in the second appeal would clinch the issue. She would submit that there was no challenge to the order passed by the Tribunal in the Second Appeal .....

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ticularly, when it relies on the certificate issued under Section 12A by the vendors. 23. It is in these circumstances she would submit that question No. (i) was not required to be referred at all. In any event, if that question is referred, then, without prejudice to the objection of the respondent, it be answered against the Revenue. 24. As far as question no.(ii) is concerned, once again our attention is invited to the entries by Ms. Badheka. She would submit that if the articles sold by the .....

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aders and direct the Commissioner to issue certificate to traders as it is concerned only with it's own units. That is how Ms. Badheka invites our attention to the Khadi and Village Industries Commission Act, 1956 (for short, the KVIC Act ) itself. She would submit that the KVIC Act and Rules, as compiled by her, would indicate that the said Act enacted by the Parliament is to provide for the establishment of a Commission for the development of khadi and village industries and for matters co .....

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iction on their free marketing and trading. In the circumstances, she would submit that though before the Tribunal it was argued that under the KVIC Act, no dealer buying from such society and reselling the goods is eligible to be given such a certificate so as to enable him to claim exemption under the Bombay Act. Still, the Tribunal was aware that in law, there is nothing which would restrain or restrict the successive dealers. There is no requirement that they should hold certificate from the .....

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this original appellant. It had filed returns claiming deduction on turnover in terms of Section 8(ii) of the Bombay Act. Hence, we should note the amendment, and upon perusal of the same, arrive at a conclusion and consistent with the factual finding rendered by the Tribunal in the second appellate order. The admitted facts are that the resale of goods purchased from the co­operative societies, which were all registered dealers, were eligible to deduction under Section 8(ii) of the Bombay A .....

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128 of the paper book). In such circumstances, if a registered dealer, purchasing from unit exempt under entry 136 as package scheme of incentives, is allowed resale by the State, there is no reason why the original appellant in this case should be denied the benefit. In such circumstances, she would submit that the arguments of Mr. Sonpal do not deserve to be accepted. She would submit that the questions in this Reference be answered against the Revenue and in favour of the dealer. 25. For prop .....

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as amended up to 1st May, 1998. It is an Act to consolidate and amend the law relating to the levy of tax on the sale or purchase of certain goods in the State of Bombay. Chapter I contains Section 2 titled as Definitions . We are concerned with this Section, and particularly with certain definitions. The term Commissioner as defined under Section 2 Clause (7) means the person appointed to be the Commissioner of Sales Tax for the purposes of this Act. Section 2(11) defines dealer to mean any pe .....

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nd which is relevant, is of the term Registered dealer which appears under Section 2(25) to mean, a dealer registered under Section 22. The term re­sale is defined in Section 2(26) and that provision reads as under : 2(26) re­sale , for the purposes of sections 7, 8, 8A, 12, 13, 13AA and 13B means sale of purchased goods­ (i) in the same form in which they were purchased, or (ii) without doing anything to them which amounts to, or results, in a manufacture, and the word re­sale s .....

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ccordingly. The term sale is defined in Section 2(28). The term tax is defined in Section 2(32) to mean a sales tax or purchase tax as the case may be, payable under the Bombay Sales Tax Act. The term taxable goods is defined under Section 2(33) to mean goods other than those on the sale or purchase of which no tax is payable under Section 5. The term turnover of purchases and turnover of sales are defined in Sections 2(35) and 2(36) respectively. After scanning the above definitions, we go to C .....

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e payable on the sales or purchases of any goods specified in that Schedule. (2) The State Government may by notification in the Official Gazette, add to, or enlarge, any entry in Schedule A, or relax or omit any condition or exception specified therein; and thereupon, the said Schedule shall be deemed to be amended accordingly; and the amendment so made shall take effect from the date of the publication of the notification in the Official Gazette or from such other date as may be mentioned ther .....

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wer in the State Government to add to, or enlarge, any entry in Schedule A, or relax or omit any condition or exception specified therein. Then, Section 6 provides for taxes payable by a dealer. The tax has to be paid subject to the provisions of the Act and to any rules made thereunder, by a dealer who is liable to pay tax. That tax or taxes are leviable in accordance with the provisions of this Chapter II of the Bombay Act. 30. Section 7 provides for single point levy of sales tax on declared .....

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able to pay purchase tax under section 14; (ii) resales of goods purchased by the dealer on or after the appointed day from a Registered dealer, otherwise than on a declaration furnished under section 11 or 12, if the requirements of section 12A are satisfied; [Provided that, resales of goods purchased by the dealer from a registered dealer during the period commencing on the 1st July 1981 and ending on the day immediately preceding the date of commencement of the Maharashtra Tax Laws (Levy and .....

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y furnishing a declaration as provided in clause (g) of section 12 . A perusal of this Section would reveal as to how there shall be levy on the turnover of sales of goods specified in Schedule C. A sales tax at the rate set out against each of them in column 3 thereof, but after deducting from such turnover (i) resales of goods on the purchase of which the dealer is liable to pay purchase tax under section 14, and (ii) resales of goods purchased by the dealer on or after the appointed day from .....

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ductions under Section 7 and 8, which is set out in Section 10A. By Section 11, tax is payable at reduced rate on certain sales, and by Section 12, no deduction from turnover except on declarations. 32. Section 12 and 12A read as under: 12. No deduction from turnover except on declarations. There shall not be deducted from the turnover of sales, sales of goods to a Commission agent holding a Permit purchasing on behalf of his principal or to a Registered dealer, or to a dealer holding a Certific .....

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such principal for or in relation to an export out of the territory on India by such principal himself or for packing of the goods for such export and that such goods will be so exported by such principal or will be so used in the packing of such goods; and (iv) that he would obtain a declaration in the prescribed form from such principal to the aforesaid effect. (f) the Registered dealer certifies in the prescribed declaration form that the goods purchased by him are intended for sale by him. .....

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except on a certificate. (1) There shall not be deducted from the turnover of sales, the resales of goods purchased by a dealer after the commencement of the Bombay Sales Tax (Amendment) Act, 1965, from a Registered dealer, as provided in sections 7, and 8 unless the dealer claiming deduction produces a bill or cash memorandum containing a certificate that the registration certificate of the selling dealer was in force on the date of sale of the goods to him. Such certificates shall be signed by .....

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ngly no deduction from the turnover of sales shall be allowed to the claimant dealer in respect of such resales. (2) There shall not be deducted from the turnover of sales, the resales of goods purchased by a dealer from a dealer registered under the Central Sales Tax Act, 1956 and who is liable to pay tax under section 4, as provided in section 7, and 8 unless the dealer claiming deduction produces, a bill or cash memorandum containing a certificate that the selling dealer is liable to pay tax .....

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ler, if, the turnover of all sales or of all purchases of the said dealer has, in the preceding year, exceeded rupees forty lakhs; (b) Subject to the provisions of clause (a), deduction from turnover of sales, as provided in that section shall be allowed up to the time the turnover of sales or purchases of a dealer, in a year, does not exceed rupees forty lakhs and shall not be allowed thereafter. (3A) Without prejudice to the provision of sub­section (3), no deduction from turnover of sale .....

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red dealer or from a dealer liable to pay tax under section 4, in such circumstances and subject to such conditions, as the State Government may prescribe. A perusal of these provisions would indicate that either there has to be a sales of goods to a Commission agent holding a Permit purchasing on behalf of its principal or to a registered dealer or a dealer holding a Certificate of Entitlement as provided under Sections 7, 8 and 8A. By Section 12A, there is no deduction permissible from turnove .....

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dule B or C in respect of any entry (or part thereof) in the said Schedule; and may, by like notification­ (a) omit or amend any entry (or part thereof), but not so as to enhance the rate of tax in any case; (b) transpose any entry by deleting it from one of the Schedules and inserting it in or adding it to another; and thereupon, the Schedule shall be deemed to have been amended accordingly: Provided that, no notification which transposes any entry from one Schedule to another as aforesaid, .....

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8 in certain cases. Where any entry (or part thereof) is transposed whether under section 17 or otherwise, by its deletion from one of the Schedules and its insertion in or addition to another Schedule, then if no tax on any sale or purchase of the goods specified in that entry (or part thereof) is leviable, the deductions provided in clause (ii) or clause (iii) of section 8 shall not apply to the resale of those goods. By Section 17, there is a power conferred in the State Government which sha .....

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part thereof, is leviable, the deductions provided in clause (ii) or clause (iii) of section 8 shall not apply to the resale of those goods. Therefore, there has to be a fulfillment of the precondition, namely, transposition, whether under Section 17 or otherwise. Secondly, there ought to be no tax on any sale or purchase of the goods specified in that entry or part thereof. It is only upon such situation that there will be no deduction provided in clause (ii) or clause (iii) of Section 8 and w .....

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aid to be applicable. 35. Thus, Chapter II is dealing with incidence and levy of tax, Chapter III deals with sales tax authorities and Tribunal, Chapter IV deals with registrations, licences, authorizations, recognitions and permits and by Chapter V, returns, assessment, payment, penalty, recovery and refund of tax are the matters dealt with. Though there is a reference made to some of the provisions in this Chapter V, dealing with 'drawback, set­off, refund etc.', we do not think th .....

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onpal. At the relevant time, Schedule A­39 read thus: 39 (a) Products of Village Industries defined in the Khadi and Village Industries Commission Act, 1956 and the Bombay Khadi and Village Industries Act, 1960; (1) When sold by a producer or a dealer certified for this purpose by the Commissioner after taking into account the recommendations of the Khadi & Village Industries Commission constituted under the Khadi and Village Industries Commission Act, 1956, or, as the case may be, of th .....

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dealer certified under condition (1) (Sales of manmade fibre and polyester and cotton blended silvers are exempted against BX from under Entry (215) by STA1085/CR97RES8 dt. 29785. w.e.f. 25-6-85 to 30-9-1995) 39 (a) Such products of Village Industries as are defined in the Khadi and Village Industries Commission Act, 1956 and Bombay Khadi and Village Industries Act, 1960, as may be notified by the State Government from time to time for the purpose of this entry. (1) When manufactured and sold b .....

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his purpose by the Commissioner after taking into account the recommendations of the Khadi and Village Industries Commission constituted under the Khadi and Village Industries Commission Act, 1956, or, as the case may be, of the Maharashtra State Khadi and Village Industries Board constituted under the Bombay Khadi and Village Industries Act, 1960 and who does not hold a trade mark or a patent in respect of the goods sold or who does not hold a patent in respect of the method or process of manuf .....

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ies Commission constituted under the Khadi and Village Industries Commission Act, 1956, or, as the case may be, of the Maharashtra State Khadi & Village Industries Board constituted under the Bombay Khadi and Village Industries Act, 1960, or 1-5-1994 to 30-9-1995 (2) When sold by another dealer who has purchased the goods from a producer or dealer certified under condition (1) (b) Khadi and readymade garments and other articles, prepared from Khadi. Explanation: For the purposes of this entr .....

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tra State Khadi & Village Industries Board constituted under the Bombay Khadi and Village Industries Act, 1960, or 11-8-1988 to 30-9-1995 (2) When sold by another dealer who has purchased the goods from a producer or dealer certified under condition (1) We are concerned with the Schedule A­39(a) as prevailing from 11th August, 1988 to 30th April, 1994. 36. A bare perusal of this would indicate that this entry was substituted w.e.f. 11th August, 1988 by Maharashtra Act No. 22 of 1988. It .....

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ng into account the recommendations of the KVIC or, as the case may be, of the Maharashtra State Khadi & Village Industries Board, or when sold by a dealer, who is certified for this purpose by the Commissioner after taking into account the recommendations as above, and who does not hold a trade mark or a patent in respect of the goods sold or who does not hold a patent in respect of the method or process of manufacturing the goods sold. Thus, two types of persons are dealt with by item (1) .....

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patent. 37. Therefore, for the purpose of this Schedule entry, there are specific conditions and which are to be found in Column 3. There are variations in this Schedule, but after 1st May, 1994, and we ought not be concerned therewith. 38. The Tribunal, in the order on the appeal, may have reproduced several provisions and Sections of the Act and the Schedule but what we are really concerned with is a factual position. What has emerged from the record is that 23 items were notified by the State .....

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at a price exceeding ₹ 30 but not exceeding ₹ 50/per pair. 12% 12% 1-1-21982 to 30-4-1994 (c) When sold at a price exceeding ₹ 50 per pair. 15% 15% 1-12-1982 to 30-4-1994 [Rate of tax is reduced to 8%, if the pair is sold upto ₹ 50/and to 10% if sold above ₹ 50/under entry (97B) by STA-1085/CR97/RES-8 dt. 29-7-85 w.e.f. 25-6-1985]. [Whole of the tax is exempted on the sales or purchases of plastic or rubber footwear sold or purchased at a price not exceeding ₹ .....

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dt. 2-6-94]. 42 Footwear 8% 8% 1-5-1994 to 30-9-1995 [By Entry (377(i)) Sales of plastic and rubber footwear when sold at a price not exceeding ₹ 50/per pair whole of tax is exempted w.e.f. 1594]. [By Entry (377(ii)) Sales of orthopaedic footwear by a dealer recognised by the commissioner; whole of tax exempted w.e.f. 1594]. [By Entry (377(iii)) Sales or purchases other than 377(i) or 377(ii); rate of tax is 4% w.e.f. 1-5-94 by STA-1094/12/T-2 dt. 2-6-94]. [In Entry 97(iv) in col. 2 and r .....

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e paper book. There are as many as 23 kinds of products of the industries which are found in the Notification. The Tribunal concluded from the same that these products are taxable in nature. To our mind, the Tribunal rightly understood the controversy before it. To our mind, and further, the Tribunal rightly noted that there are conditions specified in Schedule A­39 and which, upon fulfillment, would make the sale and purchase of these products free from tax. The Tribunal also rightly referr .....

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the two Acts have been promulgated. The KVIC Act has a definite object and purpose and that to provide for the establishment of a Commission for the development of khadi and village industries and for matters connected therewith. Both are distinct terms and understood by the preamble itself. Khadi as defined in Section 2(d) means any cloth woven on handlooms in India from cotton, silk or woollen yarn handspun in India or from a mixture of any two or all of such yarns. Then, 'village industr .....

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ised as a village industry at any time before the commencement of the KVIC (Amendment) Act, 1987 shall, notwithstanding anything contained in the sub­clause, continue to be village industry under this Act. 41. We need not refer to the KVIC Act and the provisions in further details. The Tribunal has rightly noted that it is this object and purpose which is sought to be achieved by encouraging the manufacturers and producers, importers and the dealers who deal in the products. However, though .....

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s which are described in entry A­39 are not tax free otherwise, but exigible to tax. It is only when the products are dealt with by the dealer specified, or rather certified, that all the benefits would follow. Therefore, the Tribunal understood this controversy in the first instance in a correct and proper perspective. 42. We are not in agreement with Mr. Sonpal that the Tribunal's order on the appeal was vitiated in any manner. Mr. Sonpal's argument centers around the fact criticis .....

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ound by referring to Section 5. Once Section 5 has been correctly understood by the Tribunal as its Subsection opens with a non obstante clause, and refers to certain conditions based on which the goods can be termed as 'tax free', then the further finding by the Tribunal is logical. It follows from its earlier references. 43. In paragraph 42 of the order of the appeal, the Tribunal concludes that from the nature of the entries found in Schedule A, it will be seen that, subject to certai .....

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The goods are not tax free, but since they are referable to Khadi and Village Industries Act which is a Central Statute, that the exemption from the ambit of taxation falls. 44. In paragraph 43 and 44 of the Tribunal's order, the findings read thus: 43. A dealer, like Khadi Bhandar, who is dealing in eight or nine figure turnover and is probably covering most of the 23 products notified by the government does not have to pay tax on its sales. The only condition is that it should be a registe .....

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as mentioned above. It is only in respect of Schedule entry A­39 that it is the dealer who is exempted from the ambit of taxation. The purpose, as mentioned above, is to promote the Khadi and Village industries' products. 44. There is another angle of looking at this controversy. Unless the producer of the goods notified by the K.V.I.C. is also certified dealer under class (2), the goods sold by him will be taxable in his hands. What will happen to the goods purchased from such second de .....

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esale as appearing then in Section 2(26), the Tribunal summarizes the pre­requisites or requirements on the fulfillment of which, resale takes place. They are rightly summarized in paragraph 45. 46. The Tribunal has also referred to the provisions as appearing after 11th August, 1988. The Tribunal observes that the structure of taxation has undergone a change. The Tribunal has noted those changes. 47. Ms. Badheka is right in contending that the whole controversy is approached by the Tribunal .....

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ported and sold by an importer certified for the purpose by the Commissioner and after taking into account the recommendations of the statutory entities, secondly, when such products of village industries as are defined in the KVIC Act and the Bombay Act, as may be notified from the State Government from time to time for the purpose of this entry, when sold by a dealer who is certified for this purpose by the Commissioner after taking into account the recommendations of the KVIC and the Bombay B .....

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oods sold. Thus understood, we have no hesitation in concluding that the products, if sold by such dealers, would be tax free. It is in these circumstances that we have no hesitation in rejecting the submissions of Mr. Sonpal. 49. The illustration set out in para 52 read by Mr. Sonpal cannot be read in isolation. All the paragraphs of the judgment would have to be read together. If so read, after referring to the submissions, the points for consideration and providing the factual backdrop, the T .....

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h are leather goods falling in entries C­II­42 and C­II­81, both at the time of purchase and sale. They are Schedule C goods when purchased and sold, and therefore, entitled to resale. We do not see how such conclusion can raise a question of law. When the Tribunal decided this matter and as elaborately as it did, how does any question of an interpretation of the provisions of law has not been clarified to us. The question as framed for our consideration and opinion is that, whet .....

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on the Reference Application, running into about 115 paragraphs, possibly thought that the Schedule entry was not properly and correctly interpreted. Once we have referred to the Schedule entry ourselves, and independent of the Tribunal's conclusions analyzed it, we do not think that it was incorrectly interpreted or misconstrued or misinterpreted at all. Therefore, there was no occasion for the Tribunal to refer these questions. 51. Possibly, it was for the second time engaged by the Reven .....

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h the order in the appeal, it could have brought a further appeal to this Court. However, the Tribunal, while passing the referring order, was of the view that there is specific exemption to particular class of dealers and the tax was not payable by the particular class of dealers. Thus, making distinction between leviability and nonleviability, the Tribunal had come to the conclusion that even after addition of explanation to Section 8, that has not made any difference. We think that the insert .....

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purpose of this section the expression 'resale of goods' means the resale of those goods on the sale of which tax was leviable under this section at the time of their purchase A perusal of this explanation would indicate that it defines, for the purpose of Section 8, the expression 'resale of goods' to mean resale of those goods on the sale of which, tax was leviable under this Section at the time of their purchase. 53. While making a reference of the above question to this Court .....

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he explanation has led to a reference of the above question no. 1, then we are very sorry to say that it is mere duplication. A lot of judicial time has been consumed and unnecessarily in this exercise. 54. We are, therefore, of the opinion that the Reference Application was decided unmindful of the fact that mere insertion of the Explanation does not render the conclusions recorded earlier perverse or vitiated in law. The second round on the same material was, therefore, unnecessary. 55. Mr. So .....

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s estimated by the Sales Tax Officer but the Sales Tax Officer held that the goods which were purchased form the registered dealers and which were covered at the time of such purchase by entry 42 of Schedule A to the Act, were liable to be taxed in accordance with the provision of the Bombay Act. The appellate authority, namely, the Assistant Commissioner of Sales Tax, also negatived the contention of the assessee that he was entitled to a deduction under Section 9(i)(ii) of the Act as it then s .....

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hich were covered by entry 42 of Schedule A to the Act at the time of the purchase but at the time of the sale they were covered by entry 4 of Schedule D. That was a question of law. After noting the arguments of both sides, the Division Bench of this Court concluded that the reference to Section 9(i) and 9(ii) in the question referred by the Tribunal is a mistake. Clause (ii) of Section 9 was the applicable clause. Section 9 provides for a general sales tax on the turnover of sales of goods spe .....

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the Division Bench concluded that before an assessee claims a deduction from his turnover, one of the conditions which he must satisfy is that the goods which are resold must be the goods which are specified in Schedule D and which he must have purchased from a registered dealer. Admittedly, in that case the goods in respect of which deduction was claimed, were not goods which were specified in Schedule D at the time when the assessee purchased them but they were covered by entry 42 of Schedule .....

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