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TMI Blog2022 (12) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry No. 7 of the Schedule-I of the UPVAT Act and which in law is a specific entry." 2. While in Commercial Tax Revision No. 281 of 2022, the Court admitted the revision on an additional question of law which is as under:- "iv. Whether the term Porridge occurring in Entry No. 36 of the Schedule of UPVAT Act excludes instant porridge as the latter sui generis a class of instant food as opposed to natural food." 3. As the first question which has been framed in all the four revisions is same, thus they are heard together and are decided by a common order. 4. Before proceeding to decide the question of law as framed above, a cursory glance of the facts of the case is necessary for better appreciation, which are as under:- 5. Applicant/revisionist is a private limited company registered under the provisions of the Companies Act, and is engaged in the business of resale of goods by way of "direct selling method" in almost all States of India including the State of U.P. The applicant is registered under the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter called as 'VAT Act') and the Central Sales Tax Act, 1956 (hereinafter referred as 'CST Act'). The dispute in Revision No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject, then the special prevails over the general. Reliance has been placed upon decision of Hon'ble Apex Court in case of Commercial Tax Officer Rajasthan vs. M/s. Binani Cements Ltd. and another, Civil Appeal No. 336 of 2003, decided on 19.02.2014. 10. He then submitted that entry printed material is a general entry and no doubt in the absence of a specific entry for books, the item books be covered under the general entry, and once this Court has held brochure to be within the meaning of books, the authorities cannot deny the benefit. A reliance has also been placed upon a Division Bench judgment of Karnataka High Court in case of Nanjundeshwara Mart vs. State of Karnataka, 1992 84 STC 534 KAR. 11. Sri A.C. Tripathi, learned Standing Counsel appearing for the State submitted that after the implementation of the VAT Act in the State of U.P. in the year 2008, specific entries have been made in Schedule-I and Schedule-II-A which deciphers the goods which are exempted from tax from those goods which are liable to be taxed @ 4%. 12. According to State counsel, the charging Section 7-B of the VAT Act clearly provides that tax shall not be levied on certain sales and purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken up first and decided. 19. Before proceeding to decide the above question of law, a cursory glance of Section 7 of the VAT Act is necessary for better appreciation of the case as it is the charging section and the entire controversy hinges around Section 7, Schedule-I Entry 7 and Schedule-II-Part-A Entry 100 which are extracted hereasunder:- "Section 7. Tax not to be levied on certain sales and purchases.- No tax under this Act shall be levied and paid on the turnover of- (a) sale or purchase where such sale or purchase takes place- (i) in the course of inter-State trade or commerce; or (ii) outside the State; or (iii) in the course of the export out of or in the course of the import into, the territory of India; (b) sale or purchase of any goods named or described in column (2) of the Schedule-I of this Act or; (c) such sale or purchase; or sale or purchase of such goods by such class of dealers, as may be specified in the notification issued by the State Government in this behalf: PROVIDED that while issuing notification under clause (c), the State Government may impose such conditions and restrictions as may be specified. Schedule-I Entry 7. Books and per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere liable to be exempted and what to be taxed at the rate specified in the Schedule. Entry 7 of Schedule-I specifically provides for the books and journals including braille books, maps, charts and globe and also work books bearing the name of the author thereon or prescribed in syllabus of any educational Board or Council. Simultaneously, Schedule-II Part-A is the list of goods which are to be taxed @ 4% and Entry 100 is of printed materials including diary and calendar. The argument of revisionist counsel to the extent that books include brochure cannot be accepted, as brochures are nothing but promotional and advertising material, which provide multiple information and have been rightly held by the Tribunal to be covered under the category printed material. 25. Prior to the Act of 2008, the field was occupied by the notification of 1956 which only provided for exemption of books, magazines and exercise books. There was no entry to the effect such as printed materials on which the tax was levied, thus, distinguishing between books and printed material. 26. In the present tax regime, Schedule-I and Schedule-II has distinguished between the exemption of goods, and the goods whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of interpretation of an exemption notification, which we need to consider herein. IRC v. James Forrest [IRC v. James Forrest, (1890) LR 15 AC 334 (HL)] is a case which does not discuss the interpretative test to be applied to exemption clauses in a taxation statute-however, it was observed that : (AC p. 338) '... it would be unreasonable to suppose that an exemption was wide as practicable to make the tax inoperative, that it cannot be assumed to have been in the mind of the legislature' and that exemption 'from taxation to some extent increased the burden on other members of the community'. (AC p. 340) Though this is a dissenting view of Lord Halsbury, LC, in subsequent decisions this has been quoted vividly to support the conclusion that any vagueness in the exemption clauses must go to the benefit of the Revenue. Be that as it is, in our country, at least from 1955, there appears to be a consistent view that if the words in a taxing statute (not exemption clause) are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and it does not matter if the taxpayer escapes the tax net on account of the Legislature's failure to express i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t laid down that eligibility clause in relation to exemption notification must be given strict meaning and in para 44, it was further held : (SCC pp. 289-290) "44. The principle that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted, would have no application to construction of an exemption notification, as in such a case it is for the assessee to show that he comes within the purview of exemption (see Novopan India Ltd. v. CCE [Novopan India Ltd. v. CCE, 1994 Supp (3) SCC 606] )." 65. As already concluded in paras 53 to 55 and 63, above, we may reiterate that we are only concerned in this case with a situation where there is ambiguity in an exemption notification or exemption clause, in which event the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principle that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Both the situations are different and while considering an exemption notification, the distinction cannot be ignored. 29. Thus, from the reading of the above, it is clear that the issue in regard to exemption cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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