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COMMISSIONER OF SALES TAX, UP. Versus AGRA BELTING WORKS, AGRA

1987 (4) TMI 82 - SUPREME COURT OF INDIA

Whether the High court was justified in holding that in the absence of a notification withdrawing the earlier Notification dated 25-11-1958 made in exercise of power vested under Section 4 of the U.P. Sales Tax Act, 1948, Sales, tax would not be exigible in terms of the Notification dated 1-12-1973 issued under Section 3A of that Act? - Held that:- Section 3 is the charging provision; Section 3 A authorises variation of the rate of tax and Section 4 provides for exemption from tax. All the t .....

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exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the statute that a notification of recall of exemption is a condition precedent to imposing tax at any prescribed rate by a valid notification under Section 3A, we see no force in the contention of the assessee which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notification - both for withdrawal of exemption and also for providin .....

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ior Advocate (Ashok K. Srivastava, Advocate, with him), for the appellant. S.T. Desai, Senior Advocate (K.B. Rohtagi, S.K. Dhingra, Baldev Aterya and Shashank Shekhar, Advocates, with him), for the respondent. [Judgment per : Ranganath Misra, J.]. - Special leave granted. 2. Delay of six days is condoned. 3. The short question for consideration in this appeal at the instance of the Revenue is whether the High court was justified in holding that in the absence of a notification withdrawing the ea .....

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ction 3A of the Act prescribed sales tax of seven per cent on the sale of beltings of all kinds. There is no dispute now that patta is a kind of belting material. 5. Section 3 of the Act contains the charging provision and prescribes a uniform rate of tax on sales. Section 3A empowers the State Government to modify the rate of tax by notification. The notification of 1973 in fact prescribes a rate of tax higher than provided by Section 3. In 1958, under the notification referred to above, patta .....

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belts from the notification issued under Section 4 of the Act." 6. As has been pointed out above, Section 3 is the charging provision; Section 3 A authorises variation of the rate of tax and Section 4 provides for exemption from tax. All the three sections are parts of the taxing scheme incorporated in the Act and the power both under Section 3A as also under Section 4 is exercisable by the State Government only. When after a notification under Section 4 granting exemption from liability, .....

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n under Section 3A, we see no force in the contention of the assessee which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notification - both for withdrawal of exemption and also for providing higher tax. When power for both the operations vests in the State arid the intention to levy the tax is clear we see no justification for not giving effect to the 2nd notification. We would like to point out that the exemption was in regard to a cla .....

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arned brother in his judgment so far as it relates to the scope and effect of the Notification dated 1-12-1973 made under Section 3A of the U.P. Sales Tax Act, 1948 by providing for imposition of sales tax on "beltings of all kinds" for the reasons given hereunder :- Under Section 4 of the U.P. Sales Tax Act, 1948 the Government issued two Notifications No. S.T.4486/X, dated 14-12-1957 and No. 4064/x-960(4)/58, dated 25-11-1958 whereby ''cotton fabrics of all kinds" were e .....

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are exempted from tax by virtue of the notifications dated 14-12-1957 and 25-11-1958. Similar question arose in the case of Porritts & Spencer Asia Ltd. v. State of Haryana "T1978: (42) S.T.C. 433 (S.C.) = 1983 E.L.T. 1607 (S.C.)] before this Court for consideration. It was held by this Court that the words "all varieties of cotton, woollen or silken textiles. in Item 30 of Schedule B to the Punjab General Sales Tax Act must be interpreted according to its popular sense, meaning & .....

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: it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear in its character as a textile. It may be used for making wearing apparel, or it may be used as a covering or bed-sheet or it may be used as tapestry or upholstery or as duster for clearing or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile." .....

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.)] where exemption was claimed on the basis of a notification under Section 4 of the Tamil Nadu General Sales Tax Act, 1959 in respect of hair-belting and cotton-belting as falling within Item No. 4 of the Third Schedule of the said Act. This Item No. 4 reads as follows :- "All varieties of textiles (other than durries carpets, druggets and pure silk cloth) made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool including handkerchiefs, towels, napkins, dusters, cotto .....

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[1980 4 S.C.C. 71 = 1980 E.L.T. 383 (S.C.)] the question arose whether rayon tyre cord fabric manufactured by the appellate company included within Item No. 18 inserted in the Schedule by the Rajasthan Taxation Laws (Amendment) Act, 1964 and rayon or artificial silk fabrics extended to exemption under Section 4(1) of the Rajasthan Sales Tax Act which provides for exemption of sales tax of goods specified in the Schedule. It has been held that the product falls within the exempted item rayon or a .....

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of all varieties as notified under Section 4 of the said Act being exempt from the imposition of sales tax. The question that falls for consideration is what is the effect of the notification issued under Section 3A of the said Act on 1-12-1973 mentioned in the Schedule "beltings of all kinds". There is no dispute nor any challenge that these beltings are cotton beltings falling within cotton fabrics of all kinds and as there is a general exemption granted by the notification issued in .....

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Act. It has been held in the case of Commissioner of Sales Tax v. M/s. Dayal Singh Kulfi Wala, Lucknow = 1980 U.P.T.C. 360 as follows :- "A fiscal statute like the one before me has to be interpreted strictly. If there is any ambiguity or doubt it should be resolved in favour of the subject. There is no equity about tax. The taxing liability must be express and absolute. In the present case, the specification of the goods for purposes of Section 3A is one thing, but whether or not such good .....

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