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1962 Supreme(SC) 147
SUPREME COURT OF INDIA
10th April, 1962
S.K. DAS, J.L. KAPUR, A.K. SARKAR, K. SUBBA RAO, M. HIDAYATULLAH, N. RAJAGOPALA AYYANGAR AND J.R. MUDHOLKAR, JJ.
Petition No. 195 of 1959.
M/s. Chhotabhai Jethabhai Patel and Co., Petitioners,
State of U.P. and others, Respondents;
with
Civil Appeal No. 99 of 1961;
M/s. Chhotabhai Jethabhai Patel & Co., Appellants
Versus
Sales Tax Officer, Agra and another, Respondents.
Petition No. 195 of 1959 with Civil Appeal No. 99 of 1961.
Advocates appeared
Mr. G. C. Mathur, Advocate, for Petitioners (in Petn. No. 195 of 59); Mr. M. C. Setalvad, Attorney General for India (Mr. G. C. Mathur, Advocate, with him), for Appellants, (in C. A. No. 99 of 61); Mr. H. N. Sanyal, Additional Solicitor General of India (Mr. C. P. Lal, Advocate, with him), for Respondents (in both the Petn. and Appeal).
C.P.LAL, G.C.MATHUR, H.N.SANYAL, M.C.SETALVAD
The exemption from sales tax granted by the notification issued by the U. P. Government was conditional and properly read it applies only to those goods on which additional Central Excise Duty was leviable and had been paid.
Headnote:
SALES TAX - Exemption - Notification - Interpretation - Additional Central Excise Duty - Handmade biris - Whether exempt from sales tax - U. P. Sales Tax Act (15 of 1948), Ss. 3(1), 4(1)(a), (b).
Fact of the Case:
The petitioner, a partnership firm carrying on business of selling biris, challenged the assessment of sales tax on the ground that the notification issued by the U. P. Government exempting certain articles from sales tax, including biris, was misconstrued and misapplied.
Finding of the Court:
The Court held that the notification issued by the U. P. Government exempting certain articles from sales tax, including biris, was correctly interpreted by the Sales Tax Officer and that the petitioner's sales did not fall within the exemption covered and given by the notification.
Issues: Whether the notification issued by the U. P. Government exempting certain articles from sales tax, including biris, was correctly interpreted by the Sales Tax Officer.
Ratio Decidendi: The Court held that the notification issued by the U. P. Government exempting certain articles from sales tax, including biris, was correctly interpreted by the Sales Tax Officer and that the petitioner's sales did not fall within the exemption covered and given by the notification.
Final Decision: The Court dismissed the appeal and the writ petition, but the parties were left to bear their own costs.
Judgment
KAPUR, J. : (Majority view : S. K. Das, A. K. Sarkar, M. Hidayatullah N. Rajagopala Ayyangar and J. R. Mudholkar, JJ.) This judgment will dispose of two matters which arise out of the same proceedings under the U. P. Sales Tax Act (1) a petition under Art. 32 and (2) an appeal against the judgment and order of the High Court of Allahabad passed in proceedings taken under Art. 226 of the Constitution.
2. One of the questions that arises in these two matters is the same which arose and has been decided in W. P. No. 79 of 1959 in which the judgment has been delivered today.
3. The facts giving rise to these two matters are these: The petitioner firm is a partnership firm carrying on business of selling biris and although its principal office is at Nadiad (Bombay State) it has a branch office at Agra in U. P. where biris manufactured by it are brought and sold. The firm was registered as a dealer under S. 8 of the U. P. Sales Tax Act (Act 15 of 1948) hereinafter called the Act under which a notification giving exemption in regard to sales tax on certain articles was notified by a notification of December 14, 1957, which has been set out at another place in this judgment. On February 27, 1959, the Sales Tax Officer, Agra, passed a provisional order of assessment of sales tax for the quarter from April 1, 1958 to June 30, 1958. The tax so assessed was Rs. 62,500. It is alleged that no notice was given to the petitioner firm. The notice of demand was issued on the same date. An appeal was taken against this order of assessment to the Judge (Appeals) and an application was made to the Commissioner of Sales Tax for a stay of the realisation of the tax assessed. The Commissioner on April 28, 1959 directed that if half of the amount assessed was deposited by the petitioner by April 30, 1959, the payment of the remaining amount shall be stayed pending the final assessment. On April 30, 1959, the petitioner firm deposited half the tax assessed i.e. Rs. 31,250.
4. On April 28, 1959, the petitioner firm moved the High Court under Art. 226 of the Constitution for a writ of certiorari quashing the assessment order and the second notice of demand and for a writ of mandamus directing the taxing authorities to forbear from recovering the tax. This petition was dismissed by the High Court by an order dated 14-5-1959. An application for a certificate under Art. 133(1)(c) of the Constitution was dismissed by the High Court on October 23, 1959 an against the order of dismissal of the petition under Art. 226, special leave was granted by this Court on December 18, 1959. A petition under Art. 32 of the Constitution was also filed by the petitioner firm on December 16, 1959, and rule was issued thereon and that is how the appeal against the High Court order made in proceedings under Art. 226 and the petition under Art. 32 of the Constitution have been brought to this Court.
5. On September 29, 1959, the Sales Tax Officer issued another notice calling upon the petitioner firm to submit returns for the period from December 13, 1957 to March 31, 1958. On October 19, 1959, a further notice was issued under S. 15(i)(a) to show cause why a penalty should not be imposed. This matter was not before the High Court as the petition in that Court was filed earlier but it has also been challenged in the petition under Art. 32 of the Constitution. For reasons given in W. P. No. 79 of 1959 this petition under Art. 32 is dismissed.
6. The appeal which the petitioner firm had filed before the Judge (Appeals) was dismissed and a revision taken against that order was also dismissed but these orders have not been challenged in any proceedings so far.
7. The appellant firm s contention in the appeal was that the order of the Sales Tax Officer limiting the exemption of Sales tax to biris on which excess Central Excise Duty had been paid was erroneous. It will be apposite at this state to truce the history of the exemption which is claimed by the appellant firm. Because
