Judgment

B. P. JEEVAN REDDY

( 1 ) THE question in this batch of appeals is whether the publishers of newspapers are entitled to the benefit of Section 8 (3 (b) read with Section 8 (1 (b) of the central Sales Tax Act, 1956, hereinafter referred to as the Act. If they are so entitled, they can purchase the raw material required by them at the concessional rate of 4%. If not, they will be liable to pay tax 10%. The Madras and Kerala High courts have taken the view that they are entitled to the said benefit while the Karnataka High court has held to the contrary. We may briefly indicate how the question arises.

( 2 ) THE publishers of newspapers require various goods, hereinafter referred to as the raw material, for producing, i. e. , for printing and publishing their newspapers. These publishers are registered as dealers under the Tax Act. They purchase their raw material from other registered dealers. Most of these purchases are inter-State purchases; in the hands of the selling dealers they are inter-State sales exigible to tax.

( 3 ) SECTION 8 prescribes the rate of tax on inter-State sales. Ss. (1 says that "every dealer who in the course of inter-State trade or commerce. . . (b) sells to a registered dealer other than the government goods of the description referred to in Ss. (3, shall be liable to pay tax under this Act which shall be 4% of his turnover". According to this sub-section, a dealer selling goods of the description referred to in Ss. (3 to a registered dealer is entitled to pay a concessional rate of tax, viz. , 4% subject to compliance with Ss. (4, as will be explained presently. Ss. (2 says that where the inter-State sale pertains to goods not falling under Ss. (1, the selling dealer shall pay tax at a higher rate, i. e. , if they are declared goods, he shall pay at twice the rate applicable to the sale or purchase of such goods inside the appropriate State and in the case of other goods, 10% or at the rate applicable to the sale inside the appropriate State, whichever is higher. Ss. (3 specifies the goods for the purposes of clause (b) of Ss. (1 of Section 8. We are concerned herein only with clause (b) in Ss. (3. Having regard to its crucial relevance, it would be appropriate to set out clause (b) of Ss. (3:

" (3 The goods referred to in clause (b) of Ss. (1)438 (a) [omitted] (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the central government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power;" (emphasis ours)

( 4 ) CLAUSE (b) thus refers to three categories of goods, viz. , (i) goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him; (ii) goods specified in the certificate of registration of the registered dealer purchasing the goods for use by him in the manufacture or processing of goods for sale, subject to any rules made by the central government in that behalf; (iii) goods of the class or classes specified in the certificate of registration of registered dealer purchasing goods for use by him in mining or in the generation or distribution of electricity or any other form of power. We are concerned herein with the second category among the said three. Ss. (4 of Section 8 says that provisions of Ss. (1 shall not apply to any sale unless the selling dealer furnishes to the prescribed authority in the prescribed manner "a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority". The rules framed under the Act prescribe the authority and other particulars contemplated by Ss. (4 (a ). The rules prescribe the form of