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SUPREME COURT OF INDIA
H.L. DATTU, S.A. BOBDE, JJ.
State of Jharkhand & Ors. – Appellants
Vs.
M/s. La Opala R.G. Ltd. – Respondent
[Civil Appeal No. 2240 of 2006]
Decided On : 27-03-2014
(1990) 4 SCC 256; (2011) 12 SCC 499; Hansraj Gordhandas; Mahaan Dairies; Bhalla Enterprises; Tata Iron & Steel Co. Ltd.; Kartar Rolling Mills; Eagle Flask Industries Ltd.; (2005) 7 SCC 396; (2009) 12 SCC 735; Rukmani Pakkwell Traders – Relied upon
(b) Central Sales Tax Act, 1956 – Section 8(5)(b) – Exemption notification – ‘Types of glass’ and ‘Forms of glass’ – Have different import – It cannot be said that "types of glass" could have been intended to refer to or include "forms of glass" – (Para 26, 28)
Facts of the case:
The respondent-dealer is a dealer registered under the provisions of the Bihar Finance Act, 1981 and the Central Sales Tax Act, 1956.
Immediately after issuance of the notification under clause (b) of sub-section 5 of Section 8 of the Act, the respondent-dealer informed the authorities under the Act, that, since the respondent-dealer would be covered by the notification, the rate of tax payable on glassware in inter-state sales would be at the reduced rate of 3%.
The respondent was informed that it would be liable to pay tax at the rate of 4 per cent on its inter-state sales if made to a registered dealer and at the rate of 12 per cent if made to an unregistered dealer. It was further informed that the product manufactured by him is glassware and, therefore, not covered under the notification.
The High Court allowed the writ petition filed by the respondent and quashed the letters issued by the authorities.
Finding of the Court:
Expressions ‘Types of glass’ and ‘Forms of glass’ have different import.
ORDER :
1. This appeal is directed against the judgment and order passed by the High Court of Jharkhand at Ranchi in W.P. [T] No.4572 of 2004, dated 22.06.2005. By the impugned judgment and order, the High Court has set aside the letter issued by the Assistant Commissioner of Commercial Taxes, Deogarh Circle, dated 13.05.2004, whereby the Assessing Authority has rejected the stand of the respondent-dealer that it is eligible to pay reduced rate of tax under the notification S.O. No.25 (for short, "the notification") issued by the Government of Jharkhand, dated 25.06.2001 and directed the respondent-dealer to deposit taxes in relation to inter-State sales at the rate of 4%.
2. The possible construction that could be placed on the aforesaid notification is the subject matter of this appeal.
3. The conspectus of facts is: the respondent-dealer is a Public Limited Company incorporated under the provisions of the Companies Act, 1956 engaged in the manufacture of glass and glassware made of Opal glass. The industrial unit of the respondent-dealer is situated at Madhupur in Deoghar district, Jharkhand.
4. The respondent-dealer is a dealer registered under the provisions of the Bihar Finance Act, 1981 and the Central Sales Tax Act, 1956 ("the Act", for short).
5. The State Government, in exercise of its powers under clause (b) of sub-section 5 of Section 8 of the Act has issued the notification. Since the construction of the notification is in issue, we deem it appropriate to extract the notification. It reads as under: "S.O.25, dated the 25th June, 2001 - In exercise of the powers conferred by clause (b) of sub-section (5) of Section 8f of the Central Sales Tax Act, 1956 (Act 74 of 1958) the Governor of Jharkhand is pleased to direct that tax payable under sub-section (1) or (2) of Section 8 of the said Act in respect of Sale of all types of glass and glass sheets in the course of interstate sale or commerce from any place of business in the State of Jharkhand shall be calculated at the rate of three per centum and no statutory form in this regard shall be required.
2. This notification shall come into force with effect from 16th June, 2001."
6. Immediately after issuance of the notification, the respondent-dealer by letter dated 27.05.2002 had informed the authorities under the Act, that, since the respondent-dealer would be covered by the notification, the rate of tax payable on glassware in inter-state sales would be at the reduced rate of 3%. Unfortunately, the authorities did not respond to the request so made by the dealer.
7. Later, the authorities issued a letter dated 09.01.2004 to the respondent manufacturer, inter alia, directing him to deposit the tax in relation to its transactions in respect of the inter-state sales to registered and unregistered dealers at the rate of 4% and 12%, respectively. The respondent was also directed to show-cause as to why a penalty under Sections 16 and 16(9) of the Bihar Finance Act, 1981 and the Act should not be imposed and the respondent not be directed to correct the returns and deposit tax at the rate of 4%, if the sales is effected to registered dealers and at the rate of 12% if the inter-state sale is effected to un-registered dealers.
8. The respondent-dealer had filed its reply, dated 16.01.2004, wherein it took the stand that it was liable to charge and deposit tax at the rate of 3 per cent on sale in the course of inter-state trade in respect of its products; that the returns had been correctly filed and that the tax was validly deposited at the rate of 3 per cent.
9. After the issuance of the aforesaid letter/notice, the authorities by their letter dated 13.05.2004, rejected its stand and informed that the respondent would be liable to pay tax at the rate of 4 per cent on its inter-state sales if made to a registered dealer and at the rate of 12 per cent if made to an unregistered dealer.
10. Further, the respondent-assessee was informed by the authorities that the product manufactured by
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