http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9  

PETITIONER: DEPUTY COMMISSIONER OF SALES TAX ETC. ETC.

       Vs.

RESPONDENT: AYSHA HOSIERY FACTORY (P) LTD. ETC. ETC.

DATE OF JUDGMENT16/01/1992

BENCH: RAMASWAMI, V. (J) II BENCH: RAMASWAMI, V. (J) II RANGNATHAN, S. OJHA, N.D. (J)

CITATION:  1992 AIR  874            1992 SCR  (1) 140  1992 SCC  Supl.  (2) 178 JT 1992 (1)   379  1992 SCALE  (1)207

ACT:           : Central Sales Tax Act, 1956.           : Sections 6(1-A), 8,9: Tax on sale of goods  in inter-state  trade-Liability of dealer-Rate  of  tax-Whether applicable  under the local Act at the particular  point  of time.      Kerala   General  Sales  Tax  Act,  1963   [1]   Kerala Additional Sales Tax Act, 1978 :      Additional  levy  imposed under  the  1978  Act-Whether amounts  to  amending the Sales  tax  Act-Such  levy-Whether could be applied to interstate sales.

HEADNOTE:      The  Kerala Additional Sales Tax Act, 1978  sought  to impose  an  additional sales tax at 10% of the rate  of  tax already  imposed  under the Kerala General  Sales  Tax  Act, 1963, on all taxable sales and purchases in the State.      The assesses challenged before the High Court, the levy of  additional  sales tax in respect  of  their  inter-state sales  on  the  ground  that the  said  levy  could  not  be considered  as  a  levy  under the  sales  tax  law  of  the appropriate  State within the meaning of Section  8(2-A)  of the  Central Sales Tax Act, and for the purpose  of  levying Central  Sales Tax only the rate of tax as per the  original Kerala  General  Sales  Tax Act, 1963 shall  be  taken  into account.  It  was  also contended that the rate  of  tax  on interstate  sales  payable under Section 8  of  the  Central Sales  Tax  Act  cannot be increased  by  any  amendment  or legislation by the State.      The  High Court having upheld the challenge, the  State has preferred the present appeals by special leave.      On the question whether the additional tax levied could also  be considered as sales tax under the Sale tax  law  of the State, for the purpose of Central Sales Tax levy.                                                        141 Allowing the appeals, this Court, HELD  :1.1  The definition provided by Section 2(i)  of  the Central sales Tax Act does not say that the sales tax law or the  general  sales tax law which levies taxes  on  sale  or purchase  of goods shall be under a single enactment.   What

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 9  

is  relevant  is whether the tax partakes the  character  of sales  tax  or purchase tax. Any  other  construction  would restrict the applicability of Section 8(2-A) of the  Central Sales Tax Act to the sales tax law that was in force in 1956 when  the  Central  Sales Tax Act came into  force  and  any amendment to the local law would not have any effect on  the applicability of that provision. If a particular intra-state sale   transaction  in  a  particular  assessment  year   is subjected  to  a particular rate of tax  that  automatically gets reflected in and had to be taken into consideration for finding the rate and the applicability of Section 8(2-A)  or section 8(2) (b) of Central Sales Tax Act.  [146F-G; 147-A]      1.2  Instead  of an additional Sales Tax  Act,  if  the legislature has simply amended the Kerala General sales  tax Act by varying the rate, automatically that will come in for consideration  and application of the provision  of  Section 8(2) (b) and 8 (2-A) of the Central Sales Tax Act. For  this purpose  amendment of the State Act is not considered as  an amendment  of the Central Sales Tax Act. But since the  rate applicable to the intra-state sales at a particular point of time is a relevant consideration for finding out the rate of tax  on  inter-state  sale the amendment of  the  State  Act automatically  has the effect of changing the rate  provided under Section 8 of the Central Sales Tax Act. That is not to say   that  the  Central  Act  is  amended  by   the   State Legislature.   The rates of tax in certain cases  under  the Central  Act are linked to the rates fixed under  the  local Acts and that is how the amendment of the local Act  affects the rates under the Central Act. It is still the Central Act that is applied but only for purposes of fixing the rate  of tax leviable under the Central Sales Tax Act, the provisions of the local Act are looked into.  So construed there is not doubt  that  in all cases where the rate of  tax  under  the local  law is less than four per cent that will be the  rate applicable to the inter-state sales of the same commodity if the  provisions of Section 8(2-A) of the Central  Sales  Tax Act  are applicable. The dealer undoubtedly would be  paying at the rate as enhanced by the Additional Sales Tax Act  and therefore  that  will  be the rate  that  is  including  the additional  tax, that is to be taken into consideration  for finding  out  the  applicability of Section  8(2-A)  of  the Central Sales Tax Act and the rate of tax in respect of  his inter-state  sales turnover.  Therefore the respondents  are liable to pay sales tax at the rate including the additional sales  tax  in respect of their inter-state sale  under  the Central Sales  Tax assessment orders.                                                        142      1.3 For the purpose of applicability of Section  8(2-A) of the CST Act one has to look to the rate of tax applicable for  the  time being under the local Act and not a  rate  of tax  which  was applicable under the local Act at  the  time when  the CST Act was enacted.  Any amendment in  the  local Act  ultimately will have a reflection in the assessment  of the inter-state sales.  [147A-F]      1.4 However, where a notification has been issued under Section 8(5) of the Central Sales Tax Act, the amendment  to the State Act will not have any affect on the notification.      Janta Expeller Company & Ors. v. Assistant Commissioner (Assessment) Sales Tax, Special Circle, Trichur, 49 STC 216, referred to.

JUDGMENT:     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4042 of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 9  

1987 etc. etc.      From  the  Judgment and Order dated  11.7.1986  of  the Kerala High Court in T.R.C. No. 9 of 1985.      P.S. Poti and K.R. Nambiar for the Appellants.      A.S.  Nambiar,  G.  Vishwanatha Iyer,  G.B.  Pai,  P.H. Parekh,  P.K.  Manohar, Smt. Shanta  Vasudevan,  Ms.  Malini Poduval, S. Sukumaran and N. Sudhakaran for the Respondents.      The Judgment of the Court was delivered by      V.  RAMASWAMI,  J.  Leave  granted  in  Special   Leave Petition Nos. 8417 and 8492-93 of 1987.      In  this batch of appeals the appellants are the  State of Kerala.  The respondents are registered dealers under the Kerala  General Sales Tax Act, 1963, hereinafter called  the State  Act as well as under the Central Sales Tax Act,  1956 hereinafter  called  the Central Act. Some of  the  assesses carry on the business of sales and purchase of Coir products which  is  taxable under the State Act at 2%,  some  of  the dealers carry on business of Hosiery which is taxable at 3%. The  respondents-assessee  in Civil Appeal Nos.  1426-27  of 1988  deal in automobile spares which is taxable at 15%  and the  assessee  in  Civil Appeal No. 1015 of  1988  deals  in transformer  which  is taxable at 10%.   The  respondent  in Civil   Appeal  No. 4386  of 1988 is a  dealer  in  titanium dioxide,  Cement, and Paints products which are  taxable  at 10% and the                                                        143 respondent  in Civil Appeal No. 189 of 1990 is a  dealer  of Sewing Thread which is taxable at 3%.  The assessee in Civil Appeal  No. 5557 of 1990 is a dealer in rice taxable at  2%. Under  the Kerala Additional Sales Tax Act (20 of 1978)  all taxable sales and purchases in the State including the local sales  of  Coir, Hosiery, Rice, Automobile  parts,  titanium dioxide, Cement, Paints and transformers etc.  With which we are  concerned,  were subjected to an additional  sales  tax calculated  at 10% of the rate of tax already imposed  under the  Kerala General Sales Tax Act, 1963.  The result  of  it was where the rate of tax was 2% the tax payable became 2.2% where  it was 3% it was 3.3%, 10% became 11%, 15%.   In  all these  cases  the  assessments in question  were  under  the Central Sales Tax Act.  The Kerala Additional Sales Tax  Act came  into force with effect from 1st April, 1978.   In  the present appeals the assessment year in question were  either 1978-79  or  subsequent  thereto.   The  assessing  officers sought  to levy tax in respect of the inter-state  sales  of the  assesses  by including the additional sales  tax.   The assesses  questioned the inclusion of the  additional  sales tax levy in respect of their inter-state sale on ground that the  levy under the Kerala Additional Sales Tax Act  is  not and  could not be considered as a levy "under the sales  tax law of the appropriate State" within the meaning of  section 8(2-A)  of  the Central Act and for the purpose  of  levying Central Sales Tax in view of the provision of section 8(2-A) of  the  CST Act only the rate of tax as  per  the  original Kerala  General  Sales  Tax Act, 1963 shall  be  taken  into account.  They also contended that the rate of tax on inter- state  sales  payable  under section 8 of  the  Central  Act cannot be increased by an amendment of the State Act or  any legislation by the State.  All the revision petitions  filed by  the  assesses were allowed by the High Court  of  Kerala accepting  their  contention following the judgment  of  the Division  Bench  of  the same Court  reported  in  Assistant Commissioner  (Assessment)  Sales  Tax  v.  Janata  Expeller Company and Ors., 64 STC 435 which confirmed a Single  Judge judgment  in  Janata Expeller Company &  Ors.  v.  Assistant Commissioner   (Assessment)  Sales  Tax,   Special   Circle,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 9  

Trichur, 49 STC 216.      Before  we deal with the decision relied on by them  it is better we set out the relevant provisions and  understand the scope and implications of the same.          "8.  Rates of tax on sales in the course of  inter-          state  trade or commerce-(1) Every dealer,  who  in          the course of inter-State trade or commerce-          (a)  sells on the Government any goods; or                                                         144          (b)  sells  to a registered dealer other  than  the               Government  goods of the description  referred               to in sub-section (3); shall be liable to  pay               tax  under  this  Act,  which  shall  be  four               percent of the turnover.          (2)  The tax payable by any dealer on his  turnover          in  so  far  as the turnover or  any  part  thereof          relates  to  the  sale of goods in  the  course  of          inter-State  trade or commerce not  falling  within          sub-section (1)-          (a)  in  the  case  of  declared  goods  shall   be               calculated at twice the rate applicable to the               sale  or  purchase of such  goods  inside  the               appropriate State; and          (b)  in  the  case  of goods  other  than  declared               goods, shall be calculated at the rate of  ten               per cent or at the rate applicable to the sale               or   purchase   of  such  goods   inside   the               appropriate State whichever is higher;          and for the purpose of making any such  calculation          any  such  dealer shall be deemed to  be  a  dealer          liable  to pay tax under the sales tax law  of  the          appropriate   State,  notwithstanding that  he,  in          fact, may not be so liable under that law.          (2A)  Notwithstanding  anything contained  in  sub-          section  (1A)  of section 6 or sub-section  (1)  or          clause (b) of sub-section (2) of this section,  the          tax  payable  under  this Act by a  dealer  on  his          turnover  in  so far as the turnover  or  any  part          thereof relates to the sale of any goods, the  sale          or,  as the case may be, the purchase of which  is,          under  the sales tax law of the appropriate  State,          exempt from tax four percent (whether called a  tax          or  fee or by any other name), shall be nil or,  as          the  case may be, shall be calculated at the  lower          rate.          Explanation- For the purposes of this sub-section a          sale  or purchase of any goods shall not be  deemed          to be exempt from tax generally under the sales tax          law of the appropriate State if under that law  the          sale  or purchase of such goods is exempt  only  in          specified   circumstances   or   under    specified          conditions  or  the tax is levied on  the  sale  or          purchase  of  such  goods at  specified  stages  or          otherwise  than with reference to the  turnover  of          the goods.                                                        145          (3)....................          (4)....................          (5)  Notwithstanding  anything  contained  in  this          section,  the  State  Government  may,  if  it   is          satisfied  that  it is necessary so to  do  in  the          public  interest, by notification in  the  official          Gazette,  and subject to such conditions as may  be          specified therein, direct-          (a)  that no tax under this Act shall be payable by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 9  

             any dealer having his place of business in the               State  in respect of the sales by him, in  the               course of inter-state trade or commerce,  from               any  such place of business of any such  goods               or classes of goods as may be specified in the               notification,  or  that the tax on  such  sale               shall  be calculated at such lower rates  than               those  specified  in sub-section (1)  or  sub-               section  (2)  as  may  be  mentioned  in   the               notification ;               that in respect of all sales of goods or sales               of  such classes of goods as may be  specified               in  the  notification, which are made  in  the               course  of inter-State trade or  commerce,  by               any class of such dealers as may be  specified               in the notification, to any person or to  such               class  of persons as may be specified  in  the               notification,  no tax under this Act shall  be               payable  or  the tax on such  sales  shall  be               calculated  at  such lower  rates  than  those               specified  in sub-section (1)  or  sub-section               (2) as may be mentioned in the notification."      In all these appeals the inter-State sales in  question which  are sought to be taxed admittedly do not  fall  under sub-section (1) or clause (a) of sub-section (2) of  section 8  of  the CST Act. The sales were of goods other  than  the declared  goods, therefore, under clause (b) of  sub-section (2)  of  section  8 the tax payable by  the  dealer  on  his turnover  shall be calculated at the rate of 10% or  at  the rate applicable to the sale or purchase of such goods inside the  State whichever is higher.  However, sub-section  (2-A) of   this  section  states  that  notwithstanding   anything contained  in clause (b) of sub-section (2) the tax  payable under  the  Central Sales Tax Act by the  dealer  where  the intra-state sale of the same under the ‘sale tax law’ of the State  is  "exempt  from tax generally  or  subject  to  tax generally at a rate which is lower than four per cent  shall be  nil  or as the case may be shall be  calculated  at  the lower  rate."  Thus if an intra-state sale by the dealer  is exempt then his inter-State                                                        146 sale also will be exempt.  If the intra-State sale is  taxed at a rate which is lower than four percent, then his  inter- State sale of the same commodity shall also have to be taxed at  the lower rate applicable in the State.  But  where  the rate  of tax  applicable to intra-State sale was  more  than four  percent then the rate applicable for inter-State  sale will  be  nil  or the rate applicable  for  the  local  sale whichever  is higher.  The question for consideration is  as to whether the additional tax levied under Kerala Additional Sales  Tax Act is also to be considered as sales  tax  under the  ‘sales tax law’ of the State.  The question  could  not have arisen but for the fact that this additional levy  came to be imposed under a separate Act. Had the additional Sales Tax  been  imposed  by  simply amending  the  rates  in  the original Act the question would not have arisen.  But we are of the view that this makes no difference and it is merely a matter  of style of legislation.  The additional  sales  tax levied  under the  Sales Tax Act is also a sales tax of  the same category as in the original Act.  The Kerala Additional Sales  Tax Act provides that "The tax payable  under  Kerala General  Sales  Tax  Act, 1963  (15  of  1963)  (hereinafter referred   to  as the State Act) for  every  financial  year commencing   from  the  financial  year  1978-79  shall   be increased by 10 per cent of such tax" instead of  increasing

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 9  

the  rate  of  tax for each of  the  commodities  which  are covered  by  the  Kerala  General  Sales  Tax  Act  by   one comprehensive provision the tax is increased by 10% over the rate  provided under the original Act in respect of all  the commodities the sale or purchase of which are taxable.  Both take the form of sales tax and in the case of assessment  of local sales it makes no difference whether it is called  tax and  additional  tax or one higher percentage  of  tax.   In truth  and  effect  it  is a levy of tax  on  the  sales  or purchase  of  the  dealers.  However, it  was  contended  on behalf  of the assesses that the words "under the  sale  tax law of the appropriate State" in Section 8 (2-A) of the  CST refers to only the General Sales Tax Act provisions and  not the  additional Sales Tax Act provisions.  Section  2(i)  of the Central sales Tax Act defines ‘sale tax law’ as  meaning "any  law for the time being in force in any State  or  part thereof which provides for the levy of taxes on the sale  or purchase  of  goods  generally or  on  any  specified  goods expressly  mentioned in that behalf and ‘general  sales  tax law’ means the law for the time being in force in any  State or  part thereof which provides for the levy of tax  on  the sale  or purchase of goods generally."  The definition  does not  say that the sale tax law or the general sales tax  law which  levies  taxes on sale or purchase of goods  shall  be under  a single enactment.  What is relevant is whether  the tax  partakes  the character of sales tax or  purchase  tax. Any  other construction would restrict the applicability  of section  8 (2-A) of the CST Act to the sales tax law was  in force in 1956 when the Central Sales Tax Act came into force and any amendment to the local law would not have any affect on the applicability of that provisions.  We do not see  any logic or reason for such a                                                        147 construction.   What is relevant is if a  particular  intra- state  sale transaction in a particular assessment  year  is subjected  to  a particular rate of tax  that  automatically gets reflected in and had to be taken into consideration for finding the rate and the applicability of section 8 (2-A) or Section 8(2)(b) of Central Sales Tax Act.  As already stated if  instead of an additional sales tax Act  the  legislature has  simply  amended  the Kerala General Sales  Tax  Act  by varying  the  rate  automatically  that  will  come  in  for consideration  and application of the provisions of  Section 8(2)(b)  and  8(2-A)  of  the CST  Act.   For  this  purpose amendment of the State Act is not considered as an amendment of the Central Sales Tax Act.  But since the rate applicable to the intra-state sales at a particular point of time is  a relevant  consideration for finding out the rate of  tax  on inter-State   sale   the   amendment  of   the   State   Act automatically  has the effect of changing the rate  provided under  Section 8 of the Central Sales Tax Act.  That is  not to  say  that  the  Central Act  is  amended  by  the  State Legislature.   The rates of tax in  certain cases under  the Central  Act are linked to the rates fixed under  the  local Act and that is how the amendment of the local acts  affects the  rates under the Central Act.  It is still  the  Central Act that is applied but only for purposes of fixing the rate of  tax  leviable  under  the  Central  Sales  Tax  Act  the provisions  of the Local Act are looked into.  So  construed we  have  no doubt that in all cases where the rate  of  tax under the local law is less than four per cent that will  be the  rate  applicable to the inter-state sale  of  the  same commodity if the provisions of Section 8(2-A) of the CST Act are  applicable.  The dealer undoubtedly would be paying  at the  rate  as enhanced by the Additional Sales Tax  Act  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 9  

therefore  that  will  be the rate  that  is  including  the additional  tax, that is to be taken into consideration  for finding  out the applicability of section 8(2-A) of the  CST Act and the rate of tax in respect of his inter-State  sales turnover.   There  could  be therefore  no  doubt  that  the assessees-respondents in all these cases are liable  to  pay sales tax at the rate including the additional sales tax  in respect  of their inter-State sales under the Central  Sales Tax assessment orders.      The High Court has reversed the order of the assessment in  all  these cases relying on the decision  of  a  learned Single  Judge in Janata Expeller Co. case 49 STC  216  which was  affirmed  on appeal by the Division Bench of  the  same High  Court  in  64  STC 435.   That  case  related  to  the assessment of a dealer in relation to his inter-State  sales turnover of coconut oil and cake.  Under the Kerala  General Sales Tax Act, 1963 the local sales of coconut oil and  cake were  taxable  at 2%.  By reason of  the  Kerala  Additional Sales  Tax Act, 1978 the rate of tax had increased to  2.2%. In  exercise of the power under section 8(5) of the  Central Sales Tax Act the State Government on 1.4.1966 notified that the Government "being satisfied that it is necessary so                                                        148 to do in the public interest, hereby direct that in  respect of  coconut oil and its cake the tax payable under the  said Act  by  an oil miller having his place of business  in  the State  of  Kerala in respect of the sale by  him  from  such place of business of the said goods in the course of  inter- State trade or commerce shall be calculated at 1 percent  on the sale price of the goods so sold subject to the condition that  the turnover of coconut or copra, from which the  said goods were produced by him in his mill within the State,  is assessed  to tax or is liable to tax at his hands under  the Kerala  General Sales Tax Act.  This notification came  into force  with  effect  from  1.4.1966.   When  the   assessing authorities sought to levy the additional tax imposed  under the additional Sales Tax Act, 1978 in respect of the  inter- state sale and called upon the assessees to pay at 1.1%, the dealers questioned the assessment orders on the ground  that when once a notification has been made under Section 8(5) of the  Central Sales Tax Act fixing the rate for  purposes  of C.S.T.  any  change in the rate of tax under the  local  act will  have no impact on the notification itself  unless  the notification  also is modified or amended giving  effect  to the  amendment.   This  contention  was  accepted  by  Kochu Thommen.  as  he then was, in the judgment  in  the  Janatha Expeller  Co.  & Ors. case (supra).  No exception  could  be taken  to  this view of the learned Judge.  Because  section 8(5)  of  the  Central Sales Tax Act is  a  provision  which enable  the State Government if it was of the view  that  it was necessary to do so in the public interest to  completely exempt  the inter-state sales from payment of tax or  reduce the  tax payable under the Central Act in respect of  inter- state  sales.   The section itself states  the  notification will  have  effect "Notwithstanding  anything  contained  in section  8".  Therefore when once a notification is made  it will have effect propio vigor and even any amendment of  the rate  applicable  to inter-state sale will  not  affect  the notification under section 8(5) of the Central Sales Tax Act as  such unless the notification also is amended along  with the amendment of the other provisions in the Section or  the amended  statute  in  law  the  effect  of  superseding  the notification  itself.   In the case dealt  with  in  Janatha Expeller Co. & Ors. (supra) the levy of additional sales tax could not affect the notification because the  notification,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 9  

though issued by the State Government, was made in  exercise of the powers under section 8(5) of the Central Act  enacted by  the Parliament, and the Kerala Additional Sales Tax  Act was  made by the State Legislature and that could  have  the effect  of superseding the notification.  We may also  point out  that the learned Judge also had  confined his  decision to the notification and its effect though he had dealt  with the  scope  of section 8(2-A) of the Central Sales  Tax  Act also in order to give better understanding of the provisions of section 8(5) of the Central Sales Tax Act.  We are unable to  see anything in this judgment to support the  contention of  the respondents-assessees that even in a case  which  is not covered by any notification under section 8(5) of                                                        149 the CST Act increase in the rate of tax under the local  act will  not  have any effect on the applicability  of  Section 8(2)(b)  and 8(2-A) of the CST Act.  Further, for  enhancing the  rate notified under section 8(5) of the  Central  Sales Tax  Act no reliance can be placed on section 8(2-A) of  the CST  Act.    However, while agreeing with the  view  of  the learned  single  Judge the Division Bench on appeal  in  the case  of  Assistant  Commissioner  (Assessment)  Sales   Tax (supra)  made  certain further observation which  in  a  way supported  the  contention of the  assessees.  That  passage reads as follows:          "We are also of the view, that even in cases  where          tax is exigible under section 8(2A) of the  Central          Sales  Tax  for the inter-State sales,  the  Kerala          Additional  Sales Tax Act, 1978 (Act 20  of  1978),          has no application.          As  stated  already,  in cases  where  the  tax  is          payable  under section 8(2A) of the  Central  Sales          Tax  Act,  what  is  crucial  or  relevant  is   to          ascertain,  the  appropriate sales tax law  of  the          State,  under which the tax is levied for the  sale          or  purchase  of  the goods or  the  commodity,  in          question.   Looked  at from the angle, we  have  no          doubt,  that the appropriate sales tax law  of  the          State,  of  which  tax is  levied,  is  the  Kerala          General Sales Tax Act, 1963.  The Kerala Additional          Sales Tax Act, 1978(Act 20 of 1978), does not  levy          sales  tax on the sale or purchase of the goods  or          commodity,   in   question.   We  hold   that   the          provisions of Act 20 of 1978 are inapplicable to  a          situation, where inter-State sales are to be  taxed          under section 8 or section 8(2A) or section 8(5) of          the Central Sales Tax Act.      In the first place these observations are in the nature of  obiter in view of the fact that the learned Judges  have accepted  the  interpretation placed by the  learned  single Judge  that  in respect of a case where a  notification  has been issued under Section 8(5) of the CST Act the  amendment to   the  State  Act  will  not  have  any  effect  on   the notification.   That should have been enough to  dispose  of the case but they have given an alternative reasoning  which in our view is not correct and is against the provisions  of Section  8(2-A)  of the CST Act itself. For the  purpose  of applicability  of Section 8(2-A) of the CST Act we  have  to look to the rate of tax applicable for the time being  under the local Act at the time when the CST Act was enacted.  Any amendment in the local Act ultimately will have a reflection in the assessment of the inter-state sales.  We have already discussed the scope of Section 8 (2-A) of the CST Act and in the light of those reasonings the passage extracted above in the  judgment of the Division Bench is contrary to  law  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 9  

could not be accepted.                                                        150      As  we  have stated already in all  the  appeals  under consideration there were no notifications under section 8(5) of the CST Act and simply the applicability of section  8(2- A)  of  the  CST Act alone is  involved.   The  appeals  are accordingly  allowed.  The orders of the High Court are  set aside  and  the respective assessment orders  are  restored. However, there will be no order as to costs. G.N.                                        Appeals allowed.                                                        151