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PETITIONER: M/S J.K. SYNTHETICS LTD. ANR.

       Vs.

RESPONDENT: COMMERCIAL TAX OFFICER & ANR.

DATE OF JUDGMENT:       28/01/1997

BENCH: CJI, S.P. BHARUCHA, K. VENKATASWAMI

ACT:

HEADNOTE:

JUDGMENT:                             WITH         R.P. (C) NO. 1674/93 IN SLP (C) NO. 8995/92,            C.A. Nos. 3381/93, 3382/93, 3179-52/85                       J U D G M E N T BHARUCHA. J. C.A. No. 3381/93      The impugned  judgment (reported  in 87 S.T.C. 534) was delivered by  a learned  single Judge  of the  High Court of Rajasthan. It rejected in writ petition filed by the present appellant against an order of the Board of Revenue.      The Assessment  Years in  question are 1965-66, 1966-67 and 1967-68.  The assessee  (respondent)  manufactures  tyre cord fabric.  That tyre  cord fabric  was, at  the  relevant time, covered by term ‘textile’ is not in dispute.      Three notifications were issued by the State Government in exercise  of powers  conferred by  Section  8(5)  of  the Central Sales  Tax Act,  1956. They are dated 14th December, 1957, 12th  August, 1980,  and 2nd  January, 1981,  and they read thus: 1. "F. 5(48) E&T/57-II, dated December 14, 1957:      In exercise of the powers conferred      by subsection  (5) of  section 8 of      the Central  Sales  Tax  Act,  1956      (Central Act  No. 74  of 1956), the      State  Government  being  satisfied      that it  is necessary  so to  do in      the public  interest, directs  that      no tax  under the said Act shall be      payable, on and from the fourteenth      day  of   December,  1957,  by  any      dealer having his place of business      in  the   State  of   Rajasthan  in      respect of  the sale  by him  to  a      registered  dealer  from  any  such      place of business, of the following      goods, in the course of inter-State      trade and commerce, namely:      (i) sugar,      (ii) tobacco and its products, and      (iii) all textiles, whether cotton,

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    woollen or silken, including rayon,      art-silk or nylon, but exclusive of      pure silken  cloth of all varieties      (howsoever manufacture)." 2. "F.4(46)FD/Gr. IV/80-7 dated August 12, 1980 :      In exercise of the powers conferred      by sub-section  (5) of section 8 of      the Central  Sales Tax  Act,  1956,      the State  Government being  of the      opinion that it is necessary in the      public interest  so to  do,  hereby      directs that  the tax in respect of      sales made  in the course of inter-      State  trade  or  commerce  by  any      dealer having his place of business      in the State from any such place of      business of  tyre cord  fabrics  or      warp sheets shall be payable and be      calculated at 4 per cent.      This shall have immediate effect." 3.   "F.17(71)FD/Gr. IV/71-I dated January 2, 1981:      In exercise of the powers conferred      by sub-section  (5) of section 8 of      the Central  Sales Tax  Act,  1956,      the    State    government    being      satisfied that  it is  necessary so      to do in the public interest hereby      directs that  all the notifications      issued under  the said  sub-section      in so  far as  they relate  to  the      sales made  in the course of inter-      State trade,  or  commerce  by  any      dealer having his place of business      in the  State, from  such place  of      business,  of   tyre  cord  fabrics      and/or  warp   sheets  shall  stand      superseded."      The relevant  notifications that  were  issued  by  the State Government  under the powers conferred by Section 4(2) of the  Rajasthan  Sales  Tax  Act,  1954,  are  dated  14th December, 1957,  1st July, 1958 and 20th February, 1968, and they read thus: 1. "F.5(48)E&T/57/I dated December 14, 1957:      In exercise of the powers conferred      by sub-section  (2) of section 4 of      the Rajasthan  Sales Tax Act, 1954,      (Rajasthan Act  XXIX of  1954), the      State  Government   being  of   the      opinion that it is necessary in the      public  interest  so  to  do,  does      hereby exempt the sale of.      (i) sugar,      (ii) tobacco and its products, and      (iii) all textiles, whether cotton,      woollen or silken, including rayon,      art-silk or  nylon but exclusive of      pure silken  cloth of all varieties      (howsoever manufactured)      from payment  of  the  tax  payable      under the  said Act on the from the      fourteenth day  of December,  1957,      on   the    following   conditions,      namely:      (a)  that   every  dealer   in  the      aforesaid  goods  shall  not  later

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    than   the    2nd   January,   1958      correctly  declare   in  the   form      appended hereto  all goods  of  the      aforesaid  classes   held  by  him,      whether in  stock  or  in  transit,      upon the  close of  business on the      13th of  December, 1957, separately      in respect of :-      (i) the goods purchased by him from      dealers registered  under the  said      Act, and      (ii) the goods otherwise purchased,      whether from  outside or within the      State of Rajasthan, and      (b) that every such dealer shall on      or before  the 10th  July, 1958 pay      to   the    appropriate   assessing      authority under  the said  Act,  in      respect  of   the  goods   of   the      aforesaid  classes  declared  under      clause (a), either      (i) an  amount in the case of sugar      and  tobacco,   calculated  at  the      existing rate  of tax payable under      the said  Act on the total purchase      price thereof  increased by  way of      profit   by    3%   and    6   1/4%      respectively and  in  the  case  of      textiles  eight  per  cent  of  the      amount calculated  at the  existing      rate of  tax payable under the said      Act on  the  total  purchase  price      thereof.      (ii) an  amount equal  to  the  sum      paid by  him as  tax under the said      Act for the quarter of the previous      year corresponding  to the  quarter      of the  current year  in which  the      14th day of December, 1957, falls;      Provided that  the amount  referred      to   in    clause   (b)   of   this      notification shall  not be  payable      in respect of stocks declared under      clause   (a)    thereof,   if   the      Additional Duties  of Excise (Goods      of Special  Importance) Act,  1957,      (No. 58  of 1957)  of  the  Central      Legislature    applies     thereto,      whether by  virtue of  the said Act      being passed  by Parliament  or  by      virtue of  the  provisions  of  the      Provisional  Collection   of  Taxes      Act,   1931,    of   the    Central      Legislature:      Provided further  that upon payment      of the  amount indicated  in clause      (b) -      (i) a  dealer in textiles mentioned      above shall be eligible to a rebate      of 15%, and      (ii) a  dealer in  tobacco and  its      products or  sugar shall,  if  such      payment is  made in full within one      month of  the 13th  December, 1957,      be eligible to a rebate of 5%:

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    Provided    also    that    nothing      contained in conditions (a) and (b)      above  shall   be   applicable   to      handloom textiles:      Provided further  that  the  option      contained  in  sub-clause  (ii)  of      clause  (b)   above  shall  not  be      available to  the  dealers  in  the      aforesaid goods in the area of Abu,      Ajmer and Sunej:      Provided further  that if  a dealer      is unable  to furnish  by  the  2nd      January,  1958,  a  declaration  as      aforesaid  in   the  Form   already      prescribed, he  may submit  by  the      2nd January,  1958,  a  declaration      stating according  to his books the      values  and  the  quantity  of  the      stock   in   hand   on   the   said      fourteenth day  of December,  1957,      separately  in   respect   of   the      articles liable  to different rates      of sales  tax but  he shall furnish      further  information  as  and  when      required of  him by the appropriate      assessing authority.      The  amount   payable   under   the      aforesaid notification  by a dealer      may be paid upto 31st March, 1961:      Provided   that    the    assessing      authority, after such enquiry as it      may deem fit, is satisfied that the      amount deposited or to be deposited      is based on a correct declaration:      Provided  further  that  no  rebate      admissible  under   the   aforesaid      notification (as amended upto date)      shall be allowed to such a dealer.      Extract from  Press Note (1) In the      case of dealers who fail to deposit      the requisite  amount by  the  30th      June, 1958, the exemption under the      aforesaid notification would not be      available and  all  sales  made  by      them upto  and including 30th June,      1958 would  be subject to sales tax      at the  rates in force from time to      time  irrespective   of  the   fact      whether  the  sales  are  of  goods      which   have    been   subject   to      additional duty  of excise  imposed      on 13th December, 1957, or not.      (2) Dealers thus exempted would not      be liable  to  pay  tax  on  fents,      rags,  dyed   and   printed   cloth      including tyed and dyed cloth. 2.   "F.5(48)E&T/57 dated July 1, 1958:      In exercise of the powers conferred      by sub-section  (2) of section 4 of      the Rajasthan  Sales Tax Act, 1954,      (Rajasthan Act  XXIX of  1954)  the      State  Government   being  of   the      opinion that it is necessary in the      public  interest  so  to  do,  does      hereby unconditionally  exempt from

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    the 1st  July, 1958,  from tax, the      sale of -      (i) sugar  including refined sugar,      khandsari  and  palmyra  sugar  but      excluding all  preparations thereof      such  as   sweets,   sugar   candy,      confectionery, etc.;      (ii)  all   varieties  of   tobacco      manufactured or unmanufactured;      (iii)  all  varieties  of  textiles      (other than  pure silk  cloth) made      wholly or  partly of cotton, rayon,      nylon,  wool   or  artificial  silk      including  handkerchiefs,   towels,      napkins,  dusters,  cotoon  velvets      and  velveteen,  hosiery  cloth  in      lengths  excluding  finished  items      thereof, tapes, niwars and laces." 3. "F.5(96)FD(CT)/67-I dated February 20, 1968:      In exercise of the powers conferred      by sub-section  (2) of Section 4 of      the Rajasthan  Sales Tax Act, 1954,      the Government  of Rajasthan  being      of the opinion that it is expedient      in the  public interest  to do  so,      hereby   rescinds   the   following      notification with immediate effect:      1.  Excise  &  Taxation  Department      Notification   No.   F.5(48)E&T/57,      dated 1st July, 1958.      2.  Excise  &  Taxation  Department      Notification  No.   F.5(139)E&T/57,      dated the 11th August, 1959.      3.  Finance   (Revenue  &  Economic      Affairs)   Department   (Commercial      Taxes  Section)   Notification  No.      F5(54)  FD(RT)/64  dated  the  23rd      February, 1965.      The provisions  of Sections  8(1), (2A)  and (5) of the Central Sales Tax Act read thus:      "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 to the Government any      goods; or      (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 per      cent of his turnover.      (2-A)   Notwithstanding    anything      contained in  sub-section (1-A)  of      Section 5  or in 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

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    of the  appropriate  State,  exempt      from tax  generally or  subject  to      tax generally  at a  rate which  is      lower than  four per  cent  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  purpose  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.      (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  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 sales shall be      calculated at such lower rates than      those specified  in sub-section (1)      or   sub-section   (2)   as   maybe      mentioned in the notification;      (b) that in respect of all sales of      goods or  sales of  such classes of      goods as  maybe  specified  in  the      notification, which  are  made,  in      the course  of inter-State trade or      commerce, by  any dealer having his      place of  business in  the State or      by any class of such dealers as may      be specified in the notification to      any person  or  to  such  class  of      persons as  maybe 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."      The provisions of Sections 3, 3A and 4 of the Rajasthan Sales Tax Act read thus:

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    "3. Incidence  of  taxation  0  (1)      Subject to  the provisions  of this      Act every  dealer whose turnover in      the previous  year  in  respect  of      sales   or    supplies   of   goods      exceeds:-      (a) in  the case  of a  dealer  who      imports goods,  or manufactures any      goods  other   than   cooked   food      excluding   bakery    products    -      Rs.50,000/-,      (b) in  the case  of a  dealer  not      falling   in    clause   (a)    Rs.      1,00,000/-,      shall be  liable to  pay tax  under      this Action his taxable turnover if      his taxable  turnover  exceeds  Rs.      10,000/- in the previous year;      Provided that  a dealer  who ceases      to be liable to pay tax as a result      of  any   amendment  in  this  sub-      section, shall be liable to pay tax      in respect  of any  goods purchased      by him  at a  concessional rate  of      tax or  without paying  any tax  on      the  strength  of  any  declaration      furnished by  him as  a  registered      dealer on  the  purchase  price  of      such  goods   at  the   full   rate      applicable  to  the  sale  of  such      goods after  adjusting the  tax  if      already  paid  by  him  in  respect      thereof.      Explanation:- For  the  purpose  of      limits specified  in clause  (a) or      (b) the  turnover shall include the      aggregate  amount   for  which  all      goods   are   sold   or   supplied,      irrespective of  the  fact  whether      any of  such goods  are imported or      manufactured or  otherwise obtained      by the  dealer concerned or whether      or  not   they  are  exempted  from      payment of tax; and      (2) A  dealer who  is not liable to      pay tax  under sub-section  (1)  or      who had no business in the previous      year, shall  be liable  to pay  tax      under this Act with effect from the      date when  his sales for the period      from the  first day of April are of      such an amount as would render, the      proportionate sales upto 31st March      liable to  tax  according  to  sub-      clauses (a)  or (b)  of sub-section      (1).      (3) (i) A casual trader, or      (ii)  any  other  dealer  in  goods      (except   cereals    and    pulses)      notified for  the purpose of Clause      (ccc) of section 2.      Who is  not liable to pay tax under      sub-section (1)  shall nevertheless      be liable  to pay  tax under and in      accordance with  the provisions  of

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    this  Act   and  the   rules   made      thereunder,  whatever   maybe   the      amount of extent of his turnover in      respect of  the sales of goods made      by him within the State.      3A. Liability of dealers registered      under Central  Act 74 of 1956.- 91)      A  dealer   registered  under   the      Central   Sales   Tax   Act,   1956      (Central Act 74 of 1956) who is not      liable to  pay tax  under section 3      of this  Act, shall nevertheless be      liable  pay   tax  under   and   in      accordance with  the provisions  of      this  Act   and  the   rules   made      thereunder,  whatever  may  be  the      amount or  extent of  his turnover,      in respect  of sales  of goods made      by him within the State on or after      the commencement  of the  Rajasthan      Sales Tax  (Second Amendment)  Act,      1958.      (2) A  dealer who  is liable to pay      tax under  sub-section (1) shall be      deemed to  be a  registered  dealer      for all purpose of this Act and the      rules made thereunder.      4. Act  not  to  apply  to  certain      sales - (1) No tax shall be payable      under this  Act on sale or purchase      of any of the exempted goods if the      conditions specified in column 3 of      the Schedule are satisfied.      (2) Where  the State  Government is      of opinion  that it is necessary or      expedient in the public interest so      to do, the State Government may, by      notification in the Official in the      Official Gazette,  exempt,  whether      prospectively  or   retrospectively      from tax  the sale  or purchase  of      any goods  or any a person or class      of person on such conditions and on      payment  of  such  fee  as  may  be      specified in the notification.      (3)   The   Excise   and   Taxation      Department notification No.F.5(139)      E.&T./57, dated  the  11th  day  of      August,    1959,    published    in      Rajasthan  Rajpatra,   Part   IV-C,      dated the 15th October, 1959 issued      under  sub-section   (2)  shall  be      deemed to  have ben  rescinded with      effect on  and from the 11th day of      August, 1959,  and  notwithstanding      such rescission,  sale of old gunny      bags during  the period  commencing      on the 11th day of August, 1959 and      ending on the 20th day of February,      1968 shall  be deemed  to have been      exempted from payment to tax."      Entry 18 of the Schedule to the Rajasthan Sales Tax, as it read at the relevant time, was this :      "All  cotton   fabrics  rayons   or      artificial  silk   fabrics  woollen

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    fabrics,  sugar   and  tobacco   as      defined in the Additional Duties of      Excise    (Goods     of     Special      Importance) Act,  1957 (Central Act      58 of 1957)."      The contention  on behalf  of the appellant is that the notifications dated  14th December, 1957, were superseded by the notification  dated 1st  July, 1958,  issued  under  the provisions of the State Act and, in any case, in 1964 by the insertion of  Entry 18 in the Schedule to the State Act. The notification dated  1st July, 1958, under the State Act gave unconditional exemption  to textiles.  thereby Section  8 of the Central  Act was  attracted. It  covered the  field  and implicitly rescinded  the notification  dated 14th December, 1957, issued under Section 8(5) of the Central Act which had given such  exemption. Entry  18, inserted  in 1964, for the same reason  also covered  the field.  The field having been covered, the  said notification  dated 14th  December, 1957, stood rescinded by necessary implication.      The contention  must be  rejected having  regard to the terms of the three aforementioned notifications issued under the provisions  of the  Central Act.  The notification dated 2nd January,  1981, stated  that the State Government, being satisfied that  it was  in the  public interest  so  to  do, directed that  "all the  notifications" issued under Section 8(5) in  respect of  sales of  tyre cord  fabric made in the course of inter-State trade or commerce by any dealer having his place  of business  in the  State  from  such  place  of business should  stand superseded. It will be noted that the phrase used  is "all  the notifications".  the phrase, using the plural,  covers not  only the  notification  dated  12th August, 1980,  but also  the only  other  notification  that meets the  requirements, being  the said  notification dated 14th December,  1957. The State Government, therefore, acted upon  the  basis  that  the  said  notification  dated  14th December, 1957,  issued under  Section 8(5)  of the  Central Act, was  in force  on 2nd January, 1981. The appellant, its officer, cannot  be heard  to contend  that the terms of the notification dated  2nd January,  1981, were  the result  of non-application of mind and that the said notification dated 14th December,  1957, had  stood  impliedly  rescinded  long before 2nd January, 1981.      On this  short ground the appeal must fail. It becomes, therefore, unnecessary  to analyse  the  provisions  of  the Central and  State Acts  under which  the notifications were issued  for   the  purpose   of  examining  the  appellants’ aforestated contention.      The appeal is dismissed. No order as to costs. C.A. No.  3179-82/85, C.A.  No. 3382/93  and Review Petition No. 1674/93 in SLP(C) No. 8995/82                          & Review Petition      These appeals  are dismissed  in the light of the above judgment and order. No order as to costs. C.A. No. 1757/82      In this  matter the  assessee  is  in  appeal.  It  had challenged  in   a  writ  petition  before  the  High  Court provisional assessments  made on  the  basis  that  we  have rejected above.  During the  pendency of  the writ petition, the provisional  assessments were  finalised.  The  assessee applied for  an amendment  of the writ petition to challenge the final  assessment orders.  The amendment was refused. We find no  valid ground  for such  rejection. However,  it  is fairly pointed  out that  in  respect  of  one  of  the  two assessment years  in question,  the assessee  has filed  the statutory appeal  available to  it. We  think  that  it  is,

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therefore, proper  that even for the remaining year, namely, Assessment Year  1974-75,  the  assessee  should  file  such statutory appeal  and we  direct that  the bar of limitation shall not  be raised  or considered in such appeal; in other words, the appeal shall be decided on merits if filed within 12 weeks  from today.  Order on  the appeal  accordingly. No order as to costs.