Court grants relief to small-scale industry, quashes assessment order citing tax exemption.

The court held that the exemption from local sales tax under entry 68 of the Second Schedule to the Goa Sales Tax Act was general and applicable to Central sales tax under section 8(2A) of the Central Sales Tax Act. The petitioners, a registered small-scale industry, were granted relief, and the assessment order was quashed. The court allowed the petition and made the rule absolute in favor of the petitioners, rejecting the oral application for leave to appeal to the Supreme Court.

---

---

Issues Involved:
1. Interpretation of section 8(2A) of the Central Sales Tax Act, 1956.
2. Applicability of exemption from Central Sales Tax for a small-scale industry under the Goa Sales Tax Act.
3. Jurisdiction of the High Court to entertain the writ petition without exhausting alternate remedies.

Issue-wise Detailed Analysis:

1. Interpretation of section 8(2A) of the Central Sales Tax Act, 1956:

The case revolves around the interpretation of section 8(2A) of the Central Sales Tax Act, particularly after its amendment in 1973. The petitioners argued that the exemption from local sales tax granted under entry 68 of the Second Schedule to the Goa Sales Tax Act should also apply to Central sales tax for inter-State sales. The amended section 8(2A) states that if under the state sales tax law, the sale or purchase of goods is exempt from tax generally, the tax payable under the Central Sales Tax Act shall be nil or calculated at a lower rate. The explanation to section 8(2A) clarifies that an exemption is not considered general if it is granted only under specified circumstances or conditions or if the tax is levied at specified stages or otherwise than with reference to the turnover of the goods.

The court reviewed various decisions, including those from the Madhya Pradesh High Court, Allahabad High Court, and the Supreme Court, which dealt with the interpretation of section 8(2A) before its amendment. The court noted that the amended section 8(2A) did not change the concept of general exemption but only restructured the section. Therefore, the exemption granted under entry 68 of the Second Schedule to the Goa Sales Tax Act was considered general and not under specified circumstances or conditions.

2. Applicability of exemption from Central Sales Tax for a small-scale industry under the Goa Sales Tax Act:

The petitioners, a registered small-scale industry, claimed exemption from Central sales tax for inter-State sales based on the exemption from local sales tax under entry 68 of the Second Schedule to the Goa Sales Tax Act. The court noted that entry 68 provided total exemption from local sales tax for sales by registered small-scale industries for five years from the date of the first sale. The court held that this exemption was general and not subject to specified circumstances or conditions, thus qualifying for exemption under section 8(2A) of the Central Sales Tax Act.

The court rejected the Government Pleader's contention that the exemption was not general because it was restricted to sales by registered small-scale industries. The court emphasized that the absence of the word "dealer" in the amended section 8(2A) did not change the concept of general exemption. The court concluded that the exemption granted to the petitioners under entry 68 of the Second Schedule to the Goa Sales Tax Act was general and applicable to Central sales tax.

3. Jurisdiction of the High Court to entertain the writ petition without exhausting alternate remedies:

The respondents argued that the petitioners' writ petition was not tenable because they had not exhausted all available remedies under the Central Sales Tax Act. However, the court noted that the matter involved a question of interpretation of section 8(2A) of the Central Sales Tax Act and a question of jurisdiction. Therefore, the court held that it could entertain the petition without requiring the petitioners to exhaust alternate remedies.

Conclusion:

The court concluded that the exemption from local sales tax granted to the petitioners under entry 68 of the Second Schedule to the Goa Sales Tax Act was general and not subject to specified circumstances or conditions. Therefore, the petitioners were entitled to exemption from Central sales tax under section 8(2A) of the Central Sales Tax Act for inter-State sales. The court quashed the assessment order dated 28th December 1983 and granted relief to the petitioners. The petition was allowed, and the rule was made absolute in terms of the prayers (a) and (b)(i), (ii), and (iii) of the petition. The court rejected the oral application for leave to appeal to the Supreme Court.

---