Declared goods taxed below four per cent were deemed subjected to additional tax, securing entry tax exemption for coal purchases.

Coal purchased as declared goods for use as raw material in manufacture was taxed at less than 4 per cent under the sales tax law, so section 5-B(c) deemed it to have suffered additional tax. The Tribunal had incorrectly relied on section 5-B(b), which applies only where declared goods are taxed at 4 per cent and was therefore inapplicable. On that footing, the coal was treated as having been subjected to additional tax and qualified for exemption from entry tax under clause (iii) of the first proviso to section 3(1) of the Entry Tax Act.

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Issues: Whether coal imported as raw material, though taxed at 3.5 per cent under the sales tax law, was to be treated as having been subjected to additional tax so as to attract the exemption from entry tax under clause (iii) of the first proviso to section 3(1) of the Entry Tax Act.

Analysis: The coal was declared goods and had been purchased for use as raw material in manufacture. The tax actually paid on it was less than 4 per cent, being 3 per cent basic tax and 1/2 per cent additional tax under the concessional scheme. Clause (c) of section 5-B of the M.P. General Sales Tax Act deemed declared goods taxed at a rate less than 4 per cent to have been subjected to additional tax. The Tribunal had proceeded on clause (b) of section 5-B, but that clause applied only where declared goods were taxed at 4 per cent, which was not the case here.

Conclusion: The assessee was entitled to exemption from entry tax on the entry of coal, and the answer to the referred question was in favour of the assessee.

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