Concessional Central Sales Tax rate for hides and skins upheld where State exemption notification was operative.

Section 8 of the Central Sales Tax Act allows the State Government to grant concessional tax rates or exemptions by notification in the public interest. On the facts, a notification fixed a 2 per cent rate for inter-State sales of tanned hides and skins, and a later State sales tax notification exempted tanned and untanned hides and skins from State tax for the relevant assessment year. Because that exemption was operative, non-payment under the State Act could not defeat the concessional Central Sales Tax rate. The revisional authority's contrary condition was unsustainable, and the levy at 4 per cent was held incorrect.

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Issues: Whether, for the assessment year 1984-85, the turnover of tanned hides and skins sold in the course of inter-State trade was taxable at 2 per cent or 4 per cent under the Central Sales Tax Act in the light of the State Government orders granting concessional rate and exemption.

Analysis: Section 8 of the Central Sales Tax Act, 1956 prescribes the normal rate of tax, while sub-section (5) permits the State Government to reduce or exempt tax by notification in the public interest. The State Government had issued a notification granting a 2 per cent rate on sales of tanned hides and skins, and a later notification under the State sales tax law exempted tanned and untanned hides and skins from tax under the State Act. For the relevant assessment year, the exemption notification was operative, so non-payment under the State Act could not be treated as defeating the concessional rate under the Central Act. The condition adopted by the revisional authority was therefore unsustainable.

Conclusion: The levy at 4 per cent was incorrect and the assessee was entitled to the 2 per cent rate.

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