2009 (4) TMI 889 - HC - VAT and Sales Tax

Court extends exemption benefit under section 5(3) as notification not canceled. Exemption must continue unless canceled.

The High Court held that the benefit of exemption under section 5(3) of the Act should be extended to the appellant as the notification was not canceled ... Incorrect exemption claimed under section 5(3) - Whether the action of the Tribunal in granting the relief of exemption of additional surcharge is correct or not? Held that:- As the notification was not cancelled, it is very clear that the Government did not want to cancel the benefit. The other contention of the Government Pleader is that the notification is qualified with reference to the city of Madras and other peripheral areas, and due to be cancelled when a particular provision has been taken away from the statute. We are not able to approve the argument of the learned Government Pleader. Even in the reintroduced section, there is no much difference when compared to the earlier section. De hors the deletion and re-introduction of the section, unless the notification issued by the Government for which the Government has every power is cancelled as per law, the benefit of the exemption granted by that notification has to be extended to the assessee. No illegality or irregularity in the order of the Tribunal. Issues:1. Exemption claimed under section 5(3) of the Act2. Levy of additional surcharge on declared goods3. Correctness of the Tribunal's decision in granting relief of exemption of additional surchargeAnalysis:1. The appellant, a dealer in hides and skins, declared a total and taxable turnover for the assessment year 1993-94. The assessing officer found discrepancies in the exemption claimed under section 5(3) of the Act and disallowed the claim for additional surcharge on declared goods. The Appellate Assistant Commissioner upheld the assessing officer's decision, stating that the exemption notification was not available during the relevant time. The Tribunal, considering a similar case in favor of the assessee, allowed the appeal. The High Court held that unless a notification is canceled by the Government, it remains in force, and the benefit of the exemption must be given to the assessee. As the notification was not canceled, the benefit should be extended to the appellant.2. The Government Pleader argued that the charging provision of section 3A of the Act was deleted and reintroduced, leading to the automatic cancellation of any notification issued with reference to the deleted provision. However, the notification granting exemption from additional surcharge was not canceled by the Government. The High Court emphasized that unless the Government cancels a notification, the benefit of the exemption must be given to the assessee. The Court rejected the argument that the notification was qualified with reference to a specific area, stating that the benefit of the exemption should be extended unless canceled by the Government through a legal process.3. The only issue raised in this revision was the correctness of the Tribunal's decision in granting relief of exemption of additional surcharge. The High Court found no illegality or irregularity in the Tribunal's order and dismissed the revision, affirming that the benefit of the exemption notification should be extended to the assessee unless canceled by the Government. The Court concluded that the Tribunal's decision was in accordance with the law, and no costs were awarded in this matter.