2013 (7) TMI 902 - HC - VAT and Sales Tax

Court ruling on taxation of 'dried singhada' & 'green singhada' under Vanijyik Kar Adhiniyam, 1994

Bal Govind Awasty Versus State of Madhya Pradesh and others

The court analyzed the interpretation of Schedule I and Schedule II of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 regarding the taxation of 'dried ... Tax shall be levied on the taxable turnover relating to goods specified in Schedule II. whether the State Government could have issued the notification excluding ‘dried singhada while green singhada is exempt. Issues:Interpretation of Schedule I and Schedule II of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 regarding the taxation of 'dried singhada' and 'green singhada'.Analysis:The case involved a controversy regarding the liability of 'dried singhada' for commercial tax under the Madhya Pradesh Commercial Tax Act, while 'green singhada' was exempted. The petitioner argued that 'singhada' was listed in both Schedule I and Schedule II, with the Commissioner defining 'singhada' in Schedule II as 'dried singhada' used for making flour. Referring to a previous Division Bench decision, the court analyzed Section 15 of the Act concerning tax-free goods and the power of the State Government to amend schedules. The court highlighted that the State Government could not exclude items listed in Schedule I as tax-free goods but could only include further goods or relax conditions. The court cited a case precedent to emphasize that the scope of Schedule I, being a creation of the Legislature, could not be curtailed by the State Government through notifications. The court concluded that the notification excluding 'dried singhada' exceeded statutory limits as the Legislature's intention was to include both fresh and dried 'singhada' unless specifically excluded, as seen in the case of dried ginger.The court further discussed the limitations on the State Government's power to amend Schedule I and the significance of legislative intent in interpreting tax exemptions. The court emphasized that Schedule I was part of the original statute created by the Legislature, and any attempts to curtail its scope through notifications were impermissible. The court held that as long as Section 15(2) remained in force and Schedule I was a creation of the Legislature, its effect could not be nullified by notifications. Therefore, the court concurred with the view taken by the learned single judge and dismissed the appeals, in line with the decision in the previous case. The petition was allowed based on the Division Bench's order in the earlier case, and the matter was finally disposed of with no order as to costs.