TaxTMI 
TaxTMI 
1994 (10) TMI 262
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....and Kashmir and others, seeking the review of this Court's judgment and order dated January 16, 1992, reported in [1992] 85 STC 432; [1992] 2 SCC 683 (Pine Chemicals Ltd. v. Assessing Authority). The matter arose under the Jammu and Kashmir General Sales Tax Act, 1962 and the Central Sales Tax Act, 1956. By the aforesaid judgment, this Court allowed the appeals preferred by the dealers setting aside the judgment of the Jammu and Kashmir High Court. The judgment under review dealt with and pronounced upon four submissions. It held: (1) Notwithstanding the fact that the Government Order No. 159-Ind. dated March 26, 1971, does not invoke or refer to section 5 of the Jammu and Kashmir General Sales Tax Act, and notwithstanding the defect, if any, in the form, it is and must be understood as an order granting exemption under and with reference to section 5 of the said Act. (2) That the said Government order is effective by itself. It did not require any other or further order to make it effective and enforceable. (3) S.R.O. No. 448 dated October 22, 1982, did not have the effect of superseding the aforesaid exemption notification. (4) The dealers-assessees are entitled to claim the....
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....planation which defines the expression "generally" occurring in the sub-section clarifies that a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State sales tax law if under such law (i) the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or (ii) the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. We may at this stage set out the relevant portion of Government Order No. 159, which provides for exemption. It reads: "Sanction is accorded to the grant of the following incentives and facilities to large and medium scale industries in the State of Jammu and Kashmir:............ (2) Grant of exemption from the State sales tax both on raw materials and finished products for a period of five years from the date the unit goes into production." By a subsequent Government order dated August 25, 1971, the clause (2) was substituted. The substituted clause (2) reads thus: "(2) Grant of exemption from the sales tax both on raw materials and finished products. The State sales tax paid by large and medium sca....
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....pecifically that such exemption must be a general exemption and not an exemption operative in specified circumstances or under specified conditions. Can it be said that the goods sold by the dealers in this case are exempt from tax generally under the State sales tax enactment? The answer can only be in the negative. Such goods are exempt from tax only when they are manufactured in a large or medium scale industrial unit within five years of its commencement of production and sold within the said period, i.e., in certain specified circumstances alone. The exemption is not a general one but a conditional one. The exemption under the Government Order No. 159 is not with reference to goods or a class or category of goods but with reference to the industrial unit producing them and their manufacture and sale within a particular period. For the purposes of the Government order, the nature, class or category of goods is irrelevant; it may be any goods. It is concerned only with the industrial unit producing them and the period within which they are manufactured and sold. Can it be said in such a case that it is an instance where the sale is of goods, the sale or purchase of which is unde....
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....ation or distribution of electrical energy. If any of these circumstances are not satisfied, it was pointed out, the sale of such goods was not exempt from tax. It was emphasised that "general exemption means that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances there is no exemption from tax generally". (Emphasis added). In our respectful opinion, the ratio of this decision clearly concluded the question arising in Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683, against the assessees inasmuch as it was not a case where goods were "totally exempt from tax". It was a case where the exemption operated or was attracted only if it was established that such goods were manufactured in a large or medium industrial unit within five years of its going into production and were sold within that period. As pointed out hereinbefore, the exemption was not with reference to goods but with reference to the unit manufacturing the goods. In International Cotton Corporation (P.) Ltd. v. Commercial Tax Officer, Hubli [1975] 35 ....
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....ame goods". It was further added: "thus the specified circumstances and the specified conditions referred to in the Explanation should be with reference to the local turnover of the same dealer who claims exemption under section 8(2-A) of the Central Sales Tax Act". In our respectful opinion, however, sub-section (2-A) speaks of sale or purchase of goods being exempt generally under the State sales tax enactment; it does not speak of exemption qua the dealer, much less qua the unit manufacturing such goods. The exemption notification issued by the Jammu and Kashmir Government granted the exemption qua the industrial unit manufacturing the goods and the period within which they are manufactured and sold and not qua the goods. In the judgment under review, it has been further observed that "the facts which the dealer has to prove to get the benefit of the Government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought to be exempted from payment of tax within the meaning of those provisions. The specified circumstances and the specified c....
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....at the view taken in the judgment under review is a view which could not have been possibly taken. Learned counsel pointed out that a large number of High Courts have taken the same view and hence, the error, if any, in the judgment under review is not an error apparent on the face of the record. With respect, we cannot agree. To us, the language employed in the sub-section looks quite clear and unambiguous. It does not admit of any other interpretation than the one placed by us. More important, it was already construed by a Bench of co-ordinate jurisdiction in Indian Aluminium [1976] 38 STC 108 (SC) earlier. Another Bench of four learned Judges had also understood the purport of the said sub-section in the same manner- vide International Cotton Corporation [1975] 35 STC 1 (SC). In the light of the said binding decisions, it was not open, with great respect, to the Bench deciding Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683 to place the interpretation it did on the sub-section. We may reiterate that we have not allowed the learned counsel for the review petitioners to question the correctness of the first three points decided in the judgment under review. We are told t....