2013 (10) TMI 1019

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....ct read with Section 8 (4) has proceeded to hold that since the assessee had furnished a certificate in Form C, the rate of tax to be applied on the inter state sale of Iron & Steel manufactured from tax paid raw material would attract tax at the rate of 2 % only. Learned counsel for the department submits that there has been complete misreading of the proviso to Section 8 (1) at the hands of the Tribunal while recording the findings that since on goods manufactured (Iron & Steel) from tax paid raw material on sales within the State attract tax @ 2 %, the same rate would be applicable in respect of inter state sales made from the goods manufactured from tax paid raw material. According to learned counsel for the department the impact of ....

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....he State of U.P attracted tax @ 2 %. In view of notification dated 21.04.1995 issued by the Governor of State of U. P. in exercise of powers under Section 3 (a) (1) of U.P Trade Tax Act. The issue which is up for consideration is as to whether in view of the said notification the rate of tax on inter state sale of goods manufactured by the assessee would be 2 % in view of Section 8 (1) of the Central Sales Tax Act or would it be covered by the proviso to Section 8 (1) and, therefore, attract tax @ 4 %. It is not in dispute that the assessee had produced a certificate in Form C as required under Section 8 (4) and, therefore, the other conditions of Section 8 (1) are satisfied. For the purposes of appreciating the controversy, it is wor....

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....he lower rate in respect of said goods at par with the rate applicable to the sale or puchase of said goods inside appropriate State under the State tax law. To attract the said clause 8 (1) it is but necessary that there is a notification by the Central Government declaring that the rate of tax on turn over of a selling dealer would be 2 % during course of inter State trade covered by Section 8 (1) or the lower rate as applicable on the sale of the same goods within the State under the State law. So long as a notification under Section 8 (1) is not issued, the proviso to Section 8(1) would continue to hold the field. The proviso prescribes the rate of tax to be 4 % of the turn over.This follows from simple reading of the proviso quoted abo....