TaxTMI 
TaxTMI 
2010 (8) TMI 860
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....ed the petitioner's objection that in terms of the exemption notification issued under section 9 of the Act, the reduced rate of tax should be charged. The revision preferred by the petitioner against this order was rejected by the revisional authority, by impugned order dated October 11, 2002. The learned counsel for the petitioner submitted that the charging section is section 9 and once by the notifications dated May 9, 1997 and May 14, 1997, the rate of tax was reduced then for the levy of tax under section 9B also the reduced rate of tax will be applicable. He submitted that the liability under section 9B is co-related to charging section 9 and the same rate of tax should be applied for the purpose of section 9B as applicable for the purpose of section 9. He further submitted that Schedule II relates to section 9 and there is no separate Schedule for section 9B, therefore, any reduction of rate of tax under section 9 will also apply for levy of tax under section 9B. The learned counsel appearing for the respondents supporting the impugned order submitted that no error has been committed by the tax authorities in not giving the benefit of reduced rate of tax si....
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....parcel of section 9, but is a separate section applicable to the separate class of dealers covered by section 9B. The State can provide different rate of tax for different class of dealers depending upon their turnover and the rate of tax on the sale of goods can vary with the turnover of the dealer and, therefore, it is well within the competence of the State to reduce the rate of tax applicable to the particular class of dealers without altering the rate of tax payable by another class of dealers. The above view is supported by the Division Bench of this court in the matter of Chhattisgarh Cement Dealers Association and M.P. Chemists and Druggists Association v. State of M.P. reported in [2002] 2 Tax Law Decision 25. The Division Bench, while upholding the constitutional validity of section 9B of the Act, has also considered the question of discrimination, which may arise for the reason of not extending the benefit of tax exemption to the dealers covered by section 9B and has held that if there is classification between two categories of traders such classification in relation to the exemption notification would also be valid. The Division Bench of this court has held that:....
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....ption (1) (2) (3) 1. Loose tea Explanation. - 'loose tea' means in bulk in packages of 20 kilograms and above, i.e., not in smaller packets within the package of 20 kilograms or more Partly so as to reduce the rate of tax under section 9 to four per cent." By the subsequent notification dated May 14, 1997, issued under section 17 of the Act, the rate of tax on tea under section 9 was reduced to eight per cent. The relevant extract of notification dated May 14, 1997, is reproduced below: "21 Notification No. A-3-21-97-ST-V(24), dated 14th May, 1997 In exercise of the powers conferred by section 17 of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995), the State Government hereby exempts the goods/class of goods specified in column (2) of the Schedule below from payment of tax under the said Adhiniyam, for the period from 1st April, 1997 to 31st March, 2000, to the extent specified in column (3) of the said Schedule. SCHEDULE S. No. Goods/Class of goods Extent of exemption (1) (2) (3) (Sl. No. 1 and 2 omitted with effect from May 14, 1997) 3. 4. Tea Partly so as to....
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.... is provided by section 4A. While providing for exemption, the Legislature has hedged it with certain conditions. It is not open to the court to ignore those conditions and extend the exemption. . .'" The Supreme Court in the matter of State of Jharkhand v. Tata Cummins Ltd. reported in [2006] 145 STC 340; [2006] 4 SCC 57 held that (page 347 in 145 STC): "16. Before analysing the above policy read with the notifications, it is important to bear in mind the connotation of the word 'tax'. A tax is a payment for raising general revenue. It is a burden. It is based on the principle of ability or capacity to pay. It is a manifestation of the taxing power of the State. An exemption from payment of tax under an enactment is an exemption from the tax liability. Therefore, every such exemption notification has to be read strictly. However, when an assessee is promised with a tax exemption for setting up an industry in the backward area as a term of the industrial policy, we have to read the implementing notifications in the context of the industrial policy. In such a case, the exemption notifications have to be read liberally keeping in mind the objects envisaged by the in....