2018 (12) TMI 1572

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....05.09.2008 respectively. The petitioner had availed the benefit of the Notification No.II (1)/CTE/38/76 dated 20.12.1975. Text of the notification read as under: "In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Central Act.74 of 1956), the Governor of Tamil Nadu having been satisfied that it is necessary to do so in public interest hereby directs that in respect of scientific equipments and instruments (hereinafter referred to as "the said goods") the tax payable under the said Act by any dealer having his place of business in the State of Tamil Nadu, in respect of the sale by him from such place of business of the said goods in the course of inter-state trade and commerce to an education institution for use in the teaching of science, or to a hospital for its use, or to a laboratory or institution which carries on any research work for the promotion of a literary, scientific, artistic or educational object and which is not run with a motive of making profit, shall be calculated at give percent of the sale price of the goods so sold, if--- (c) Such sale does not fall within sub-section (1) of the said section....

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....ed in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in subsection (1) or subsection (2) as may be mentioned in the notification.] (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce 6 [to a registered dealer or the Government] by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in subsection (1) or sub-section (2) as may be mentioned in the notification.] 5.Thus, sale should be made "to a registered dealer or the government" to be eligible for the exemption. However, there was no corresponding amendment to Notification No.II(1)CTRE/38/76 dated 20.12.1975, under which assessment was claimed and al....

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....ent of 'C' form specified under Section 8(4) of the CST Act. In other words, as per the notes on clauses, Section 8(5) was amended by Finance Act with a view to withdraw the powers of the State Governments to waive the requirement of form 'C' specified under Section 8(4), so that compliance of Section 8(4) becomes mandatory in respect of sales of goods to the registered dealer or the Government covered under Section 8(1) aswp6475-09 except when exempted. 13.In State of Maharashtra suitable circulars had been issued clarifying the position as is evident from the reading of the said judgment. In para 53 and 54, the Hon'ble Division Bench of the Court further observed as under: "Therefore, when Section 8(5) as amended by Finance Act 2002 specifically refers to the power of the State Governments to grant total / partial exemption from the tax payable under Section 8(1) or 8(2), it is not possible to accept the contention of the Revenue that after the 2002 amendment, the power of the State Government under Section 8(5) to grant total / partial 37 of 43 aswp6475-09 exemption is restricted only in respect of the transactions covered under Section 8(1). ....

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....able under Section 8(2). The very fact that the legislature even after the 2002 amendment has retained in Section 8(5), the words that relate to the power of the State Governments to grant total / partial exemption from tax payable under Section 8(2), clearly show that the said amendment was not intended to affect the power of the State Governments to grant total / partial exemption from the tax payable in respect of the transactions covered under Section 8(2)." 14.Ultimately, in para 59 the Court held as under: "59. For all the aforesaid reasons, we reject the self destructive argument of the Revenue that Section 8(5) of the CST Act as amended by Finance Act 2002, restricts the power of the State Governments to grant total / partial exemption in respect of inter-State sales covered under Section 8(1) only. We further hold that even after the amendment of Section 8(5) by Finance Act 2002, the State Governments in public interest may subject to fulfillment of the requirements of Section 8(4)applicable to transactions covered under Section 8(1), grant total / partial exemption from tax payable 42 of 43 aswp6475-09 on inter-State sales covered under Section 8(1) a....