TaxTMI 
TaxTMI 
2019 (2) TMI 1013
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.... arise from a common order dated 12.03.2018 passed by the learned Single Judge allowing the writ applications and holding that the notification issued by the State Government in exercise of its powers under Section 15-B of the Chhattisgarh Value Added Tax Act, 2005 (for short 'the VAT Act') where tax on minor forest produce has been reduced to 5% will also be applicable to Tendu leaves by treating the Tendu leaves also as a minor forest produce despite the Tendu leaves having been separately shown as a taxable item in Part III of Schedule II. 2. The private Respondents, who were the Petitioners before the writ court, had entered into purchase agreements with the Chhattisgarh State Minor Forest Produce (Trading and Development) Cooperative Federation Limited (for short 'the Federation') authorising the Respondents to purchase Tendu leaves from them. As per the purchase agreement, the purchasers had to pay VAT under the VAT Act at the rate prescribed by the State Government from time to time. 3. The VAT Act lays down obligations on every dealer who is liable to pay tax under the said Act in respect of sales or supplies of goods effected by him in the State of Ch....
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.... rate of tax specified in Schedule II shall be the rate at which tax would have been levied on the sale of such goods within the State on the date of such purchase. (2) No tax under this section shall be levied in respect of any year on - (a) a dealer whose turnover in a year does not exceed the limit prescribed under sub-section (1) of section 4; (b) any other dealer who has no turnover, if his aggregate of purchase prices of all the goods does not exceed such amount as may be prescribed. (3) Every dealer who has no turnover and is liable to pay tax under sub-section (1) shall, for the purpose of Sections 19,21,22,25,26 and 41 be deemed to be a registered dealer." 6. The other Sections which also have some bearing are Sections 15, 15-A and 15-B. They are reproduced for ready reference as under: "15. Tax free goods. - (1) No tax shall be payable on the sale or purchase of goods specified in Schedule-I, subject to the conditions and exceptions, if any, set out in the corresponding entry in the third column thereof. (2) The State Government may in respect of any goods, by notification amend Schedule-I so as to include therein a....
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....r class of goods in whole or in part, from the payment of tax under the repealed Act; or (ii) any dealer or class of dealers from any provision of the repealed Act or the provision of any rule made there under, for any period before the commencement of this Act and for that purpose it shall and shall always be deemed that the provision of Section 17 of the repealed Act have been revived for the purpose of such exemption." 7. From the scheme of VAT Act, the goods shown in Schedule I are treated as tax free goods which has been envisaged under Section 15 of the VAT Act. Schedule II contains the lists of goods on which rate of tax is decided and notified in terms of Section 8. There are three parts to Schedule II. Part I contains a list of goods or items which carry least incidence of tax. Part II contains the list of goods which broadly has incidence of 5% tax and Part III contains certain goods or items which have the highest incidence of tax i.e. at the rate of 25%. The items include the products like diesel, petrol, aviation turbine fuel, natural gas, kerosene sold through PDS and Tendu leaves. By the very look of the goods which have been placed in Part III o....
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....e Forest Policy which defined minor forest produce, which included Tendu leaves and in terms of Section 2(I) of the Forest Rights Act, 2006, minor forest produces included non-timber forest produce including Tendu leaves. The learned Single Judge going by the logic that when generic term has been used by the Legislature, then it has to be construed as if the Legislature meant all those items which fall under the said generic term, therefore, Tendu leaves being minor forest produce should also be read into that exemption notification and therefore, allowed the writ applications with a direction that the Tendu leaves will carry only 5% tax. This batch of writ appeals has arisen against the impugned decision of the learned Single Judge dated 12.03.2018, both on behalf of the State as well as the Federation. 14. The stand of the Appellants is that the learned Single Judge has committed error of law, if not of fact by dragging the Tendu leaves in the category of minor forest produce and allow the benefit of concessional rate of tax of 5% even though Tendu leaves stands as a taxable item in Schedule II Part III at serial No. 5 untouched and carrying a rate of tax of 25%. 15. The le....
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....ively, it can be said that where a Statute contains both a General Provision as well as specific provision, the later must prevail. 42. This Court has noticed the application of the said rule in construction of taxing statutes along with the proposition that the provisions must be given the most beneficial interpretation in CIT v. Shahzada Nand & Sons, (1966) 3 SCR 379 "8. ...The classic statement of Rowlatt, J., in Cape Brandy Syndicate v. IRC, (1921) 1 KB 64, 71 still holds the field. It reads: ".....in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." To this may be added a rider: in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used the....
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....aling with the exemption notification it has to be strict interpretation and in case of doubt, benefit has to be given to the Revenue. Appeals of L&T, therefore, fails and are dismissed." 19. Reliance has also been placed on a very recent Constitution Bench decision of the Hon'ble Apex Court, which is the case of Commissioner of Customs (Import) Mumbai v. Dilip Kumar & Company & Others, (2018) 9 SCC 1. The Hon'ble Apex Court while dealing with the issue of exemption notification, having taken note of various decisions dealt with on such issue, the Constitution Bench sums up the principle in the following words: "66. To sum up, we answer the reference holding as under: 66.1 Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. 66.2 When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue. 66.3 The ratio in Sun Export ca....
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....y seems to be in error by drawing analogy from some other decisions to bring the Tendu leaves also as part of exemption notification dealing with minor forest produce. 23. It is their contention that the decisions relied upon by the Petitioners/private Respondents in the matter of Reliance Trading Company, Kerala v. State of Kerala, (2011) 15 SCC 762 and M/s. Shanti Fragrances v. Union of India & Others; Civil Appeal No. 8485 of 2011, decided on 21.09.2017, will have to be understood in the context in which those decisions were rendered. 24. An exemption notification is not like a blackhole that it will suck out all entries given in the taxing statutes even though those goods and items are specifically notified and stand as they are without being altered or modified or indicated in the exemption notification. When they are specific taxable goods which are stand alone entries and are identifiable as such of commercial value, then unless the exemption notification specifically touches upon such entries for the benefit of exemption or concession, the Courts will not rush in to bring all such items which can fit into the general notification even though those items may come withi....