TaxTMI 
TaxTMI 
2024 (11) TMI 1277
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....ows: REDUCTION OF TAX PAYABLE ON SALE OF MANMADE STAPLE FIBRES, ETC. UNDER CENTRAL SALES TAX ACT (G.O.Ms.No.111, Commercial Taxes and Religious Endowments, 7th April 1998). No.II(1)/CTRE/43 (d-7)/98. 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 so to do in the public interest hereby directs that the tax payable by any dealer who does not have any branch transfer or consignment transfer during the year, shall be calculated at the reduced rate of two percent in respect of the sale effected by him in the course of inter-state Trade or Commerce of manmade staple fibres, fibres yarn, filament yarn and waste of any of them. 2. This Notification shall come into force on the 7th April 1998 and shall remain in force upto and inclusive of the 26th March 1999. 3. The Notification, issued under Section 8(5) of the Central Sales Tax Act, (in short 'CST Act') was issued alongside the then existing rate of tax of turnover from sale of polyester fibre yarn, being 8% under Entry 27,....
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....es that the rate stipulated under sub-Section (1) would not apply unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold. That declaration, referred to as 'C' form should contain the prescribed particulars in the form obtained from the concerned assessing authority. 11. Sub-Section (5) with which we are presently concerned, endows the State to, by Notification in the official gazette extend such beneficial terms and conditions on taxability as the State may consider necessary in public interest and may in this regard, impose such conditions as it believes necessary. 12. It is relevant to note that sub-Section (5) starts with a non-obstante clause and reads thus: (5) Notwithstanding anything contained in this section, the State Government may on the fulfillment of the requirements laid down in sub- section (4) by the dealer if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein direct,.......... 13. The portion ....
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....d be taken to this view of the learned Judge. Because section 8(5) of the Central Sales Tax Act is a provision which enable the State Government if it was of the view that it was necessary to do so in the public interest to completely exempt the inter-state sales from payment of tax or reduce the tax payable under the Central Act in respect of inter- state sales. The section itself states the notification will have effect "Notwithstanding anything contained in section 8". Therefore when once a notification is made it will have effect propio vigor and even any amendment of the rate applicable to inter-state sale will not affect the notification under section 8(5) of the Central Sales Tax Act as such unless the notification also is amended along with the amendment of the other provisions in the Section or the amended statute in law the effect of superseding the notification itself. In the case dealt with in Janatha Expeller Co. & Ors. (supra) the levy of additional sales tax could not affect the notification because the notification, though issued by the State Government, was made in exercise of the powers under section 8(5) of the Central Act enacted by the Parliament, and the Keral....
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....rned single Judge that in respect of a case where a notification has been issued under Section 8(5) of the CST Act the amendment to the State Act will not have any effect on the notification. That should have been enough to dispose of the case but they have given an alternative reasoning which in our view is not correct and is against the provisions of Section 8(2-A) of the CST Act itself. For the purpose of applicability of Section 8(2-A) of the CST Act we have to look to the rate of tax applicable for the time being under the local Act at the time when the CST Act was enacted. Any amendment in the local Act ultimately will have a reflection in the assessment of the inter-state sales. We have already discussed the scope of Section 8 (2-A) of the CST Act and in the light of those reasonings the passage extracted above in the judgment of the Division Bench is contrary to law and could not be accepted. 17. The decision relied on by the revenue in the case of Sarvotam Vegetables Products (supra) is by a Division Bench of the Supreme Court and their attention was not drawn to the binding judgment in Aysha Hosiery Factory (P) Ltd. (supra), which has been delivered by a coram of 3 Hon....