COMMISSIONER OF SALES TAX, JAMMU AND KASHMIR ETC. ETC. v. M/S PINE CHEMICALS LTD. & Ors. ETC. ETC.

Judgment

COMMISSIONER OF SALES TAX, JAMMU AND KASHMIR ETC. ETC .. V. M/S PINE CHEMICALS LTD. AND ORS. ETC. ETC. OCTOBER 24, 1994 A B [M.N. VENKA TACHALIAH, CJ, S. MOHAN AND B.P. JEEV AN REDDY, JJ.] Central Sales Tax Act-Sub-section (2A) of Section 8-J&K General Sales Tax Act-Government Order No. 159-/nd. dated March 26, 1971- /nterpretation of Section 8 (2A) -Claim of benefit of sub-sec. (2A) of C Section 8-Dealers assessees already granted exemption under Government Order No. 159-Whether benefit of sub-section (2A) is available even where goods are exempted with reference to industrial unit and for a specified period as granted under Government Order No. 159- Held, No-Whether an exemption of the nature granted under Government D Order No.

159 is an exemption from the tax 'generally' within the meaning of Section 8 (2A) ·-Held, No. These petitions were filed seeking the review of this Court's judgment and Order dated January 16, 1992 in Pine Chemicals Ltd. and Ors. Etc. Etc. v. Assessing Authority and Ors. Etc. Etc.,(1992] 2 SCC 683. E By this judgment, this court allowed the appeals preferred by the dealers setting aside the judgment of the High Court, while holding that the dealers - assessees were entitled to claim the benefit of the provision contained in sub-section (2A) of Section 8 of the Central Sales Tax Act in view of the exemption granted to them under GQvernment Order No. 159-Ind. dated March 26, 1971 passed under the Jammu and Kashmir F General Sales Tax Act.

For attracting the exemption provided by the Government Order, it had to be established that the goads, the sale or purchase of which was claimed to be exempt from tax, were manufactured by a large or medium scale Industry and that the said goods were manufactured and G sold within five years from the date the said industrial unit had gone into production. The question for consideration is whether the Bench which decided Pine Chemicals was right in holding that the benefit of the said sub section was available even where the goods were exempted with H 123 124 SUPREME COURT REPORTS [1994] SUPP. 5 S.C.R. A reference to industrial unit and for a specified period, viz., period of five years from the date the relevant unit goes into production.

In other words, the question was whether an exemption of the nature granted under Government Order No. 159 was an exemption available "only in specifi,ed circumstances or under specified conditions" within the meaning of the explanation to Section 8 (2A), as contended by the State B or was it a case where the goods were exempted from the tax "generally" within the meaning of Section 8 (2A), as contended by the dealers. Allowing the review petition, this Court HELD : 1.1. The idea behind sub-section (2A) of Section 8 of the Central Sales Tax Act, is to exempt the sale/purchase of goods from the Central Sales Tax where the sale or purchase of such goods is exempt generally under the State Sales Tax Law.

Sub-section (2A) requires specifically that such exemption must be a general exemption and not an exemption operative in specified circumstances or under specified conditions. The exemption under the Government Order No. 159 dated March 26, 1971, is not with reference to goods or a class or category of goods but with reference to the industrial unit producing them and their manufacture and sale within a particular period For the purposes of the Government Order, the nature, class or category of goods is irrelevant; it may be any goods. It is concerned only with the industrial unit producing them and the period within which they are manufactured and sold. In such a case it is not an instance where the sale is of goods, th~ sale or purchase of which is under Sales Tax Law of the appropriate State, exempt from tax generally.

Exemption provided by Government Order No. 159 is not with reference to goods but with reference to the industrial unit. The exemption granted under the Government Order does not sat!sfy the requirements of Section 8 (2A). (129-B-F, 130-A)