In the High Court of Punjab and Haryana, Chandigarh G.S.T.R. No. 65 of 1990 Date of Decision: January 31, 2009 M/s Escorts Limited, Bahadergarh (Patiala) …Petitioner Versus State of Punjab …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE H.S. BHALLA Present: None for the petitioner. Ms. Sudeepti Sharma, DAG, Punjab, for the respondent. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporters or not? Yes 3. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of G.S.T.R. Nos. 65 and 65-A of 1990 because in both the references common question of law is involved. These references pertains to same dealer-assessee in respect of assessment year 1979-80 and 1980-81. However, the facts are referred from G.S.T.R. No. 65 of 1990. At the instance of the dealer-assessee, the Sales Tax Tribunal, Punjab, Chandigarh (for brevity, ‘the Tribunal) has referred the following question of law, arising out of the common order dated G.S.T.R. No. 65 of 1990 28.3.1989, passed by the Tribunal in Appeal Nos. 235 and 236 of 1986-87 (A-3), for adjudication of this Court: “Whether the expression ‘tax generally at a rate’ occurring in clause (a) of the second proviso to sub section (2) of section 6 and in sub section 2-A of section 8 of the Central Sales Tax Act, 1956, includes additional tax” While referring the aforementioned question of law, the Tribunal has also referred to clause (a) of the second proviso to sub section (2) of section 6 and in sub section 2-A of section 8 of the Central Sales Tax Act, 1956 (for brevity, ‘the Act’), which reads thus:- Clause (a) of the second proviso to sub section 2 of section 6: “Provided further that it shall not be necessary to furnish the declaration or the certificate in clause (b) of the preceding proviso in respect of a subsequent sale of goods if:- (a) the sale or purchase of such goods is, under the sales tax law of the appropriate State exempt from tax generally or is subject to tax generally at a rate which is lower than four percent (whether called a tax or fee of by any other name) and” Sub-section (2-A) of Section 8:- (2-A) Notwithstanding anything contained in sub section (1-A) of section 6 or in sub section (1) or clause (B) of 2 G.S.T.R. No. 65 of 1990 sub section 2 of this section the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to the tax generally at a rate which is lower than four percent (whether called at (as?) tax or fee or by any other name), shall be nil or, as the case may, shall be calculated at the lower rate.” The issue is no longer res integra and has come up for determination of Hon’ble the Supreme Court in the case of Deputy Commissioner of Sales Tax v. Aysha Hosiery Factory (P) Ltd. , [1992] 85 STC 106. It seems to be well settled that additional sales tax would not be leviable on inter-State sales or purchases of goods in regard to which notification has been issued by the concerned State under Section 8(5) of the Act fixing a specific lower rate by keeping in view the larger public interest. It is in this regard that the following observations made in Aysha Hosiery Factory (P) Ltd. (supra) are relevant, which read thus: “…….However, sub-section (2-A) of this section states that notwithstanding anything contained in clause (b) of sub-section (2) the tax payable under the Central Sales Tax Act by the dealer where the intra-State sale of the same under the “sales tax law” of the State is “exempt from tax generally or subject to tax generally at a rate which is lower than four per cent shall be nil or, as the 3 G.S.T.R. No. 65 of 1990 case may be, shall be calculated at the lower rate”. Thus if an intra-State sale by the dealer is exempt then his inter-State sale also will be exempt. If the intra-State sale is taxed at a rate which is lower than four percent, then his inter-State sale of the same commodity shall also have to be taxed at the lower rate applicable in the State. But where the rate of tax applicable to intra-State sale was more than four per cent then the rate applicable for inter-State sale will be 10 per cent or the rate applicable for the local sale whichever is higher….” The aforesaid view has also been affirmed in a subsequent judgment of Hon’ble the Supreme Court rendered in the case of Shree Digvijay Cement Co. Ltd. v. State of Rajasthan, (2000) 1 SCC 688. As a sequel to the above discussion, the question of law is answered in favour of the dealer and against the revenue. (M.M. KUMAR) JUDGE (H.S. BHALLA) January 31, 2009 JUDGE Pkapoor 4