The Deputy Commissioner of Commercial Taxes vs C. Saravanan and Co.

Sethuraman, J.—This revision has been filed by the State u/s 38 of the Tamil Nadu General Sales Tax Act, 1959, read with Section 9(3) of

the Central Sales Tax Act, against the order of the Sales Tax Appellate Tribunal dated 27th August, 1973. The assessee was assessed under the

Central Sales Tax Act for the year 1970-71 on a turnover of Rs. 5,42,720. The assessee appealed against the assessment questioning the

assessability of the entire turnover before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner did not accept the

assessee''s claim for exemption. The matter thereafter was taken up in the appeal before the Tribunal. The contention before the Tribunal was that

the turnover for the entire year was exempt in accordance with the notification issued on 13th July, 1970, granting full exemption with reference to

jaggery sold in the course of inter-State trade or commerce in respect of which tax has been levied and collected at the point of first purchase

under the provisions of the Tamil Nadu General Sales Tax Act, 1959"". It is not in dispute that this is a case in which tax had been levied and

collected at the point of first purchase in the State under the State Act.

The question is whether the inter-State transaction for the whole year, i.e., 1st April, 1970, to 31st March, 1971, is liable to be exempt or

whether the exemption operates only with reference to the period subsequent to the notification, i.e., 13th July, 1970. In this connection, reference

was made to a decision of the Bombay High Court in Commissioner of Sales Tax v. Cooper & Co. [1968] 22 S.T.C. 111. The Central Sales Tax

Act came into force on 1st July, 1957. A notification was issued on 16th November, 1957. The question was whether the notification had come

into effect on 1st July, 1957, or only from 16th November, 1957. The Bombay High Court held that the notification was effective from 1st July,

1957, that is, the date on which the Act came into force. In coming to this conclusion, the learned Judges have also referred to the fact that the

assessment was with reference to a particular year and that if the sales tax was levied and collected with reference to the period subsequent to the

coming into force of the Central Sales, Tax Act, there would be anomalies. In that case, having regard to the scheme of the Act, it was held that

the notification should be given effect to from 1st July, 1957.

We do not find anything in principle which would differentiate the present case from the one decided by the Bombay High Court in

Commissioner oj Sales Tax v. Cooper & Co. [1968] 22 S.T.C. 111. Following the said judgment, we hold that the notification has to be taken

into account for the whole year 1970-71 only and not merely with reference to the period subsequent to 13th July, 1970, the date on which the

notification came to be issued. Any other conclusion would render the assessee being liable to tax to one part of the year and not being liable to

another part of the year. Unless there is anything in the notification itself which shows that the notification is to be operative only from a particular

date, a reasonable construction of the notification would be that it comes into force from the 1st day of the financial year in which the notification is

issued. The revision fails and is dismissed. No costs.