UNION OF INDIA Vs. SOUTHERN DISTRIBUTORS

JUDGEMENT

(1.) BOTH the revisions are filed by the Revenue, directed against orders of the Sales Tax Appellate Tribunal, Pondicherry, passed under the Pondicherry General Sales Tax Act, 1967 and also under the Central Sales Tax Act, 1956. The facts leading to the filing of these revisions are : The respondents are dealers in B.H.C. (Technical) pesticide at Pondicherry. They reported a total and taxable turnover of Rs. 2, 61, 896.75 under the local Act and claimed exemption from tax liability for the entire turnover, under a notification issued by the Government of Pondicherry in G.O.Ms. No. 37/70/Fin. (ST), dated August 21, 1970. So also, they reported a total and taxable turnover of Rs. 41, 75, 997.75 and claimed exemption on the same footing. The assessing authority found that the respondents were not entitled to exemption and brought the disputed turnover into taxation by levying tax at the rate of 3 per cent, apart from levying a penalty at Rs. 1, 000. On appeal, the first appellate authority deleted the penalty with regard to the local Act and affirmed the penalty with regard to the assessment under the Central Sales Tax Act. Against these orders, the respondent-assessee filed second appeal to the Sales Tax Appellate Tribunal, Pondicherry. The Sales Tax Appellate Tribunal considered the question whether the goods sold by the petitioners, B.H.C. (Technical) is a pesticide, meant for agricultural use and whether the respondent-assessee is entitled to exemption under both the enactments. The Tribunal, as a fact, found based upon certain materials produced before it to establish that B.H.C. (Technical) is a pesticide and after coming to the conclusion that the documents emanating from expert bodies also reveal the same position, held that B.H.C. (Technical) is a pesticide meant for agricultural purposes. However, having held it as agricultural pesticide, allowed the appeal under the local Act on the ground that B.H.C. (Technical) is a pesticide meant for agricultural purposes, coming within the notification and entitled to exemption. However, with regard to the assessment under the Central Sales Tax Act, the Tribunal held that the respondent-assessee is entitled to exemption under the Central Sales Tax Act, on the ground that once exemption is granted under the local Act, it is also applicable to the respondent's case. The Revenue is before us against these orders. The learned Government Pleader, Pondicherry, contends that the conclusion of the Tribunal that B.H.C. (Technical) is a pesticide is erroneous, since the goods sold by the respondent-assessee is only raw material for making of the pesticides and B.H.C. (Technical) itself cannot be termed as a pesticide to claim exemption under the notification, made under section19 of the Pondicherry General Sales Tax Act, 1967. Learned counsel for the Revenue also contends that the purchasers from the petitioners are industrialists and the pesticides are sold inter-State also and as such there cannot be any ground for granting exemption on the sales of pesticides made by the respondent-assessee. Per contra, learned counsel for the respondent-assessee Mr. C. Venkataraman, draws our attention to the notification issued under section19(1) of the Pondicherry General Sales Tax Act, 1967, and contends that the assessee is entitled to claim exemption, both under the local Act and on the Central Act. Learned counsel points out that the notification cannot be said to be with any condition and as such it has to be held that the notification will apply to an assessment made under the Central Sales Tax Act also.

(2.) WE have considered the arguments of Mr. K. S. Ahmed, Senior Government Pleader, Pondicherry, for the Revenue and Mr. C. Venkataraman, learned counsel for the assessee. The notification relied upon by the assessee-respondent is to the following effect :