CITY DISTRIBUTORS Vs. STATE OF PONDICHERRY

JUDGEMENT

(1.) THE assessee is City Distributors dealing in pan masala and cutlery items at FF-7, Krishna Vasan Building, 147, A. Madam Street , Pondicherry . For the assessment year 1972-73 the assessee claimed exemption on a turnover of Rs. 29, 05, 400, since the sales turnover of zarda is exempted from sales tax as per Schedule iii, item 25 to the Pondicherry General Sales Tax Act, 1967. THE assessee is selling zarda in the name Parag Zarda. According to the assessing officer, parag zarda is taxable at 3. 5 per cent - single point - under section3 (1) of the Pondicherry General Sales Tax Act. Hence the exemption claimed was not granted and the sales turnover of parag zarda was taxed at 3. 5 per cent single point.

(2.) AGGRIEVED, the assessee filed an appeal before the appellate Assistant Commissioner. The Appellate Assistant Commissioner accepted the contention put forward by the assessee that zarda is exempted under entry no. 25 in Schedule III to the Act 6 of 1967 and accordingly deleted the addition. On a perusal of the order passed by the Appellate Assistant commissioner, the Secretary to the Government in-charge of the Commercial Tax department by exercising his power under section37 of the Act came to the conclusion that the order passed by the Appellate Assistant Commissioner is erroneous and prejudicial to the interest of Revenue. Accordingly he issued the notice to the assessee.

(3.) BUT, according to the facts arising in the present case, entry No. 25 of Schedule III to the Act exempts tobacco and all its products. BUT, there is no specific notification as in the decision cited supra withdrawing the exemption granted under the parent Act. Under such circumstances, the Secretary to the Government of the State should not have entertained any impression that the order passed by the Appellate Assistant commissioner in accordance with the provisions of the Act prevailing on that date is erroneous and prejudicial to the interests of the Revenue.