STATE OF TAMIL NADU Vs. A JAYARAMAN

JUDGEMENT

(1.) THE point in issue in this writ petition is as to whether the levy of additional sales tax at 1% so as to bring the rate of tax to 4% in respect of interstate sale of cotton during the assessment year 1996-97 is correct when the rate of tax under the local Act is only 3%.

(2.) THE facts are :

(3.) SECTION 8(2-A) opens with a non-obstante clause which gives an overriding effect over the provisions contained in section 6(1-A) and over sub-section (1) as well as clause (b) of sub-section (2) of section 8. The sub-section seeks to provide exemption to a dealer with respect to his turnover in so far as his turnover or any part thereof relates to (a) 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 (b) where his turnover or any part thereof relates to the sale of any goods, the sale or purchase of which, is subject to tax, generally at a rate, which is lower than four per cent. In a case covered by (a), the Central sales tax will be `nil' while in a case falling under (b), Central sales tax shall be chargeable at the same lower rate at which the State sales tax is chargeable. The exemption appended to sub-section seeks to define the words "exempt from tax generally". The explanation is couched in negative terms. It says that for the purposes of the said sub-section, a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State sales tax law if (1) under the State law the sale or purchase of such goods is exempt only in specified circumstances or (ii) if under the State law the sale or purchase of such goods is exempt only under specified conditions or (iii) if under the State law, the tax is levied on the sale or purchase of such goods at specified stages or (iv) where under the State law, the tax is levied otherwise than with reference to the turnover of the goods vide Hindustan Paper Corporation Ltd., vs. State of Kerala , reported in (1993) 89 STC 473 (SC).