STATE OF WEST BENGAL Vs. MADANLAL SHROFF

JUDGEMENT

(1.) These appeals are at the instance of the State of West Bengal and others and they are directed against the judgment and order dated 13th November, 1979 of his Lordship the Honourable Mr. Justice D. K. Sen, inter alia, declaring that the impugned notification amending Rule 3(28) of the Bengal Sales Tax Rules, 1941 is ultra vires and also commanding the State not to give effect or further effect to the said amended Rule 3(28) and not to withdraw exemption allowed under Sections 14 and 15 of the Central Sales Tax Act, 1956 in respect of carpets.

(2.) Under Clause (x) of Section 14 of the Central Sales Tax Act, 1956, woollen fabrics as defined in item No. 21 of the First Schedule to the Central Excises and Salt Act, 1944 are "goods of special importance" in inter-State trade or commerce. Under Section 15 of the Central Sales Tax Act, 1956 every sales tax law of a State imposing or authorising the imposition of a tax on the sale or purchase of declared goods is subject to the restrictions and conditions mentioned in Clauses (a) to (d) of the said Section 15 of the Act. Under Clause (a) of Section 15, tax payable under the State sales tax law in respect of sale or purchase of goods of special importance inside the State shall not exceed the rate specified in the said Clause (a) of the sale or purchase thereof and such tax shall not be levied at more than one stage. The different clauses of Section 5 of the Bengal Finance (Sales Tax) Act, 1941 prescribe the rates of tax payable by a dealer on his taxable turnover. In respect of taxable turnover as representing sale of goods included in Schedule II [other than those specified by the State under Clause (ccc)], Clause (d) of Section 5(1) of the Bengal Finance (Sales Tax) Act the prescribed rate of sales tax is 11 per cent. Entry No. 24 of Schedule II of the Bengal Finance (Sales Tax) Act is as follows : Carpets of all varieties and descriptions.

(3.) In case woollen carpets are "woollen fabrics" as defined in item No. 21 of the First Schedule to the Central Excises and Salt Act, 1944 then the same being goods of special importance within the meaning of Section 14, Clause (x) of the Central Sales Tax Act tax payable under the Bengal Finance (Sales Tax) Act in respect of sale or purchase thereof cannot exceed the maximum rate specified by Section 16(a) of the Central Sales Tax Act, 1956. In other words, tax under the Bengal Finance (Sales Tax) Act upon taxable turnover representing sales of woollen carpets shall be at a rate not exceeding the maximum laid down in Section 15(a) of the Central Sales Tax Act.