SANGAM POLE WORKS Vs. STATE OF RAJSTHAN

JUDGEMENT

(1.) THE petitioner, M/s. Sangam Pole Works, has filed this writ petition on 18.2.2011. The controversy arises under the provisions of Rajasthan VAT Act, 2003 (for short, hereinafter referred to as 'Act'). The petitioner is the manufacturer and sells P.C.C. poles (Prestress Concrete Cement Poles) and is duly registered under the provisions of the said Act. During the assessment period in question, namely, 1.4.2008 to 31.3.2009, in it return of turnover filed, the petitioner firm sold the said PCC poles to the extent of Rs. 72,98,154/ - purportedly to Ajmer Vidyut Vitran Nigam Ltd., a Government company for power generation and distribution and claimed total exemption from the tax on the strength of S. No. V. 33: F.12(63)/FD/Tax. 2005 -26 dated 28.4.2006 published on 29.4.2006 issued under Section 4(5) of the Act by which the power generating and distribution companies in the State of Rajasthan were added in the Schedule -II of the said Act, which specifies the person or class of persons exempted from payment of tax. The said Schedule -II, inter -alia, includes at Serial No.1, United Nations Organization and its constituent agencies, and at Serial No. 2 Foreign Diplomatic Missions and their Diplomats etc. and at Serial No. 8, inserted by aforesaid amending notification No. dated 28.4.2006, the Rajasthan Rajya Vidhyut Utpadan Nigam Ltd., an four other power generating and distribution companies including, Ajmer Vidyut Vitaran Nigam Ltd., the purchaser of PCC Poles from the petitioner.

(2.) ON the same date i.e. on 28.4.2006, ad -seriatum, the State Government issued another notification, namely, S. No. V. 34: F.12 (63)/FF/Tax/2005 -27 dated 28.4.2006 published on29.4.2006, in exercise of powers under Section 8(3) of the Act and while reiterating the exemption from tax with effect from 1.4.2006 to the sale to or purchase by R.R.V.U. Ltd., R.L.V.P.L., A.V.V.N.L., Ju. V.V.L. and Jd. V.V.N.L. of the goods for exclusive use in generation, transmission or distribution of electric power, were partially exempted to the extent rate of tax exceeding 4% on certain conditions, which inter -alia, required that tax on such sales to or purchase by these power generating, transmission and distribution companies, if already collected in excess of 4%, shall be paid to the State Government and if the tax has already been paid on such sales, such tax shall not be refunded; and the authorized officer of these companies, will furnish to the selling dealer a certificate in the prescribed form appended in the said notification.

(3.) MR . Dinesh Mehta, learned counsel for the petitioner/assessee submitted that Section 8 of the Act, which empowers the State Government to exempt the goods, persons or dealers from tax in Section 8(3) of the Act. Section 8(3) of the Act also empowers the State Government to exempt, whether prospectively or retrospectively from the tax, the sale or purchase by any person or class; of persons as mentioned in Schedule -II, with or without any condition, and therefore, once the State Government put the purchasers, namely, A.V.V.N. Ltd. in Schedule II by Annx. 1 notification No. dated 28.4.2006, there was no power left with the State Government or these was no occasion to issue the subsequent notification No. on the same date or rather in the same breath, only partially exempting such sale to or purchase by these power generating companies over 4% of rate of tax, subject to the conditions stipulated in the said later Notification No. 2005 -27. In the alternative, he also urged that prescribing the rate of tax can be done only as per the charging provision in Sections 3 and 4 of the Act under which Schedule -III to Schedule -VI have been enacted by the State Government and not under Section 8(3) of the Act; and while the Schedule -Ill, which imposes the rate of VAT tax at 1% on the commodities like Bullion, Jewellery, Precious stones, De -oiled cake, Stainless Steel Sheets and Stainless Steel Circles etc. and as many as 197 items have been included in Schedule -IV under Section 4 of the Act prescribing the uniform rate of tax at 5% on the commodities like agriculture implements, all intangible goods like copyright, patent, REP licences etc. and various commodities including the cement concrete mosaic tiles at serial No. 197 in the end of the said Schedule -III.