Power of state govt. to grant exemption from CST subject to fulfill the condition under section 8(4) should not contrary to section 8(5)

Court :
HIGH COURT OF BOMBAY

Brief :
By the aforesaid three trade circulars, the Commissioner has informed the trade that under Section 8(5) of the Central Sales Tax Act, 1956( 'CST Act' for short) as amended by Finance Act 2002 with effect from 11th May 2002, the State Governments are empowered to grant exemption only in respect of interstate sales to the registered dealers or to the Government covered under Section 8(1) of the CST Act unless such sales are supported by declarations in form 'C' or 'D' respectively as provided under Section 8(4) of the CST Act. By the said circulars, the traders are further informed that as a result of the amendment, any Notification issued under Section 8(5) of the CST Act prior to 11th May 2002, which is contrary to the amended Section 8(5) shall stands amended accordingly. In other words, according to the Commissioner, Section 8(5) of the CST Act as amended by the Finance Act 2002 restricts the power of the State Government to grant exemption from payment of tax in respect of sales of goods covered under Section 8(1) subject to fulfilling the conditions of Section 8(4) of the CST Act and, therefore, any Notifications issued to the contrary under Section 8(5) as it stood prior to its amendment by Finance Act 2002 shall stand modified to that extent so that, on amendment of Section 8(5), tax becomes payable in respect of sales which are not covered under Section 8(1) of the CST Act.

Citation :
Prism Cement Limited, (formerly known as H & R Johnson (India) Limited) A Public Limited Company incorporated under the Companies Act, 1956 and having its registered office at 305, Laxmi Niwas Apartments, Ameerpet, Hyderabad – 560 016, Andhra Pradesh, and having eligible unit at Village Gadab, Taluka Pen, District: Raigad. 2. Akshay Raheja, Age about 27 yrs., Shareholder / director of the petitioner No.1 r/at Rahejas, 7th Floor, Corner of Main Avenue & V.P. Road, Santacruz (W), Mumbai – 400 054 …..Petitioners Versus 1. State of Maharashtra, Finance Department, 3rd Floor, Mantralay, Mumbai – 400 032. 2. Commissioner of Sales Tax, Maharashtra State, 8th Floor, Vikrikar Bhavan, Mazgaon, Mumbai – 400 010. 3. Joint Commissioner of Sales Tax (Prof. Tax) Thane Zone, Thane Sales Tax Office, 3rd Floor, Collector Office Compound, Court Naka, Thane (W) 400 601 4. Assistant Commissioner of Sales Tax, (Ass) B195 Raigad, Navi Mumbai.