# Corporation Ltd. And another v. Dolly Dass, JT 1999(3)SC 61

- **Citation:** (2000) 3 ILRA 260
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2000-04-04
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/corporation-ltd-and-another-v-dolly-dass-jt-1999-3-sc-61-39031
- **Pages:** 6

## Text

3All] The Commissioner, Sales Tax, U.P., Lucknow V. M/s Mohkampur Tea Garden 260
Corporation Ltd. And another Vs.
Dolly Dass, JT 1999(3)SC 61.

11. In our opinion the time has come
when these illegalities by the authorities
of detaining and seizing the vehicles must
be strongly checked otherwise the law
will continue to be violated by such
authorities.

In connected similar writ petition No.
355 of 2000, Hindustan Transport
Agency Vs. State of U.P. and another,
Sri Kunwar Saksena, learned counsel for
the petitioner invited our attention to
Annexure 2 to the writ petition. Where the
Sales Tax Authorities, who seized the
vehicles on 4.4.2000 directed on the same
day that the petitioner's vehicle is not
only detained but the petitioner has to
arrange for security of the goods and
vehicle, vide Annexure 2.The petitioner
made representation vide annexures 5 and
6 praying that the vehicle be released and
submitted that the petitioner was suffering
daily loss of Rs.4000/- due to detention of
the vehicle. However, the vehicle was
only released in pursuance of the interim
order dated 21.4.2000 on 25.4.2000

12. We were inclined to grant
compensation to the petitioners in these
cases instead of relegating the petitioner
to file Civil Suites as we want to stop the
illegal practice of detaining and seizing of
the vehicles by the U.P. Trade Tax
authorities. Everyone knows that a Civil
Suit often takes 10 years or more to
decide. And hence we are not relegating
the petitioner to that remedy. However,
Sri
Pradeep
Kumar
Gupta,
learned
Additional
Chief
Standing
Counsel
requested that he will himself speak to the
Commissioner, TRADE TAX.U.P. and
convey the displeasure of this Court , and
the Commissioner will ensure that these
illegalities do not occur in future. WE
accordingly direct the Commissioner,
Trade Tax to charge sheet the officials
who had committed these illegalities and
proceed Departmentally against them.
The Commissioner shall also grant proper
compensation to the petitioners in both
these cases commensatra to the loss they
have suffered preferably within two
months from the date of production of a
certified copy of this order in accordance
with law. The Commissioner shall also
issue insurer to all trade tax authorities for
the with that such illegalities must stop
immediately.

13. Both the petitioners are disposed
of with the aforesaid observations. The
Registrar General of this Court shall send
a copy of the this judgment to the
Principal Secretary, Institutional Finance
(Trade Tax), U.P. Lucknow who in turn
will forward it to all the concerned Trade
Tax authorities including the check post
Officers to ensure strict compliance of
this judgment.

Certified copy of this order will also
be given to the learned counsel of the
parties on payment of usual charges
within two days.

5(9,6,21$/ -85,6',&7,21
5(9,6,21$/ -85,6',&7,21
&,9,/ 6,'(
&,9,/ 6,'(
'$7(' $//$+$%$' $8*867
'$7(' $//$+$%$' $8*867
%()25(
%()25(
7+( +21·%/( 5. $*$5:$/ -
7+( +21·%/( 5. $*$5:$/ -

6DOHV 7D[ 5HYLVLRQ 1R RI

7KH
&RPPLVVLRQHU
6DOHV
7D[
83
/XFNQRZ
«$SSOLFDQW
9HUVXV
0V
0RKNDPSXU
7HD
*DUGHQ
0RKNDPSXU 'HKUDGXQ
«2SS 3DUW\
261 INDIAN LAW REPORTS ALLAHABAD SERIES [2000
&RXQVHO IRU WKH $SSOLFDQW
6UL %. 3DQGH\
6WDQGLQJ &RXQVHO
&RXQVHO IRU WKH 5HVSRQGHQW
6&
83 7UDGH 7D[ $FW6HFWLRQ ‹ UHDG ZLWK
&HQWUDO 6DOHV 7D[ $FW $ μ'HDOHU
$VVHVVHH JUDLQLQJ 7HD RQ KLV RZQ ODQG
FDQ EH H[HPSWHG XQGHU 83 7UDGH 7D[
$FW LQWHUVWDWH VDOH WKH $VVHJHH LV OLDEOH
WR SD\ WKH 7D[ XQGHU &HQWUDO $FW
+HOG
, ILQG WKDW WKH DVVHVVHH RSSRVLWH SDUW\ LQ
WKH SUHVHQW FDVH PD\ QRW EH WUHDWHG DV D
GHDOHU XQGHU WKH SURYLVLRQ RI 83 7UDGH
7D[ $FW LQ UHVSHFW RI WHD JURZQ RQ KLV
RZQ ODQGRU DQ\ LQ WKH ODQG LQ ZKLFK KH
KDV DQ LQWHUHVW DQG VROG E\ KLP EXW
FHUWDLQO\
KH
LV
D
GHDOHU
XQGHU
WKH
SURYLVLRQV RI FHQWUDO 6DOHV 7D[ LQ KH
HIIHFWV LQWHUVWDWH VDOHV 7KH H[HPSWLRQ
XQGHU WKH SURYLVLRQV RI 83 7UDGH 7D[ WR
VXFK D SHUVRQ LV D TXD WKH SHUVRQ DORQH
DQG
QRW
LQ
UHVSHFW
RI
WKH
JRRGV
JHQHUDOO\
7KXV
WKH
JRRGV
DUH
QRW
JHQHUDOO\ HPHPSW XQGHU WKH SURYLVLRQV
RI 83 7UDGH 7$; $FW DQG WKHUHIRUH WKH
LQWHUVWDWH VDOHV RI WHD HIIHFWHG E\ WKH
DVVHVVHH RSSRVLWH SDUW\ LV QRW OLDEOH WR
WD[ DW QLO UDWH XQGHU VHFWLRQ $ RI WKH
&HQWUDO 6DOHV 7D[ $FW 3DUD
&DVH /DZ 'LVFXVVHG
 Y 67&
$,5 6&
9$ 67&
 67&

By the Court

1. Both these revisions have been
filed by the commissioner of Sales Tax
,U.P., Lucknow against the order dated
23.11.1990 passed by the Sales Tax
Tribunal, Division Bench, Dehradun in
Second Appeal , Division Bench,
Dehradun in Second Appeal Nos. 269/90
(1981-82......Central ) and 139/88 (19821983......Central) Under Section 11(1)
Of the U.P. Sales Tax Act (now known
as U.P. Trade Tax Act) hereinafter
referred to as the Act.

2. The facts of the case in brief are
that the assessee opposite party is
engaged in growing tea in his own tea
garden and after necessary processing had
sold the same out side in U.P. During
the assessment years 1981-82 and 198283 the assessee opposite party had
effected sale of tea valued at Rs.
1,63,875.31 paise and Rs. 2,17,584.75
paise respectively out side the Sate of
U.P. The Sales Tax Officer, Dehradun
vide
order
dated
31.3.1986
and
30.03.1987 passed for the assessment
years 1981-82 and 1982-83 respectively
imposed Central Sales Tax on the turn
over of tea by refusing to grant exemption
to the assessee.

3. Feeling aggrieved by the said
order the assessee filed an appeal under
section 9 of the Act before the Assistant
Commissioner Judicial which were
allowed
by
separate
orders
dated
17.02.1987 for the assessment years
1981-82
and
01.01.1988
for
the
assessment
years
1982-83.
The
Commissioner
of Sales Tax feeling
aggrieved by the aforesaid order filled
two second appeals under section 10 of
the before the Sales Tax Tribunal
Dehradun.
The Sales Tax Tribunal
Dehradun by the impugned order dated
23.11.1990
had
dismissed
both
the
appeals filed by the Commissioner of
Sales Tax.

4. I have heard Sri B. K. Pandey,
learned Standing Counsel on behalf of
the appellant. In spite of affidavit of
3All] The Commissioner, Sales Tax, U.P., Lucknow V. M/s Mohkampur Tea Garden 262
service
having
been
filled
by
the
Commissioner
of
Sales
Tax
U.P.
Lucknow no one has put in appearance on
behalf of assessee opposite party. Vide
order dated 3.8.2000 passed on the order
sheet in these cases the court had held the
service to be sufficient.

5. Learned Counsel for the applicant
submitted
that
the
Tribunal
has
Committed manifest error of law in
granting exemption to the interstate sales
of tea effected by the assessee opposite
party in each of the two assessment
orders in question. The submitted that
tea is not generally exempted under the
provisions of U.P. Trade Tax Act and
therefore, it would not be exempted
under section 8 (2-A) of the Central
Sales Tax Act 1956. According to the
learned Standing Counsel under the
U.P. Trade Tax Act a person who sells
agricultural or horticulture produce
grown by himself or grown any other
land in which he has an interest, whether
as owner, us ufractury mortage, tenant or
otherwise or who sells poultry or dairy
products from fowls or animals kept by
him shall not, in respect of such goods,
be treated as a dealer. The proviso to
section 2 ( C ) or the U.P. Trade Tax Act
excludes the aforementioned person from
being treated as a dealer and therefore a
person who grows tea on his own land or
on any land in which he has an interest
and sells such tea is not treated as a
dealer under the provisions of U.P. Trade
Tax Act. But under the Central Sales Tax
Act the definition of thew word dealer as
given in section 2 ( B ) of the said Act
does not exclude such a person from
being considered as a dealer. Thus a
person who grows tea on his won land or
any other land in which he has an interest
and sells it in the course or interstate trade
and commerce is a dealer within the
provision of the Central Sales Tax Act.
He further submitted section 8 (2-A) of
the Central Act only provides for the rates
of tax and in respect of the sale of any
goods the sale or as the case may be
purchased by which is under the Sales
Tax Law of the appropriate stage exempt
from tax generally shall be nil under the
Central Act. According to the learned
Standing Counsel, tea is liable to tax at
the bonds of manufacture or importer and
only such tea which is grown by the
person himself is excluded being not a
dealer. In support of aforesaid plea
learned Standing Counsel relied upon the
decision of the Hon'ble Supreme Court in
the case of Commissioner of Sales Tax,
Jammu reported in (1995) Vol.96 Sales
Tax Cases 355 where in the Hon'ble
Supreme Court had held that Sub Sec. (2A) of the Central Sales Tax Act speaks
of sales and purchase of goods being
exempted generally under the Sate Sales
Tax enactment and it does not speak of
exemption qua the dealer much less qua
unit manufacturing such goods.

6. The Hon'ble Supreme Court
while considering the provisions of 8 (2A) of the Central Sales Tax Act has held
as follows:-

" The idea behind sub-section (2-A)
of section 8 of the Central Sales Tax Act,
which we have analysed here in before, is
to exempt the sale/ purchase of goods
from the Central Sales Tax where the sale
or purchase of such goods is exempt
generally under the State Sates Tax
Law. We must give due regard and attach
due
meaning
to
the
expression
"generally" which occurs in the subsection and which expression has been
detained in the Explanation. If the said
263 INDIAN LAW REPORTS ALLAHABAD SERIES [2000
expression had not been there, it could
probably have been possible to argue that
inasmuch as the goods sold by a particular
manufacturer- dealer are exempt from
the State Tax in his hand, they must
equally be exempt under the Central Act.
But
sub-
section
(2-A)
requires
specifically that such exemption must be
a general exemption and not an
exemption

operative
in
specified
circumstances
or
under

specified
conditions. Can it be said that the goods
sold by the dealers in this case are
exempt from tax generally under the
State Sales Tax enactment . The answer
can only be in the negative such goods
are exempt from tax only when they are
manufactured in a large or medium scale
industrial unit within five years of its
commencement of production and sold
within the said period, i.e. in certain
specified circumstances alone. The
exemption is not a general one but a
conditional one. The exemption under the
Government Order No.159 is not with
reference to goods or a class or category
of goods but with reference to the
industrial unit producing them and their
manufacture and sale within a particular
period.
For
the
purposes
of
the
Government order, the nature class or
category of goods is irrelevant; it may be
may goods. It is concerned only with the
industrial unit producing them and the
period

within
which

they
are
manufactured and sold. Can it be said in
such a case it is an instance where the sale
is of goods, the sale or purchase of
which is under sales tax law of the
appropriate state , exempt from tax
generally. Certainly not, Exemption
provided by Government Order No. 159,
to repeat, is not with reference to goods
but with reference to the industrial unit
.So long as it is ( i ) a large or medium
scale industry and (ii ) it manufactures
and sells goods within the five years of
its going into production , the sale of
such goods is exempt irrespective of
the nature or classification of goods.
Similar goods may be manufactured by
another unit but if it does not satisfy the
above
two
requirements,
the
goods
manufactured and sold by it would not be
entitled to exemption from tax. Indeed,
the goods manufactured by that very unit
would not be eligible for exemption if
they are manufactured after the expiry of
five years from the date it goes into
production and/or sells them beyond the
said period. The period of exemption
may also vary from unit to unit depending
on
the
date
of
commencement
of
production in each unit. For the above
reasons, We are of the opinion that the
exemption granted under the aforesaid
Government
orders
not
satisfy
the
requirements of section 8( 2-A).

7. The principal laid down by the
Hon'ble Supreme Court in the case Pine
Chemicals Ltd. and others (Supra) was
reiterated by the Hon'ble Supreme Court
in the case of Sate of Uttar Pradesh and
another's Vs Hindustan Safety Glass
Works ( P ) Ltd. reported in A.I.R. 1996
S.C. 1519 and Union of India and
another Vs Rapidur (India) Pvt. Ltd.
reported in (2000) Vol.119 Sales Tax
Case Page 18.

8. Having heard learned counsel for
the appellant I find that under the
provisions of U.P. Trade Tax Act tea is
liable to tax generally. It does not attract
tax only when a person growing tea on his
own land or on the land in which he has
an interest sells the same directly as in
that event such a person is not treated as
a dealer in view of the proviso to
3All] The Commissioner, Sales Tax, U.P., Lucknow V. M/s Mohkampur Tea Garden 264
section 2 ( C ) of the U.P. Trade Tax Act.
There is no such corresponding provisions
under the Central Tax Act excluding such
a person from being treated as a dealer.
The proviso of Section 8 ( 2-A) of the
Central Sales Tax would be applicable
only where the goods are exempt from
tax generally and not under some
specified

condition.
Applying
the
principles laid down by the Hon'ble
Supreme Court in the case of pine
Chemicals Ltd.(Supra) I find that the
assessee opposite party in the present
case may not be treated as dealer under
the provisions own land or any in the
land in which he was and interest and
sold by him but certainly he is a dealer
under the provisions of Central Sales Tax
if he effects interstate sales . The
exemption under the provisions of U.P.
Trade Tax to such a person is a qua the
person alone and not introspect of the
goods generally. Thus the goods are not
generally exempt under the provisions
of U.P, Trade Tax Act , and therefore the
interstate sales of tea effected by the
assessee opposite party is not liable to
tax at nil rate under section 8 (2-A) of
the Central Sales Tax Act.

9. The decision of the Hon'ble
Supreme Court in the case of Deputy
Commissioner of Agricultural Income
Tax
and
Sales
Tax,
Quilon
Vs.
Travancore Rubber and Tea Co. reported
in ( 1967 ) 20 Sales Tax Cases page 520
will not be of any help to the assessee
opposite party as the Hon'ble Supreme
Court has held in the aforesaid case that
the onus which lay upon the department
that assessee is a dealer in the Central
Sales Tax Act, has been discharged. It
found that no efforts has been made to
find out the intention with which the
assessee
was
formed
the
selling
organisation it has set up and other
relevant
facts.
Before
the
Hon'ble
Supreme
Court
the
applicability
of
Section B (2-A) of the Central Sales Tax
was not at all raised.

10. The decisions of the Hon'ble
Supreme Court in the case of D.S. Bist
and sons reported in 1979 U.P. Tax case
page 511 only lays down that tea even
after processing remains agricultural
product the same view was taken by this
Court in the case of Dehradun Tea
Company reported in 1980 U.P. Tax
cases page 459. The aforesaid two cases
arose under the provisions of U.P. Trade
Tax Act and the question as to whether
the interstate sales or tea is exempt under
the Central Sales Tax Act or not was not
involved. The reliance placed by the
Tribunal on the aforementioned decisions
for holding that the interstate sales is also
exempt is misplaced.

11. In view of the foregoing
discussions the order of the Tribunal
cannot be sustained and is here by set
aside and it is held that the interetate
sales of tea effected by the assessee
opposite party in each of the two
assessment years in question was not
exempt from payment of tax under
section 8(2-A) of the Central Sales Tax.
Both the revisions succeed and are
allowed. However there shall be no order
as to costs.
Revision Allowed.
265 INDIAN LAW REPORTS ALLAHABAD SERIES [2000

25,*,1$/ -85,6',&7,21
25,*,1$/ -85,6',&7,21
&,9,/ 6,'(
&,9,/ 6,'(
'$7(' $//$+$%$' $8*867
'$7(' $//$+$%$' $8*867
%()25(
%()25(
7+( +21·%/( 5+ =$,', -
7+( +21·%/( 5+ =$,', -
&LYLO 0LVF :ULW 3HWLWLRQ 1R RI

3XQMDE

6LQG
%DQN %UDQFK .KXUMD
'LVWULFW %XODQGVKDKDU WKURXJK LWV %UDQFK
0DQDJHU
«3HWLWLRQHU
9HUVXV
7KH
$GGLWLRQDO
GLVWULFW
-XGJH
9,,
%XODQGVKDKDU DQG RWKHUV «5HVSRQGHQWV
&RXQVHO IRU WKH 3HWLWLRQHU
6KUL 51 .HVDUL
&RXQVHO IRU WKH 5HVSRQGHQWV
6&
6KUL 9LQRG 6LQKD

83
8UEDQ
%XLOGLQJV
5HJXODWLRQ
RI
OHWWLQJ 5HQW DQG (YLFWLRQ $FW
6 UHDG ZLWK &RQVWLWXWLRQ RI ,QGLD
$UWLFOH
(QKDQFHPHQW
RI
UHQW
$SSOLFDWLRQ
IRU
YDOXHUV
RI
ERWK
WKH
SDUWLHV ILOLQJ UHSRUWV 3HWLWLRQHUV YDOXHV
QRW
LQFOXGLQJ
ODQG¶V
YDOXH
LQ
GHWHUPLQLQJ 7KH PDUNHW YDOXH RI WKH
EXLOGLQJ)XUWKHU
WKLV
UHSRUW
QRW
VXSSRUWHG E\ DIILGDYLW&RXUW EHORZ KHOG
ULJKWO\ GLG QRW SODFH DQ\ UHOLDQFH RQ WKH
VDPH+HQFH QR HUURU RI ODZ FRPPLWWHG
+HOG
7KH UHSRUW ILOHG E\ WKH YDOXHU RI WKH
SHWLWLRQHU
ZDV
QRW
VXSSRUWHG
E\
DQ
DIILGDYLW
WKHUHIRUH
WKH
DXWKRULWLHV
EHORZ GLG QRW FRPPLW DQ\ HUURU RI ODZ LQ
QRW SODFLQJ WKH UHOLDQFH XSRQ WKH VDLG
UHSRUW DV WKH VDPH ZDV QRW SURYHG LQ
DFFRUGDQFH ZLWK ODZ ,W PD\ DOVR EH
QRWHG WKDW LI WKH YDOXH RI WKH ODQG LV
LQFOXGHG LQ WKH YDOXH RI WKH EXLOGLQJ DV
GHWHUPLQHG
E\
WKH
YDOXHU
RI
WKH
SHWLWLRQHU WKHUH ZRXOG UHPDLQ QRW PXFK
GLIIHUHQFH LQ WKH WZR UHSRUWV ILOHG EHIRUH
WKH
DXWKRULWLHV
EHORZ
7KXV
WKH
GHWHUPLQDWLRQ RI WKH PDUNHW YDOXH DQG
HQKDQFHPHQW RI UHQW E\ WKH $SSHOODWH
$XWKRULW\ GRHV QRW ZDUUDQW LQWHUIHUHQFH
E\ WKLV FRXUW XQGHU $UWLFOH RI WKH
&RQVWLWXWLRQ RI ,QGLD DV WKH VDPH FDQQRW
EH VDLG WR EH EDG LQ ODZ
83
8UEDQ
%XLOGLQJV
5HJXODWLRQ
RI
OHWWLQJ UHQW DQG (YLFWLRQ $FW 6V
 DQG UHDGZLWK &RGH RI &LYLO
3URFHGXUH 2 5 -XULVGLFWLRQ
RI DSSHOODWH DXWKRULW\ WR DGPLW DGGLWLRQDO
HYLGHQFH
$SSOLFDWLRQ
IRU
DGPLWWLQJ
DGGLWLRQDO
HYLGHQFH
LQ
DSSHDO
QRW
VXSSRUWHG
E\
DIILGDYLW+HOG
ULJKWO\
UHMHFWHG 3DUD
+HOG
)URP WKH DERYH QRWHG GHFLVLRQV LW LV
DSSDUHQW WKDW WKH $SSHOODWH $XWKRULW\
DFWLQJ XQGHU 6HFWLRQ RI WKH $FW KDV
JRW
MXULVGLFWLRQ
WR
DGPLW
DGGLWLRQDO
HYLGHQFH DW WKH DSSHOODWH VWDWH EXW WKH
UHTXLUHPHQWV RI 2UGHU 5XOH &3&
DUH WR EH IROORZHG E\ WKH VDLG DXWKRULW\
ZKLOH DGPLWWLQJ WKH DGGLWLRQDO HYLGHQFH
,Q
WKH
SUHVHQW
FDVH
WKH
$SSHOODWH
$XWKRULW\ KDV IXOO\ IROORZHG WKH DIRUHVDLG
GHFLVLRQV DQG ULJKWO\ UHIXVHG WR DGPLW
WKH
DGGLWLRQDO
HYLGHQFH
DV
WKH
UHTXLUHPHQWV RI 2UGHU 5XOH ZHUH
QRW IXOILOOHG , GR QRW ILQG DQ\ LOOHJDOLW\ LQ
WKH
RUGHU
SDVVHG
E\
WKH
$SSHOODWH
$XWKRULW\ 7KH DSSOLFDWLRQ ILOHG E\ WKH
SHWLWLRQHU
IRU
SHUPLVVLRQ
WR
ILOH
DGGLWLRQDO HYLGHQFH ZDV ULJKWO\ UHMHFWHG
E\ WKH $SSHOODWH $XWKRULW\ 3DUD
&DVH /DZ GLVFXVVHG
 $5& 6& $5& 6&
 $5& $5&
$:& 835&& $5&
 $5& $5& $5&
 $5& $5& $5&
 $5& $5&
 $5& $5&

By the Court

1. By Means of this petition filed
under Article 226 of the Constitution of