Corporate Laws :- Sales Tax -Sales Tax Holidays = whether the Government Order No.CI 30 SPC 96 dated 15th March, 1996, namely, the Industrial Policy merely provides for sales tax concession and incentives and nothing more.? The core issue raised in these appeals, in our opinion, is no more res integra. It has been answered in the decision of this Court in “Malnad Areca Processing and Marketing Limited vs. Deputy Commissioner of Commercial Taxes (Assessment) and Others”, reported in (2008) 11 SCC 536. This very Industrial Policy, 1996 was considered by the Court. The Court opined that the same provides for exemption only in respect of sales tax and not for purchase tax as such. As observed in the case of Malnad (supra), the State can levy tax both at the sale point and/or at the purchase point. That distinction being clear, the question of assuming that the purchase tax was also part of the industrial policy under consideration cannot be countenanced. As a result, we find no reason to deviate from the view taken by the High Court in following the principle expounded in the decision of Malnad (supra).

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).10680-10683 OF 2011
M/S HIGH RANGE COFFEE CURING PVT.LTD. APPELLANT(S)
VERSUS
THE STATE OF KARNATAKA & ORS.ETC. RESPONDENT(S)
WITH
CIVIL APPEAL NO.10684 OF 2011
O R D E R

  1. Heard counsel for the parties.
  2. The opening ground urged by the
    appellant is that the High Court ought not to
    have entertained the appeals on merits without
    condoning the delay in filing of appeals. This
    argument though attractive at the first blush,
    does not take the matter any further as we find
    the delay was only of 71 and 283 days
    respectively and sufficient explanation has been
    offered by the respondent(s) which could be
    condoned in the interest of justice and we order
    accordingly.
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  3. The core issue raised in these appeals,
    in our opinion, is no more res integra. It has
    been answered in the decision of this Court in
    “Malnad Areca Processing and Marketing Limited
    vs. Deputy Commissioner of Commercial Taxes
    (Assessment) and Others”, reported in (2008) 11
    SCC 536.
  4. This very Industrial Policy, 1996 was
    considered by the Court. The Court opined that
    the same provides for exemption only in respect
    of sales tax and not for purchase tax as such.
    The relevant discussion in this behalf can be
    discerned from paragraph Nos.15 to 19 of the
    said decision, which read thus:
    “15. In the government order what is
    provided to new industrial units is
    the sales tax exemption or deferral
    of sales tax under the Act and the
    Central Sales Tax Act, 1956 (in short
    “the CST Act”).
  5. Clause 5 of the Government
    Order dated 15-3-1996 of the
    Industrial Policy, 1996-2001 provides
    for sales tax concession and
    incentives. The said clause provides
    for an option to industrial
    investments in the tiny/SSI/medium
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    and large-scale sectors to claim
    either sales tax exemption or sales
    tax deferral.
  6. A sale and a purchase are two
    different aspects of the same
    transaction. Whether sale or
    purchase, it will have same
    ingredients, both in common law and
    also under the Sale of Goods Act. As
    stated by this Curt in Devi Das Gopal
    Krishnan v. State of Punjab1, the
    transaction, which the sales tax laws
    are concerned with, is a transfer of
    property in goods for price, inter
    vivos, both in the case of sale as
    well as purchase.
  7. In the government order, what
    is provided to the new industrial
    units, is an option to claim sales
    tax exemption or deferment of sales
    tax both under the Act and the CST
    Act. In the field of taxation, it is
    recognized that the power to classify
    the objects or persons to be taxed or
    exempted from levy is with the
    legislature. It also enjoys the power
    to select persons or transactions. A
    law of the State, could therefore,
    levy tax both at the sale point and
    at the purchase point.
    1 AIR 1967 SC 1895 = (1967) 3 SCR 557
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  8. Under the government order, the
    policy of the Government as spelt out
    is, that tiny and small-scale
    industries and medium-and large-scale
    industries may exercise their option
    either for sales tax exemption or
    sales tax deferment for number of
    years prescribed in the government
    order itself. In the context in which
    these expressions are used, they only
    mean “sales tax holiday” or exemption
    from payment of sales tax for number
    of years specified, depending on
    where the tiny or small-scale
    industry is located. “Sales tax”
    refers to any tax which includes
    within its scope all “business of
    sale of goods” specified in the
    Schedule. Similarly, “sales tax
    deferral” only means the aforesaid
    industries are entitled to collect
    tax but they need not pay sales tax
    collected immediately to the State.
    If understood in this manner and
    thereafter the New Industrial Policy
    of the State Government for the years
    1993-1998 and the exemption
    notification is looked into, the only
    conclusion that can be drawn is, what
    is exempted under the notification
    issued by the State Government is tax
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    leviable under Section 5 of the Act
    on the goods manufactured and sold by
    an industrial unit. Therefore, the
    notification is in no way in variance
    or contrary to the industrial policy
    for the years 1993-1998. the above
    position has been rightly highlighted
    by the High Court.”
  9. We are in agreement with the opinion as
    recorded in the aforesaid decision, that the
    Government Order No.CI 30 SPC 96 dated 15th
    March, 1996, namely, the Industrial Policy
    merely provides for sales tax concession and
    incentives and nothing more.
  10. Counsel for the appellant was at pains
    to distinguish the judgment on the argument that
    it has only considered the situation covered
    under Section 6 of the Karnataka Sales Tax Act,
    1957, whereas Section 5 of the Act deals with
    both sale as well as purchase, and purchase
    being the part of the same sale, the benefit
    under the policy concerned must be extended also
    for purchase, especially, because of the
    amendment to the policy by inserting the
    industry of the appellant in Appendix-IV. We are
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    not impressed by this submission.
  11. The fact that the appellant/assessee’s
    industry has been included or added in AppendixIV does not mean that the substance of the
    policy has undergone any change. The purport of
    amendment is only to include more industries
    which were left out in the first notification of
    15th March, 1996.
  12. Counsel for the appellant had also
    placed reliance on the Constitution Bench
    decision of this Court in Devi Das Gopal
    Krishnan (supra), in particular, paragraph 24,
    which reads as under:
    “Bearing that in mind let us look at
    clause (ff) in Section 2 of the
    Principal Act in which the said
    clause was inserted. The ingredients
    of the definition of “purchase” are
    as follows : (i) there shall be
    acquisition of goods; (ii) the
    acquisition shall be for cash or
    deferred payment or other valuable
    consideration; (ii) the said valuable
    consideration shall not be other than
    under a mortgage, hypothecation,
    charge or pledge. Clause (h) of
    Section 2 defines thus :
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    “sale” means any transfer of
    property in goods other than
    goods specified in Schedule C
    for cash or deferred payment or
    other valuable consideration
    but does not include a
    mortgage, hypothecation, charge
    or pledge.”
    If we turn to the Sale of Goods Act,
    Section 4 thereof define contract of
    sale of goods. It reads :
    “Contract of sale of goods is a
    contract whereby the seller
    transfers or agrees to transfer
    the property in goods to the
    buyer for a price…“
    The essential requisite of sale are
    (i) there shall be a transfer of
    property or agreement to transfer
    property by one party to another; and
    (ii) it shall be for consideration of
    money payment or promise thereof by
    the buyer. A sale and a purchase are
    different aspects of the same
    transaction. If we look at it from
    the standpoint of a purchaser it is
    purchase and if we look at it from
    the standpoint of the seller it is a
    sale. Whether purchase or sale it
    shall have the said ingredients both
    in common law and under the Indian
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    Contract Act. ‘Price’ has been
    defined in the Sale of Goods Act to
    mean money consideration for the sale
    of goods : see Section 2(10) of the
    Indian Sale of Goods Act. It will,
    therefore, be seen that the
    definition of “purchase” in the Act
    prima facie appears to be wider in
    scope than “sale”. While transfer of
    goods from one person to another is
    the ingredient of “sale” in general
    law, acquisition of goods, which may
    in its comprehensive sense take in
    voluntary as well as involuntary
    transfers, is an ingredient of
    “purchase” in clause (ff). While
    “price”, i.e., money consideration,
    is the ingredient of “sale”, cash,
    deferred payment or any valuable
    consideration is an ingredient of
    ‘purchase’. But a closer scrutiny
    compels us to give a restricted
    meaning to the expression
    “acquisition” and “price”.
    Acquisition is the act by which a
    person acquires property in a thing.
    “Acquire” is to become the owner of
    the property. One can, therefore,
    acquire a property either by
    voluntary or involuntary transfer.
    But the Sales Tax Act applies only to
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    “sale” as defined in the Act. Under
    clause (ff) of Section 2 of the Act
    it is defied as a transfer of
    property. As purchase is only a
    different, aspect of sale, looked at
    from the stand point of the
    purchaser, and as the Act imposes tax
    at different points in respect of
    sales, having regard to the purpose
    of the sale, it is unreasonable to
    assume that the Legislature
    contemplated different categories of
    transactions when the taxable event
    is at the purchase point. Whether it
    is sale or purchase the transaction
    is the same. If it was a transfer
    inter vivos, in the case of a sale,
    it must equally be so in the case of
    a purchase. Context, consistency and
    avoidance of anomaly demand a
    restricted meaning. That it must only
    mean transfer is also made clear by
    the nature of the transactions
    excluded from the acquisition,
    namely, mortgage, hypothecation,
    charge or pledge-all of them belong
    to the species of transfer. We must,
    therefore, hold that the expression
    “acquisition” in clause (ff) of
    Section 2 of the Act means only
    “transfer”.
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  13. The exposition in paragraph 24 of the
    stated decision extracted above itself
    recognizes the distinction between sale and
    purchase as different aspects of the same
    transaction. As observed in the case of Malnad
    (supra), the State can levy tax both at the sale
    point and/or at the purchase point. That
    distinction being clear, the question of
    assuming that the purchase tax was also part of
    the industrial policy under consideration cannot
    be countenanced. As a result, we find no reason
    to deviate from the view taken by the High Court
    in following the principle expounded in the
    decision of Malnad (supra).
  14. The companion appeal, Civil Appeal
    No.10684 of 2011, again raises a technical plea
    regarding justness of exercise of jurisdiction
    by the High Court in recalling the entire
    decision dated 9th March, 2004 at the instance of
    the appellant, who had merely moved an
    application for recall/clarification of one
    sentence occurring in the said decision. The
    fact remains that the appellant, after recall of
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    the entire decision, participated in the appeal
    proceedings before the Division Bench and argued
    the matter on merits. As a result, this
    technical plea cannot be the basis to undo the
    entire judgment which otherwise is in conformity
    with the legal principle stated in the case of
    Malnad (supra).
  15. Hence, these appeals must fail and the
    same are dismissed accordingly. All pending
    applications are also disposed of.
    ………………,J.
    (A.M. KHANWILKAR)
    ………………,J.
    (DINESH MAHESHWARI)
    NEW DELHI
    FEBRUARY 05, 2020
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    ITEM NO.101 COURT NO.7 SECTION IV-A
    S U P R E M E C O U R T O F I N D I A
    RECORD OF PROCEEDINGS
    Civil Appeal No(s). 10680-10683/2011
    M/S HIGH RANGE COFFEE CURING PVT.LTD. Appellant(s)
    VERSUS
    THE STATE OF KARNATAKA & ORS. Respondent(s)
    WITH
    C.A. No. 10684/2011 (IV-A)
    Date : 05-02-2020 These appeals were called on for hearing today.
    CORAM :
    HON’BLE MR. JUSTICE A.M. KHANWILKAR
    HON’BLE MR. JUSTICE DINESH MAHESHWARI
    For Appellant(s) Mr. Yashraj Singh Deora, Adv.
    Ms. Shivangi Sud, Adv.
    Ms. Sonal Mashankar, Adv.
    For M/S. Mitter & Mitter Co., AOR

For Respondent(s) Mr. Basava prabhu S. Patil, Sr. Adv.
Mr. V. N. Raghupathy, AOR
Mr. Manendra Pal Gupta, Adv.
Ms. Rachitha Hirenath, Adv.
Ms. Rudrali Patil, Adv.
Mr. Joseph Aristotle S., AOR
Ms. Radha Rangaswamy, AOR

UPON hearing the counsel the Court made the following
O R D E R
The appeals are dismissed and all pending
applications are also disposed of in terms of
the signed reportable order.
(NEETU KHAJURIA)
COURT MASTER
(VIDYA NEGI)
COURT MASTER
(Signed reportable order is placed on the file.)