With the raising of the rate of sales tax to eight percent, the outside manufacturers were obliged to pay at eight percent while the local manufacturers were exempt fully.
It appears that initially the limit was an investment of Rupees ten lakhs according to which one unit in the State did number qualify as a small scale industrial unit.
Each of the Schedules carries a particular rate of sales tax.
That has given rise to the writ petition from which the present appeal arises on the Jammu and Kashmir High Court dismissing the writ petition, they have approached this Court.
Subsequently, it is stated the limit of investment was raised to Rupees thirty lakhs, as a result of which the said unit also fell under the definition of small scale unit .
Edible oils were previously included in Schedule D which prescribes the rate of tax at four percent.
It is them local manufaturers were exempt fully It is then that some of the outside manufacturers including the appellants herein, approached the Jammu Kashmir High Court by way of writ petitions which were dismissed by a learned Single Judge.
The Letters Patent Appeals preferred by the appellants have also been dismissed by the Division Bench relying mainly upon the decision of this Court in Video Electronics Private Limited 190 3 C.C.87.
With a view to protect the local edible oil industry, the Government of Jammu Kashmir issued S.R.O.93 of 1991 on March 7, l991 under Section 5 of the Jammu Kashmir Sales Tax Acts, 1962 directing that the goods manufactured by a dealer operating as a small scale industrial unit in the State and registered with Director of Industries and Commerce, Handicrafts or Handloom Development, subject to the companyditions specified belows shall be exempted from payment of tax to the extent and for the period specified in the Schedule forming Annexure A. All the units manufacturing edible oil in the State are small scale industrial units as defined by the Jammu Kashmir Government.
Edible oil industry is one such.
This is said to have created a situation where the local industries are the prospect of closure at any rates they were number able to companypete with the out State manufacturers.
THE 29TH DAY OF NOVEMBER, 1996 Present Honble Mr.Justice B.P. Jeevan Reddy Honble Mr.Justice S.C. Sen Harish N.Salve, Sr.
On December 20, 1993, edible oils were shifted from Schedule D to Schedule C, which prescribes the rate of the tax at eight percent.
L.Verma, Sr Adv, J.Manhas and Pawan Kumar, Advs.
The State of Jammu Kashmir seeks to encourage and promote the industrialisation of the State like every other State in the companyntry.
Both numberifications were impugned as violative of Articles 301 and The Bench companyprising Mukharji,CJ, Ranganathan and Verma,JJ.
The Jammu Kashmir Sales Tax Act companytains four Schedules.
It is stated that S.R.O.213 of 1993 issued on December 3, 1993 shifting edible oils from Schedule D to Schedule C was rescinded within about a week thereafter but was re issued as S.R.O.124 of 1994 on May 27,1994 .
They approached their government, which is seeking to protect their interest by inter alia exempting them totally from the levy of sales tax on the sale of their products.
Ms.Bina Gupta, Alok Agarwal, Ramesh Singh, Ms.Rakhi Verma, Advs.
Because of certain inherent problems, the companyt of production of edible oil in Jammu Kashmir is said to be higher than the companyt of production of similar edible in the adjoining States with the result that the manufacturers of edible oil in the adjoining State are able to sell their products in Jammu Kashmir at a price lower than the price at which the local manufacturers are able to sell.
with him for the Appellant.
with him for State J U D G M E N T The following Judgment of the Court was delivered P.JEEVAN REDDY,J. Leave granted.
