Ramanujam, J.
1. The dispute in this case relates to a turnover of Rs. 44,355.95 taxed at 2 per cent, which is claimed by the assessee as not liable to be taxed on the ground that it relates to second and subsequent inter-State sales which are exempt under Section 6(2)(b) of the Central Sales Tax Act.
2. The assessee is a registered dealer under the Central Sales Tax Act dealing in paints, turpentine, etc. For the year 1963-64 the assessee returned a taxable turnover of Rs. 545.90. The assessing authority, however, after a check of the accounts of the assessee, determined the taxable turnover as Rs. 64,065.02. In so doing, the assessing authority disallowed the assessee's claim for exemption in relation to the turnover of Rs. 44,355.95 said to relate to second and subsequent inter-State sales coming under Section 6(2)(b) of the Act, as being sales by transfer of documents of title while the goods were in movement from one State to another. The assessee in support of his claim for exemption produced D forms from the subsequent buyer, that is, the Southern Railway, but no E-l forms were produced.
3. Aggrieved against the assessment, the assessee filed an appeal before the Appellate Assistant Commissioner, which was however dismissed. There was a further appeal to the Tribunal where it was urged by the assessee that the assessing officer had not given any reasonable opportunity to produce E-l forms and that as he had produced the necessary E-l forms before the Appellate Assistant Commissioner, he should have allowed the exemption on the disputed turnover. The Tribunal took the view that notwithstanding the production of D forms and E-l forms, as the sales were not shown to be to a registered dealer the claim for exemption under Section 6(2)(b) cannot be sustained. The question in this case is, whether the view taken by the Tribunal is correct in the circumstances of the case.
4. Admittedly, the buyer in respect of the said turnover is the Southern Railway, which is not a registered dealer as defined in Section 2(f) of the Act though they are 'dealers' under the definition in Section 2(b). Section 6(2), as it stood in the relevant assessment year, specifically provides that where a sale in the course of inter-State trade or commerce has occasioned the movement of such goods from one State to another, or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under the Act. Therefore, unless, the assessee establishes that the sale in respect of which exemption is claimed under Sub-section (2) of Section 6 is to a registered dealer, Section 6(2) will not come into play. It is true that the assessee has produced D form certificate from the railway, the purchasing dealer. But such a certificate is relevant only for the purpose of the proviso to Section 6(2)(b) and not for the purpose of Sub-section (2). It is true that the assessee has filed E-l forms before the Appellate Assistant Commissioner. But E-l forms are also not relevant as they have been given only by some of the selling dealers and has no relevance on the question as to whether the buying dealer in the second or subsequent inter-State sale is a registered dealer or not.
5. What the learned counsel for the assessee urges is that the Government department should be treated as a 'registered dealer' for the purpose of application of Section 6(2)(b) as otherwise the exemption provided under that section will not be available to all persons who sell goods to a Government department. We are not, however, inclined to accept this contention of the learned counsel for the definition of 'dealer' in Section 2(b) takes in 'Government' within its scope, but the definition of 'registered dealer' in Section 2(f) does not make any reference to the Government department being treated as a registered dealer. So under the provisions of the Act, Government is treated as a dealer but it is not however equated to a registered dealer. We therefore feel that the Tribunal has come to the right conclusion in this case.
6. On similar facts, this court in T. C. No. 223 of 1967 (Subramaniam Brothers v. State of Madras [1973] 32 S.T.C. 139 has taken the view that where a second or subsequent inter-State sale by transfer of document of title, while there is movement of goods from one State to another, is not to a registered dealer, the benefit of exemption under Section 6(2) cannot be invoked. The relevant observations in that case are these :
It is a well-established canon of construction of statutes that a provision providing for exemption has to be construed strictly. Admittedly, the buyer in this case, namely, the text books department of the Andhra Pradesh Government, is not a registered dealer. Therefore, Section 6(2) cannot be applied to the sales in question as the sales were not to a registered dealer. The fact that Section 7(2) gives some option to certain dealers to register or not to register themselves as dealers under the Central Sales Tax Act is quite irrelevant for the purpose of finding out whether the buying dealer is a registered dealer or not. As a matter of fact, the same statute, while dealing with the concessional rates of tax in respect of inter-State sales, specifically provides under Section 8(1) that the benefit of concessional rate of tax will be available to all sales made to Government or to registered dealers other than the Government. Section 8(1) also specifically directs that the concessional rate of tax will be applicable to all inter-State sales made either to Government or to other registered dealers. But Section 6(2) restricts the exemption only to inter-State sales made to registered dealers. Whether the legislature has made the above distinction deliberately between cases of exemption and cases where the concessional rate of tax is levied, is not clear....
7. It is seen that subsequent to the decision of this court in T. C. No. 223 of 1967 (Subramaniam Brothers v. State of Madras [1973] 32 S.T.C. 139 holding that the Government cannot be treated as a registered dealer on the provisions of the statute as it then stood, the legislature has chosen to amend Section 6(2) by Central Act 61 of 1972 with effect from 1st April, 1973. As per the amended provision, all second and subsequent inter-State sales to a registered dealer or to the Government are entitled to the benefit of exemption. This also shows that before the amendment of Section 6 by Central Act 61 of 1972, the Government was not treated as a registered dealer.
8. Therefore, the tax case is dismissed with costs. Counsel's fee Rs. 150.