U.P. Asbestos Limited Vs State of Rajasthan & Others (Supreme Court of India)
Supreme Court held that notification dated 09.03.2007 issued by the Government of Rajasthan u/s. 8(3) of Rajasthan Value Added Tax Act, 2003 granting exemption from payment of VAT on sale of asbestos cement sheets and bricks manufactured in the state of Rajasthan is violative of Article 304(a) of the Constitution of India and hence quashed.
Facts- The issue for determination in these appeals concern the validity of the impugned Notification No. S.O.377, dated 09.03.2007, issued by the Government of Rajasthan in exercise of its powers conferred by Section 8(3) of the Rajasthan Value Added Tax Act, 2003. Specifically, the issue concerns whether Notification No.S.O.377 dated 09.03.2007 issued by Respondent State granting exemption from payment of Value Added Tax on sale of asbestos cement sheets and bricks, manufactured in the State of Rajasthan, having contents of fly ash 25% or more by weight subject to specific conditions, is violative of Article 304(a) of the Constitution of India being discriminatory vis-à-vis goods imported from outside the State of Rajasthan.
Conclusion- In Weston Electronics, the reduction on the rate of sales tax on television sets manufactured within the State to 1% whereas television sets imported from outside the State of Gujarat being at 10% was held to be discriminatory in nature and therefore, struck down.
