C.S.T vs Pine Chemicals Ltd on 24 October, 1994
In International Cotton Corpn. (P) Ltd. v. C.To.3, a
Bench of this Court comprising four learned Judges observed
that "the object of subsection (2-A) of Section 8 is to
exempt transaction of sale of any goods if they are wholly
exempt from tax under the sales tax law of the appropriate
State and make the said sales chargeable at lower rates
where under the Sales Tax Act of the State the sale
transactions are chargeable to tax at a lower rate ... ",
though it is true, the point raised and determined in that
case was a different one. In our respectful opinion, the
decision in Indian Aluminium2 which was a decision rendered
by a Bench of three learned Judges was binding upon the
Bench which decided the Pine Chemicals1. (This Bench too
comprised three learned Judges.) It is, however, interesting
to notice that when the above two decisions were brought to
the notice of the Bench, it referred to the ratio of the
said decisions but neither followed it nor made any attempt
to distinguish it but proceeded to make it a basis for their
decision notwithstanding the fact that the said ratio ran
exactly counter to the one adopted by the Bench. The two
decisions did not certainly support the interpretation
adopted in the judgment under review. On the contrary,
they, and in particular the decision in Indian Aluminum2,
militated against the said interpretation. It is for this
reason, coupled with the fact that the interpretation placed
in the judgment under review on Section 8(2-A) may affect a
large number of cases all over the country, that we agreed
to reexamine the issue, which we would not have agreed to
ordinarily.