To meet the above commitment GOG issued notification on 11.08.2006. This creates discrimination as the exemption has been granted only for work of COTTON TEXTILE FABRICS. We submit that AED is also leviable on rayon, art silk and woollen fabrics. Therefore, we urge that notification which creates discrimination is unwarranted, hence from the aforesaid notification expression 'COTTON' requires to be deleted and substituted as “ALL KIND OF FABRICS”.
This association to meet the averment surges for immunity from levy of VAT. Finding the reason as true the GOG issued another notification on 17.08.2006 by providing concession in levy of tax. We urge here that such notification does not serve the end purpose. As the decision of Five Judges Constituent bench of Hon'ble Supreme Court in GODFREY PHILIPS 2005 (2) SCC 515; (2005) 139 STC 531 page 567, Para 67. The Lordship held that under the Scheme of our Constitution, the States and the Union Territories are excluded from imposing tax on AED items as additional duty of excise is collected by Central Government in replacement of sales tax on these items. We also bring to your kind attention the speech of the Finance Minister, State of Maharashtra on the Budget Estimate, 2007-08 in the legislative Assembly on Thursday, the 22nd March 2007 declared as under:
“Ordinarily textiles are not subjected to sales tax. Instead, the Union Government levies an Additional Duty on Excise on the textile industry. In practice, the levy is affected with reference to different process such as dying and printing of cloth. Here is now a national consensus that so long as these processes are included in the Additional Duties of Excise Act, these processes should not be subjected to Value Added Tax. After considering the entire issue, I have decided that so long as the States are not permitted to levy value added tax on textiles, till that time, these process should not be subjected to value added tax. This decision will take effect from 1st April 2005”. Source: page 86/88 Sales Tax Review March 2007 vol. 53 no. 12.
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