1969 (4) TMI 85 - SC - VAT and Sales Tax

Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the impugned transactions were not purchases within the meaning of section 2(13) of the Bombay Sales Tax Act, 1953? Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the impugned purchases were effected by the respondents outside the State of Bombay and that they were not inside the State of Bombay as per Explanation to article 286(1)(a) of the Constitution of India? Held that - Appeal allowed. Out of the two questions, only one has been answered and the second has not been answered. Even if the judgment of the High Court is communicated as required under section 34(5) of the Act, the Tribunal cannot proceed to dispose of the case consistently with the judgment of the High Court, because there is no judgment of the High Court answering the second question. Set aside the order passed by the High Court and direct that the High Court do hear and dispose of the reference according to law

Summary

Issues:
1. Interpretation of the term "purchases" under section 2(13) of the Bombay Sales Tax Act, 1953.
2. Determination of the actual place of delivery of goods for sales tax purposes.

Analysis:

Issue 1: Interpretation of the term "purchases" under section 2(13) of the Bombay Sales Tax Act, 1953.
The Sales Tax Tribunal of Maharashtra submitted two questions to the High Court of Bombay regarding the nature of certain transactions. The High Court answered the first question negatively, holding that the Tribunal was not justified in law in determining that the transactions were not purchases within the meaning of section 2(13) of the Act. The High Court's decision was based on the facts and circumstances of the case, indicating a disagreement with the Tribunal's interpretation of the term "purchases."

Issue 2: Determination of the actual place of delivery of goods for sales tax purposes.
Regarding the second question, the High Court found that it could not provide an answer based on the available material. Both parties agreed that further evidence was necessary to establish the actual place of delivery of goods. The High Court, however, incorrectly remanded the case to the Tribunal for recording evidence and making a finding. The Supreme Court noted that the High Court's jurisdiction was limited to answering the questions submitted and could not act as an appellate authority over the Tribunal's decision.

The Supreme Court emphasized that the High Court should have followed the procedure outlined in the Act, which allows for the reference of cases back to the Tribunal for additional information if needed. As the High Court failed to answer the second question, the Supreme Court set aside the High Court's order and directed it to hear and dispose of the reference according to law. The Supreme Court clarified that it was not expressing any opinion on the correctness of the High Court's decision on the first question. The appeals were allowed, and the cases were remanded for further proceedings.

In conclusion, the Supreme Court highlighted the importance of adhering to legal procedures and jurisdictional boundaries in resolving tax-related disputes. The judgment underscored the necessity for courts to address all questions submitted to them and to follow statutory provisions for case disposition.