1971 (7) TMI 132 - SC - VAT and Sales Tax

Whether the High Court acted illegally in declining to call upon the Rajasthan Board of Revenue to state a case and refer the same to it under section 15 of the Rajasthan Sales Tax Act, 1954? Held that - Appeal allowed. The High Court of Rajasthan was in error in refusing to call upon the Board of Revenue to state a case on the question of law arising for consideration. The only thing the High Court had to see was whether a question of law did arise out of the order of the Board of Revenue. There can be no doubt that a fairly important question of law arises from and out of that order. The Board of Revenue was not justified in refusing to refer that question to the High Court. Further the High Court erred in summarily dismissing the application made by the assessee. t a reference from the Board of Revenue the High Court had no jurisdiction to decide that question of law.

Issues:
1. Whether the High Court acted illegally in declining to refer a case under section 15 of the Rajasthan Sales Tax Act.
2. Whether the sale price of certain articles is liable to be included in the turnover of the assessee.
3. Interpretation of the definitions of "turnover," "sale price," "dealer," and "business" under the Act.
4. Whether the sale of machinery, iron, steel defectives, or spare parts was part of the business of the assessee.
5. The correctness of the conclusion reached by the authorities under the Act and the High Court.
6. Whether a question of law arose out of the order of the Board of Revenue.
7. Jurisdiction of the High Court to decide the question of law without a reference from the Board of Revenue.
8. Precision and relevance of the questions formulated by the assessee.

Analysis:
The judgment revolves around the issue of whether the High Court erred in declining to refer a case under section 15 of the Rajasthan Sales Tax Act. The appellant, a registered dealer, sold old machinery and spare parts to modernize its mills. The authorities concluded that the disputed turnover should be included in the total assessable turnover of the assessee. The key question was whether the sale of these articles constituted part of the assessee's business, as defined in the Act. The High Court, relying on the definition of "business" in section 2(cc), held that the turnover in question falls within the ambit of business and summarily dismissed the reference request.

The judgment delves into the interpretation of crucial definitions under the Act, including "turnover," "sale price," "dealer," and "business." It contrasts the decision of the High Court with a similar interpretation by the Madras High Court, emphasizing the requirement for a transaction to be connected with trade to qualify as part of the business. The court highlighted the error in the High Court's refusal to call upon the Board of Revenue to state a case on the legal question at hand, stressing the importance of ensuring a question of law arose from the Revenue's order. The court concluded that the High Court lacked jurisdiction to decide the legal issue without a reference from the Board of Revenue and remitted the cases back to the High Court for proper consideration.

In addressing the precision of the questions formulated by the assessee, the court noted their repetitive and imprecise nature, emphasizing the need for clarity and relevance in legal queries. Ultimately, the court allowed the appeals, directing the High Court to instruct the Board of Revenue to state a case and submit the specific legal question for the High Court's decision. The respondents were ordered to bear the costs of the appellants, with the appeals being allowed.

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