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1997 (2) TMI 451 - SC - VAT and Sales TaxWhether it is an inter-State sale taxable in the State of Andhra Pradesh or whether it is an intra-State sale in the other State where the goods are delivered? Held that - Appeal dismissed. If the assessing authorities decide against the appellant, it shall be open to them to file appeal(s) before the Tribunal directly. If and when the Tribunal decides against the appellant, it shall be open to the appellant to approach this Court for appropriate directions. In the circumstances of the case, it is further directed that in case the Tamil Nadu Sales Tax Appellate Tribunal comes to the conclusion that the transactions in question are inter-State sales upon which Central sales tax is leviable in the State of Tamil Nadu, the State of Tamil Nadu shall not enforce their demand for a period of eight weeks from the date of the decision of the Tribunal. Further, till the issue is decided by the Sales Tax Appellate Tribunal, no Central sales tax shall be demanded from the appellant, provided it is established by the appellant that in respect of the same transaction, the appellant has paid tax in another State treating it as an intra-State sale in that other State.
Issues Involved:
1. Jurisdiction of Madras High Court to direct other State Governments to refund tax. 2. Interpretation and status of Section 6-A of the Central Sales Tax Act. 3. Power to reopen orders accepting Form "F". 4. Nature of sales and whether they constitute inter-State sales. 5. Creation of a Central mechanism for resolving inter-State tax disputes. Detailed Analysis: 1. Jurisdiction of Madras High Court: The Madras High Court ruled that it cannot direct other State Governments to refund tax levied and collected under their respective State sales tax enactments. The appellant must approach the authorities under those Acts or the courts in those States for such relief. 2. Interpretation and Status of Section 6-A: The High Court held that Section 6-A does not have a special status or content and cannot be elevated to the status of a constitutional provision. It is like any other provision under the Central Sales Tax Act. The order accepting Form "F" is merely a step-in-aid of, or a part of, the assessment proceedings. 3. Power to Reopen Orders Accepting Form "F": An order passed by the assessing authority accepting Form "F" cannot be reopened except in accordance with Sections 16, 32, and 55 of the Tamil Nadu General Sales Tax Act read with sub-sections (2) and (2A) of Section 9 of the Central Sales Tax Act. A mere change of opinion is insufficient to reopen the order accepting Form "F". 4. Nature of Sales and Whether They Constitute Inter-State Sales: The appellant argued that the sales were intra-State sales in the respective States where the vehicles were delivered and taxed accordingly. The State of Tamil Nadu contended that the transfers constituted inter-State sales taxable under the Central Sales Tax Act. The Court noted that whether the movement of goods is a mere consignment or occasioned by a contract of sale is a question of fact to be decided by the appropriate authority. 5. Creation of a Central Mechanism for Resolving Inter-State Tax Disputes: The Court acknowledged the real and significant problem faced by the appellant due to the potential double taxation of the same transaction by different States. The Court suggested that the creation of a Central mechanism to decide such disputes might be worth considering to avoid harassment and prejudice to assessees. Conclusion: The Supreme Court dismissed the appeals, upholding the High Court's decision. The Court directed that if the Tamil Nadu assessing authorities decide against the appellant, the appellant may file appeals directly before the Tribunal. If the Tribunal also decides against the appellant, the appellant may approach the Supreme Court for appropriate directions. The Court also suggested that the Government of India consider creating a Central mechanism to resolve inter-State tax disputes in the interest of inter-State trade and commerce.
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