1952 (12) TMI 26 - HC - VAT and Sales Tax

Issues Involved:

1. Right of the Province of Bihar to submit an application for revision under Section 24(4) of Act XIX of 1947.
2. Limitation period for the revision application.
3. Interpretation of the agreement dated 28th September, 1943, concerning the passing of property in goods.
4. Relevance of the passing of property in goods before despatch under Section 5(2)(a)(v) of Act VI of 1944.
5. Scope of exemption under Section 5(2)(a)(v) of Act VI of 1944.
6. Exemption from sales tax under Section 5(2)(a)(v) for goods despatched outside Bihar.
7. Sales to registered dealers under Section 5(2)(a)(ii) of Act VI of 1944.

Detailed Analysis:

1. Right of the Province of Bihar to Submit an Application for Revision:
The court examined whether the Province of Bihar had the right to submit an application to the Board of Revenue under Section 24(4) of Act XIX of 1947 for the revision of the Commissioner's order dated 16th August, 1947. The Board of Revenue had considered this issue and allowed the revision application filed by the State of Bihar, setting aside the Commissioner's remand order.

2. Limitation Period for the Revision Application:
The court considered whether the revision application submitted by the Province of Bihar on or after 3rd February, 1948, was barred by limitation. The Board of Revenue did not find the application time-barred and proceeded to hear the matter.

3. Interpretation of the Agreement Dated 28th September, 1943:
The court analyzed the agreement to determine when the property in the goods passed from the assessee to the purchaser. The key question was whether the property passed as soon as the goods were printed and put in a deliverable state, on delivery to the carrier for despatch outside Bihar, or at a later date. This interpretation was crucial for determining the applicability of Section 5(2)(a)(v).

4. Relevance of Passing of Property in Goods Before Despatch:
The court addressed whether the passing of property in the goods before despatch was a relevant consideration under Section 5(2)(a)(v) of Act VI of 1944. The Board of Revenue had initially remanded the case for further examination of this aspect.

5. Scope of Exemption Under Section 5(2)(a)(v):
The court examined whether Section 5(2)(a)(v) only exempted transactions where the property in the goods passed to the vendee outside Bihar by the act of despatch by the dealer. The Board of Revenue's direction to follow the principle laid down in Case No. 64 of 1948 was found to be superseded by the High Court's decision in Tobacco Manufacturers (India) Ltd. v. State of Bihar, which clarified that the Commissioner was the sole authority to determine the despatch of goods outside Bihar.

6. Exemption from Sales Tax for Goods Despatched Outside Bihar:
The court considered whether the assessee was exempt from sales tax on the value of goods printed and despatched to persons outside Bihar under Section 5(2)(a)(v). The Board of Revenue had remanded the case to the Sales Tax Officer to verify the despatches and determine the entitlement to deductions.

7. Sales to Registered Dealers:
The court analyzed whether sales by the assessee to specific companies were sales to "a registered dealer" under Section 5(2)(a)(ii) of Act VI of 1944. The Board of Revenue had directed further examination of the records to ascertain the validity of the assessee's claims.

Conclusion:
The court concluded that the Board of Revenue was incorrect in directing the Sales Tax Officer to follow the principle laid down in Case No. 64 of 1948. Instead, the Sales Tax Officer must follow the principle laid down by the High Court in Tobacco Manufacturers (India) Ltd. v. State of Bihar and then decide on the assessee's entitlement to deductions under Section 5(2)(a)(v) or Section 5(2)(a)(ii) of the Bihar Sales Tax Act, 1944. The reference was answered accordingly with no order as to costs.

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