1952 (7) TMI 12 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of turnover from jute despatched to jute presses under the Assam Sales Tax Act, 1947.

Detailed Analysis:
The case involved a reference under Section 32(3) of the Assam Sales Tax Act, 1947, regarding the assessment of turnover from jute despatched by the assessees to jute presses. Initially, the Superintendent of Taxes assessed the turnover based on the jute despatched to Calcutta, which was later reduced by the Assistant Commissioner. The assessees contended that the jute presses were benami consignees, but the Commissioner of Taxes found no evidence to support this claim. The primary undisputed fact was that the jute was despatched by the assessees to the jute presses as consignees, leading to the legal question of whether this turnover is taxable under the Assam Sales Tax Act, 1947.

The Commissioner of Taxes opined that the transfer of property in goods from the assessees to the jute presses constituted a sale under the Act, regardless of any subsequent diversion or contractual details. The definition of "sale" under Section 2(12) of the Assam Sales Tax Act was crucial, emphasizing the transfer of property in goods for valuable consideration. The assessees argued that restrictions on booking necessitated despatching jute only to jute presses, which were exempt from such restrictions. However, the taxing authorities rejected this argument, finding no proof of booking restrictions or that the jute presses were benami transferees.

The judgment distinguished a previous Division Bench decision where the property rights were reserved by the consignors, unlike in the present case. The Commissioner concluded that the jute presses were the actual consignees for consideration, and the transfer of property occurred upon delivery to the carrier. As there was no reservation of the right of disposal over the goods, the turnover from the jute despatched to the presses was deemed taxable under the Assam Sales Tax Act. The Court upheld this decision, finding it distinguishable from the prior case and ruling in favor of taxing the turnover from jute despatched to the jute presses.

In summary, the Court answered the reference question by affirming that the turnover from the jute despatched to the presses as consignees is taxable under the Assam Sales Tax Act, based on the transfer of property in goods to the consignees for consideration without any reservation of disposal rights by the assessees.