1959 (6) TMI 11 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the delivery of tea-chests 'free to steamer stations in the Cachar Zone or F.O.R., Karimganj' for despatch outside the State of Assam constituted a 'sale' for the purpose of the Assam Sales Tax Act, 1947, and formed part of the taxable turnover.
2. Whether the lack of a rule or notification regarding the burden of proof of sale to registered dealers amounts to a failure on the part of the assessee to discharge the onus if only the sales tax registration numbers of the registered dealers were supplied.

Detailed Analysis:

Issue 1: Delivery and Sale of Tea-Chests
The primary question was whether the delivery of tea-chests 'free to steamer stations in the Cachar Zone or F.O.R., Karimganj' for dispatch outside Assam constituted a 'sale' under the Assam Sales Tax Act, 1947, and formed part of the taxable turnover. The court examined the nature of the sales transactions, which involved the delivery of goods to steamer stations within Assam for dispatch to other states. The petitioner claimed the sales were inter-State transactions, as the contract for sale was completed in Calcutta, payment was made in Calcutta, and the goods were delivered outside Assam for consumption. The Advocate-General argued that the sales were intra-State as the goods were delivered within Assam, making them taxable under the Assam Sales Tax Act.

The court referred to relevant provisions, including Section 2(12) defining 'sale', Section 3(1-A) exempting certain sales from tax, and Article 286 of the Constitution, which restricts state taxation on inter-State sales. It was concluded that the sale was inter-State in nature since the contract and payment were completed in Calcutta, and the goods were delivered outside Assam for consumption. Thus, the sale could not be taxed under the Assam Sales Tax Act, 1947. The court answered the question in the negative, indicating that such sales were not taxable under the Assam Sales Tax Act.

Issue 2: Burden of Proof for Sales to Registered Dealers
The second issue was whether the absence of a rule or notification about the burden of proof of sale to registered dealers amounted to a failure by the assessee to discharge the onus if only the sales tax registration numbers were supplied. The petitioner argued that they had provided all relevant materials, including the registration numbers of the purchasing dealers, and that no specific form of declaration could be insisted upon since Rule 80 had been declared ultra vires by a Division Bench of the court.

The court noted that the Assistant Commissioner of Taxes had stated that the point was not pressed before him, and this was not challenged before the Commissioner in revision. Therefore, the issue did not arise out of the Commissioner's order. Additionally, the court highlighted that the question of whether the goods were sold to registered dealers for resale was a factual matter within the competence of the assessing authority. The court also examined the decision in Ramesh Chandra Dey v. State of Assam, which declared the amendment to Section 15 and Rule 80 ultra vires only to the extent that they authorized taxing inter-State sales. The requirement for a declaration from the purchasing dealer that the goods were specified in their registration certificate and intended for resale was not declared ultra vires.

The court concluded that the assessing authorities could insist on proof that the goods were specified in the purchasing dealer's registration certificate and intended for resale. Thus, the court answered the second question in the affirmative, upholding the requirement for such proof.

Conclusion
The court answered the first question in the negative, indicating that the sales were inter-State and not taxable under the Assam Sales Tax Act. The second question was answered in the affirmative, allowing the assessing authorities to require proof that the goods were specified in the purchasing dealer's registration certificate and intended for resale. The parties were ordered to bear their own costs.

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