1962 (4) TMI 69 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 10(a) of the Bombay Sales Tax Act of 1953 regarding purchases made from dealers outside the State.
2. Determination of whether property in the goods passed outside the State of Bombay.

Analysis:

Issue 1: Interpretation of section 10(a) of the Bombay Sales Tax Act of 1953
The petitioners contended that section 10(a) did not apply to their purchases from dealers outside the State of Bombay, as it only applied to transactions from unregistered dealers within the State. They argued that section 10C should apply, but since rubber was not specified by the State Government, it did not. The Sales Tax Authorities and Tribunal rejected these contentions. The Tribunal concluded that since orders were accepted in Bombay, contracts were entered into there, and property in the goods was intended to pass in Bombay. The High Court upheld this, stating that the property passed in Bombay, making the purchases taxable under section 10(a).

Issue 2: Determination of whether property in the goods passed outside the State of Bombay
The Tribunal found that the property in the goods passed in Bombay based on the facts that orders were accepted in Bombay, bills of lading were in the sellers' names but delivered in Bombay to buyers, and buyers paid insurance, freight, and other charges. The High Court agreed with this finding, stating that the property passed in Bombay. Therefore, the first question was answered in the negative.

The High Court also addressed the argument that section 10(a) did not apply to purchases from dealers outside the State. The petitioners argued that the person in section 10(a) must be a dealer within the State of Bombay, but the Court disagreed. It held that the plain language of the provision indicated that purchases made by a dealer from an unregistered person were taxable. The Court rejected the argument that section 10C covered such transactions exhaustively, stating that section 10(a) applied to registered dealers' purchases. The Court upheld the Tribunal's decision that the purchases were taxable under section 10(a, answering the second question in the affirmative.

In conclusion, the High Court upheld the Tribunal's decision regarding the application of section 10(a) of the Bombay Sales Tax Act to the purchases in question. The petitioners were ordered to pay the respondent's costs.