1962 (2) TMI 69 - HC - VAT and Sales Tax

Summary

Issues:
Assessments under the Central Sales Tax Act, 1956 for the financial years 1957-58 and 1958, Interpretation of sub-section (2) of section 8 of the Central Sales Tax Act, 1956.

Analysis:
The revision petitions by the Department under section 15B(1) of the General Sales Tax Act, 1125, read with section 9(3) of the Central Sales Tax Act, 1956, pertain to assessments under the Central Sales Tax Act, 1956 for the financial years 1957-58 and 1958. The sales in question were of copra and coir, with copra being item No. 37 and coir being item No. 38 of the notification issued by the State. The taxable point under the notification for both items is the last purchase in the State by a dealer not exempt from taxation under the Act.

The Appellate Tribunal held that the sales of the respondents cannot be taxed under the Central Sales Tax Act, 1956, citing that the commodities were already taxed on the purchase point under the State law. The controversy centered around the interpretation of sub-section (2) of section 8 of the Central Sales Tax Act, 1956, which directs treating inter-State sales as intra-State sales and assessing them based on the State enactment. The Tribunal's decision was based on the wording of sub-section (2) of section 8, which justifies not imposing liability under the Central Act if there is no liability under the State enactment.

The Department's argument relied on the latter portion of sub-section (2) of section 8, contending that a transaction could be liable to tax under the Central Act even if not under the State Act. However, the Court rejected this argument, emphasizing that the intention of the legislation was not to override the first part of the subsection. The Court clarified that an inter-State dealer falling under sub-section (2) need not necessarily be liable under the State enactment, as the criteria for taxation may differ between the Central and State Acts.

The Court summarized the injunctions of sub-section (2) as treating inter-State transactions as intra-State, taxing them as per the State Act, and disregarding the dealer's liability under the State Act if there is no such liability. Consequently, the Court dismissed the tax revision cases, holding that the Department must bear the costs of the respondents.

In conclusion, the judgment highlights the importance of interpreting statutory provisions in alignment with legislative intent and ensuring consistency in tax liabilities under both Central and State enactments.