1963 (4) TMI 48 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of Assessing Authority regarding purchase tax assessment under Punjab General Sales Tax Act, 1948.

Analysis:
The petitioner, a registered dealer and tea merchant, was asked to pay purchase tax amounting to Rs. 952-47 nP by the Assessing Authority. The issue arose when the Authority proposed to re-assess the turnover of the petitioner based on the belief that it had been under-assessed. The petitioner contested the notice, leading to an order stating that the dealer had utilized goods purchased with tax-free concessions for purposes other than intended, making him liable for assessment under the Punjab General Sales Tax Act, 1948.

The crux of the matter was whether the purchase tax could be levied on goods used by the dealer for purposes other than those for which they were sold, especially when sold through commission agents. The definition of "dealer" under section 2(d) of the Act includes commission agents within its scope, implying that they are not considered separate entities from the dealer. The petitioner argued that sales tax was paid on the goods by the commission agents, a claim not supported by the record. As per the petition and the lack of denial in the State's response, it was evident that sales tax was indeed paid. Consequently, the provisions of section 5(2)(a)(ii) of the Act did not apply, leading to the quashing of the Assessing Authority's order and setting aside the petitioner's assessment under the said provision. Any tax paid was to be refunded, and the petitioner was awarded costs amounting to Rs. 50.

In conclusion, the petition was allowed, and the Assessing Authority's order regarding the purchase tax assessment was overturned based on the interpretation of the relevant legal provisions and the factual circumstances surrounding the case.