1963 (9) TMI 47 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Board of Revenue under the 1959 Madras General Sales Tax Act.
2. Applicability of Section 61 of the 1959 Act to pending proceedings.
3. Taxability of inter-State sales of rice to dealers in Travancore State.

Detailed Analysis:

1. Jurisdiction of the Board of Revenue under the 1959 Madras General Sales Tax Act

The primary issue was whether the Board of Revenue had the jurisdiction to revise the orders of the Commercial Tax Officer under the new 1959 Act. The assessees contended that the Board lacked jurisdiction because the revision application filed before the Deputy Commissioner under the 1939 Act should have been transferred to the Appellate Tribunal under the 1959 Act. The Court examined Section 34 of the 1959 Act, which restricts the Board from revising an order if it has been made the subject of an appeal to the Appellate Tribunal. The Court concluded that the Board of Revenue was not prevented from exercising its revisional jurisdiction because the right of revision under the old Act lapsed with the enactment of the new Act.

2. Applicability of Section 61 of the 1959 Act to pending proceedings

Section 61(2) of the 1959 Act was scrutinized to determine its impact on pending applications, appeals, and revisions under the old 1939 Act. The Court noted that the 1959 Act did not provide for a right of revision against an appellate order, a departure from the 1939 Act. The Court held that the revision petition pending before the Deputy Commissioner under the old Act could not be transferred to the Appellate Tribunal because no corresponding authority existed under the new Act. The right of revision available under the old Act was deliberately eliminated by the Legislature, and thus, the pending revision petition lapsed.

3. Taxability of inter-State sales of rice to dealers in Travancore State

The Court also addressed whether the sales of rice by the assessee to dealers in Travancore State were taxable under the Madras General Sales Tax Act. The Board had previously held that these inter-State sales were taxable. However, the Court referred to the constitutional Explanation to Article 286(1)(a) and the decision in The Bengal Immunity Company, Ltd. v. The State of Bihar and Others, which indicated that sales involving delivery for consumption outside the State were not taxable under the Madras Act. The appellant produced affidavits from four dealers in Ernakulam, proving delivery for consumption outside the State for a turnover of Rs. 60,917-14-0. The Court accepted these affidavits and ruled that this turnover was not liable to be taxed. However, for the remaining turnover, the appellant's affidavit alone was insufficient to establish that these transactions fell within the constitutional Explanation, and thus, this part remained taxable.

Conclusion:
The appeal was allowed in part. The Court concluded that the Board of Revenue had jurisdiction to revise the orders under the 1959 Act, the pending revision petition under the 1939 Act lapsed, and the turnover covered by the affidavits was not taxable. There was no order as to costs.