1964 (7) TMI 28 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the first appellate authority to consider a point not raised by the assessee.
2. Legality of disallowing deductions in contravention of the notice terms.
3. Interpretation of Article 286(1)(a) regarding delivery of goods outside the state.
4. Classification of sales as inter-State trade or commerce under Article 286(2).

Detailed Analysis:

1. Jurisdiction of the First Appellate Authority:
The petitioner argued that the first appellate authority had no jurisdiction to consider a point not raised by the assessee in his appeal. However, this issue was not pressed by the assessee's counsel during the hearing, and thus, it was not decided by the Court.

2. Legality of Disallowing Deductions:
Similarly, the petitioner contended that the first appellate authority was wrong in disallowing the entire deduction in contravention of the notice terms under rule 58 of the C.P. and Berar Sales Tax Rules, 1947. This issue was also not pressed by the assessee's counsel and was not decided by the Court.

3. Interpretation of Article 286(1)(a):
The primary issue addressed was whether the Tribunal was justified in concluding that the goods were not actually delivered outside the State of Madhya Pradesh as a direct result of sales for the purpose of consumption in that State, thus falling within the meaning of Article 286(1)(a) read with the Explanation to clause (1) of the Constitution.

- The Sales Tax Officer initially allowed deductions for sales outside the State, but the first appellate authority disallowed these deductions, treating all transactions as inside the State. The second appellate authority partially accepted the petitioner's contention, allowing deductions for sales where the consignor and consignee were the same but disallowed others.
- The Tribunal confirmed the second appellate authority's order without providing substantial reasoning.

The Court found that the authorities did not provide clear evidence or findings that the goods were actually delivered within the State. The Supreme Court's decision in Bajarang Jute Mills Ltd. v. State of Andhra Pradesh was cited, emphasizing that "actual delivery" means physical delivery or possession by the purchaser, not merely symbolic or notional delivery.

The Court concluded that there was no material evidence to support the conclusion that the goods were delivered within the State of Madhya Pradesh. Therefore, the sales should be considered as outside the State under Article 286(1)(a).

4. Classification of Sales as Inter-State Trade:
The petitioner initially raised the issue of whether the sales were in the course of inter-State trade or commerce under Article 286(2), but this was not pressed during the hearing and thus was not decided by the Court.

Conclusion:
The Court answered the surviving question in the negative, stating that the Tribunal was not justified in concluding that the goods were not actually delivered outside the State as a direct result of sales for consumption in that State. The department was ordered to pay the costs of the assessee, and the assessee was entitled to a refund of the deposit in all three cases before the Tribunal.