1968 (3) TMI 96 - HC - VAT and Sales Tax

Summary

Issues:
- Competency of Andhra Pradesh State to levy and collect sales tax from respondents under the Central Sales Tax Act.

Analysis:
The judgment delivered by the Andhra Pradesh High Court, addressed the issue of whether the State of Andhra Pradesh had the authority to impose and collect sales tax from the respondents under the Central Sales Tax Act. The cases involved dealers in grains and commission agents who purchased railway receipts from non-resident dealers in Mysore State and subsequently sold them to buyers in other states. The State of Andhra Pradesh assessed these transactions for tax, leading to appeals and ultimately revision cases brought before the Court.

The Court examined the proviso to subsection (1) of section 9 of the Central Sales Tax Act to determine the State's competency to levy and collect the tax. The proviso states that tax on subsequent sales during the movement of goods from one state to another should be collected in the state from which the registered dealer obtained the necessary form. It was established that the respondents, being registered dealers in Andhra Pradesh, were required to obtain forms from the same state. The Court found that all requirements of the proviso were met in these cases, granting the State of Andhra Pradesh the authority to impose the tax under the Central Act.

The Sales Tax Appellate Tribunal had erred in its interpretation of the proviso, suggesting that tax should be collected by the states where the goods were ultimately sold. The Court clarified that the forms needed for such transactions must be obtained from the state where the goods were purchased, in this case, Andhra Pradesh. The Court also referenced a previous decision by the Madras High Court to support its interpretation of the proviso.

Furthermore, the Court declined to address a new argument raised by the respondents regarding the taxability of transactions under the State sales tax law, as it was not raised before lower authorities. The cases were remitted back to the Tribunal for reconsideration in accordance with the law. Ultimately, the Court allowed the tax revision cases, with no order as to costs.

In conclusion, the judgment affirmed the competency of the State of Andhra Pradesh to levy and collect sales tax from the respondents under the Central Sales Tax Act, based on a thorough analysis of the proviso to section 9(1) and relevant legal precedents.