1968 (10) TMI 102 - HC - VAT and Sales Tax

Issues:
1. Irregularity in making a combined reference for two different dealers under section 11 of the U.P. Sales Tax Act.
2. Validity of treating sales as made during the course of export outside India and exempting them from sales tax.
3. Irregularity in the revising authority accepting an additional question for reference at the instance of the dealer.
4. Claim of exemption from Central sales tax for sales made to the State of Jammu and Kashmir under the Central Sales Tax Act, 1956.
5. Assessment of sales made by M/s. Dhampur Sugar Mills for the assessment year 1957-58.
6. Determination of whether the sales in question qualify as sales in the course of export outside India.

Analysis:

1. The judgment addresses the irregularity in making a combined reference for two different dealers under section 11 of the U.P. Sales Tax Act. The court emphasizes that the procedure adopted by the revising authority in clubbing references for two different dealers is irregular and not permissible under the law, citing the case of Sarju Prasad Behari Lal v. Commissioner of Sales Tax, U.P. The court decides to confine the analysis to the case of Dhampur Sugar Mills only.

2. The primary question raised in the reference is whether the sales made by M/s. Dhampur Sugar Mills qualify as sales made during the course of export outside India and are therefore exempt from the levy of sales tax. The revising authority had treated the sales as exempt from sales tax, leading to a dispute that was brought before the High Court for resolution.

3. The judgment also addresses the irregularity in the revising authority accepting an additional question for reference at the instance of the dealer, which is deemed to be an unauthorized procedure under section 11(1) of the Act. The court highlights that the right to request a reference on a question of law is conferred upon the dealer or the Commissioner, and the revising authority should not entertain additional questions without separate applications.

4. The case involves a claim for exemption from Central sales tax for sales made to the State of Jammu and Kashmir under the Central Sales Tax Act, 1956. The dealer, M/s. Dhampur Sugar Mills, contested the imposition of Central sales tax on sales made to Jammu and Kashmir until a specific date, raising a legal question regarding the applicability of Central sales tax in such transactions.

5. The assessment of sales made by M/s. Dhampur Sugar Mills for the assessment year 1957-58 is a crucial aspect of the judgment. The dealer claimed exemption from Central sales tax on a certain turnover related to goods exported to Mahe railway station. The Sales Tax Officer and the Assistant Commissioner initially rejected this claim, leading to a revision petition before the Judge (Revisions), Sales Tax.

6. The court delves into the determination of whether the sales made by M/s. Dhampur Sugar Mills qualify as sales in the course of export outside India. By examining the facts and circumstances of the case, including the movement of goods and delivery to the buyers, the court concludes that the sales indeed fall under the category of sales in the course of export, exempting the dealer from the payment of Central sales tax. The judgment draws parallels with a previous Full Bench decision to support this conclusion.

In conclusion, the High Court's judgment addresses various procedural irregularities in the reference process, resolves the legal dispute regarding the exemption from sales tax for export transactions, and provides a detailed analysis of the specific case of M/s. Dhampur Sugar Mills concerning the assessment and tax implications of their sales transactions.

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