1972 (1) TMI 93 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the sales amounting to Rs. 3,74,013.85 were rightly taxed as intra-State sales.
2. Whether the amount of Rs. 4,73,860 received during 1958-59 being the sale price of goods sold in the previous year was rightly held as turnover for the year 1958-59.

Issue-wise Detailed Analysis:

Issue 1: Taxation of Sales Amounting to Rs. 3,74,013.85 as Intra-State Sales
The primary contention was whether the sales amounting to Rs. 3,74,013.85 should be classified as intra-State sales or inter-State sales. The amount comprised Rs. 3,53,623.85 from the sale of steel structures to the railway administration in Izatnagar, Uttar Pradesh, and Rs. 20,390 from the sale of machinery to sugar mills in the same state. The assessee conceded that the Rs. 20,390 could not be claimed as inter-State sales, focusing the dispute on Rs. 3,53,623.85.

The court examined whether there was an obligation to move the goods from Muzaffarpur to Izatnagar arising out of the contract. The Tribunal's supplementary statement confirmed such an obligation existed under the contract of sale. The court held that the sales amounting to Rs. 3,53,623.85 were in the course of inter-State trade and should not have been taxed as intra-State sales. Thus, the sales were wrongly taxed under the Bihar Sales Tax Act and should be exempted from State sales tax.

Issue 2: Turnover of Rs. 4,73,860 for the Year 1958-59
The assessee argued that Rs. 4,73,860 represented sale proceeds from the previous years and not the assessment year 1958-59. They claimed this amount should be taxed at the rate applicable in the previous years, not the higher rate of 4% effective for 1958-59. The assessing officer and subsequent authorities, including the Deputy Commissioner and the Member, Board of Revenue, found that the assessee failed to produce sufficient documentation to substantiate this claim.

The court noted that the Member, Board of Revenue, emphasized the lack of detailed papers from the assessee, making it impossible to determine if the amount represented sales from the previous year. Given this factual finding, the court concluded that no question of law arose from the order of the Member, Board of Revenue, regarding this issue. Therefore, the court refused to answer question No. (ii).

Conclusion:
- Question No. (i): The court answered in the negative for Rs. 3,53,623.85, ruling in favor of the assessee, and in the affirmative for Rs. 20,390, ruling against the assessee.
- Question No. (ii): The court refused to answer as it did not arise from the order of the Member, Board of Revenue.

The assessee was awarded costs, and the hearing fee was assessed at Rs. 250. The reference was answered accordingly.