1972 (7) TMI 93 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to orders of revision under section 16 of Tamil Nadu General Sales Tax Act read with section 9 of Central Sales Tax Act for assessment years 1964-65, 1965-66, and 1966-67.

Analysis:
The judgment deals with three writ petitions concerning orders of revision by the assessing officer under section 16 of the Tamil Nadu General Sales Tax Act and section 9 of the Central Sales Tax Act for the assessment years 1964-65, 1965-66, and 1966-67. The assessing officer claimed that certain turnover had escaped assessment due to contracts for the sale of yarn at a depot in Calcutta, which, according to the revising authority, constituted inter-State sales subject to tax. The petitioner argued that the goods were sent in bulk without specific contracts and were sold at the discretion of the depot agent, indicating intra-State sales in West Bengal and out of State sales for Tamil Nadu. The revising authority's decision was based on a misconception regarding the nature of transactions between the petitioner and depot agents. The court emphasized the absence of essential elements of inter-State sales and cited precedents to support the petitioner's position.

The court referenced a prior case involving despatches from Tamil Nadu to Bombay, where a sufficient nexus between the producer and ultimate consumer justified inter-State sales tax. However, in the present case, no such link existed between the movement of goods and the buyer's contract, leading to a conclusion that the sales were out of State. The court highlighted the lack of ascertainment of goods in Tamil Nadu and the appropriation occurring in West Bengal, supporting the petitioner's claim of exemption from Central sales tax. The revising authority's jurisdiction to revise the assessment was also questioned, with the court ruling in favor of the petitioner based on established legal principles.

In conclusion, the court allowed the writ petitions, holding that the revising authority's decision lacked legal basis and the commercial activities in question occurred outside the territorial limits of Tamil Nadu. The court did not award costs to any party, and the rules nisi were made absolute, thereby resolving the issues raised in the petitions.