1973 (4) TMI 111 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of turnover as intra-State or inter-State sales.
2. Applicability of Central Sales Tax Act on disputed turnover.
3. Interpretation of section 9 of the Central Sales Tax Act.
4. Impact of Central Act 28 of 1969 on assessment of turnover.
5. Claim for exemption under section 10 of the amending Act 28 of 1969.

Analysis:

1. The disputed turnover of Rs. 88,494.33 was claimed by the assessee as intra-State sales for the assessment year 1965-66, but the assessing authority considered it to be inter-State sales of automobile parts. The Appellate Assistant Commissioner and the Tribunal upheld the view that the sales were inter-State sales, rejecting the assessee's contention of exemption for second sales of automobile parts within the State of Madras.

2. The Tribunal determined that the turnover in question constituted inter-State sales and considered the applicability of the Central Sales Tax Act on the disputed turnover. It agreed with the revenue that section 9 of the Central Sales Tax Act referred to the Madras General Sales Tax Act, 1939, and upheld the levy on the disputed turnover at the rates applicable under the Madras Act for automobile parts.

3. The revenue argued that the levy under the Central Sales Tax Act should be independent of the local Sales Tax Act if no C forms were produced, but the Tribunal did not accept this contention. The learned Government Pleader highlighted the amendment to section 9 of the Central Sales Tax Act by Central Act 28 of 1969, emphasizing that the turnover should be assessed at the rate provided under the Central Act without reference to the local law.

4. The amendment by Central Act 28 of 1969 allowed the revenue to levy tax on the disputed turnover at 10% or 11% under the Central Sales Tax Act, as no C forms were produced by the assessee. The Tribunal's decision to tax the transactions at 2% and 2.5% was deemed erroneous in light of the amendment and a Supreme Court decision.

5. The assessee contended for exemption under section 10 of the amending Act 28 of 1969, claiming that no tax was collected on the sales of automobile parts due to the belief that they were not taxable under the Central Sales Tax Act. However, as this claim was not made before the Tribunal, the matter was remitted back for further consideration to establish the factual basis for the exemption.

In conclusion, the judgment clarified the application of the Central Sales Tax Act on inter-State sales, emphasized the impact of the amendment by Central Act 28 of 1969, and highlighted the need for proper consideration of exemption claims under the relevant provisions.