1975 (7) TMI 130 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of notification issued by State Government under section 8(5) of the Central Sales Tax Act, 1956.
2. Validity of notification in light of the Central Act.
3. Impact of Central Sales Tax (Amendment) Act of 1972 on the notification and assessments.

Analysis:
1. The case involved a firm registered under the Orissa Sales Tax Act, engaged in the purchase and sale of oil-seeds, a declared commodity under the Central Sales Tax Act. The petitioner contended that if purchase tax was paid under the State Act and the commodity became liable to tax under the Central Act, the purchase tax should be refundable. A notification issued by the State Government exempted the petitioner from Central sales tax if tax had been levied under the State Act, subject to specific conditions. However, a previous judgment found this notification to be contrary to the Central Act's scheme, leading to a challenge by the petitioner against the assessment and a notice to reopen previous assessments.

2. The Court analyzed relevant provisions of the Central Sales Tax Act, highlighting section 15(b) which mandates the refund of State tax when goods are sold in inter-State trade and assessed under the Central Act. The Court referred to previous judgments emphasizing that a notification cannot contradict this provision. The petitioner's argument for reconsideration was dismissed, as the validity of the notification had been previously tested and conclusively adjudicated upon. The Court also cited similar views expressed by other High Courts, affirming the notification's inconsistency with the Central Act.

3. The petitioner argued that the Central Sales Tax (Amendment) Act of 1972 validated the notification, making it applicable to completed assessments. However, the Court clarified that the validating Act did not have a prospective effect, and assessments completed after its enforcement would not be protected unless compliant with the Central Act's provisions. Therefore, the petitioner's contentions regarding the notification's validation and assessments for the years 1971-72 and 1972-73 were deemed invalid. Consequently, the writ application was dismissed, with no direction for costs, and the judgment was concurred by B.K. Ray, J.

In conclusion, the Court upheld the assessment of Central sales tax on the petitioner's transactions, emphasizing the notification's inconsistency with the Central Act and the limitations of the validating Act on assessments completed post its enforcement.