1975 (3) TMI 111 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of disputed turnover as inter-State sales under Central Sales Tax Act, liability of petitioners for Central Sales Tax, applicability of notification under section 8(5) of Central Sales Tax Act.

Analysis:
The judgment pertains to a case where the petitioners, dealers in cotton, reported a taxable turnover under the Central Sales Tax Act for the assessment year 1959-60. The assessing officer included a turnover relating to the sale of cotton not included in the return as liable to be assessed as inter-State sales under section 3(b) of the Act. The Appellate Assistant Commissioner and the Tribunal upheld this assessment. The petitioners contended that the disputed turnover was not inter-State sales but local sales taxable at the last purchase within the State. However, the Court found that the movement of goods from up-country sellers to the mills clearly established inter-State sales, as the sale to Rajendra Mills was effected by the transfer of documents of title during the goods' movement between states.

The petitioners further argued that since the purchaser had been assessed under the Tamil Nadu General Sales Tax Act, they should not be liable under the Central Sales Tax Act. The Court rejected this argument, stating that the levy under the Central Sales Tax Act after local tax was not prohibited by section 15. The Court emphasized that a mistaken local assessment would not relieve the transaction of its liability to Central sales tax. The judgment distinguished previous cases cited by the petitioners, emphasizing that in this case, there was only one transaction liable under the Central Sales Tax Act.

Additionally, the petitioners raised the issue of a notification under section 8(5) of the Act, which stated that goods already taxed under section 4 would not be subject to Central Sales Tax. The Court found this notification inapplicable to the case, as it came into force after the assessment year in question. Consequently, the Court dismissed the petition, upholding the assessment of the disputed turnover as inter-State sales under the Central Sales Tax Act.