1973 (4) TMI 112 - HC - VAT and Sales Tax

Summary

Issues:
Dispute over turnover taxed at 2%, exemption claim for second and subsequent inter-State sales under section 6(2)(b) of Central Sales Tax Act, buyer being Southern Railway not a registered dealer, relevance of D forms and E-1 forms, interpretation of section 6(2) regarding sales to registered dealers, contention on Government department as a registered dealer, comparison with a previous judgment, legislative amendment to section 6(2) allowing exemption for sales to registered dealers or Government.

Analysis:
The judgment dealt with a dispute concerning a turnover taxed at 2% under the Central Sales Tax Act, where the assessee claimed exemption for second and subsequent inter-State sales under section 6(2)(b). The assessing authority disallowed the exemption for a turnover related to sales to the Southern Railway, a non-registered dealer, despite the production of D forms but absence of E-1 forms. The Tribunal upheld the assessment, emphasizing the requirement of sales to registered dealers for exemption under section 6(2). The court analyzed the definition of "dealer" and "registered dealer," concluding that the Government, though a dealer, is not equated to a registered dealer under the Act.

The court rejected the argument that Government departments should be considered registered dealers for section 6(2)(b) application, highlighting the legislative distinction between dealers and registered dealers. Referring to a previous judgment, the court reiterated that exemption under section 6(2) is limited to sales to registered dealers. The court noted a legislative amendment post the previous judgment, extending exemption to sales to registered dealers or the Government, indicating the earlier non-treatment of Government as a registered dealer.

Ultimately, the court dismissed the tax case, affirming the Tribunal's decision and imposing costs. The judgment underscores the strict construction of exemption provisions, the legislative intent behind the distinction between dealers and registered dealers, and the subsequent statutory amendment expanding the scope of exemption for inter-State sales to registered dealers or the Government.