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1977 (12) TMI 135 - HC - VAT and Sales Tax
Issues Involved:
1. Inclusion of sales tax collection in turnover. 2. Deduction of sales tax collected from taxable turnover. 3. Eligibility for deduction towards Central sales tax. 4. Assessment of inter-State sales of cotton. 5. Reassessment and limitation period. 6. Nature of transactions as inter-State sales. 7. Compliance with Supreme Court's directions. Issue-wise Detailed Analysis: 1. Inclusion of Sales Tax Collection in Turnover: The assessees objected to the inclusion of sales tax collection in the turnover, arguing that it was improper and unwarranted. The taxing officer overruled these objections, holding that the assessees were eligible for deduction towards Central sales tax only from 16th November, 1957, as per rule 11(2) of the Central Sales Tax Rules, 1957. 2. Deduction of Sales Tax Collected from Taxable Turnover: The assessees contended that the sales tax collected should be deducted from the taxable turnover. The taxing officer, however, determined the net taxable turnover liable to Central sales tax at one percent as Rs. 12,76,440.27, confirming this approach. 3. Eligibility for Deduction Towards Central Sales Tax: The taxing officer allowed deductions on the turnover of Rs. 1,32,27,712.22, fixing the total turnover taxable at one percent under the Central Sales Tax Act at Rs. 1,53,07,997.75. The Supreme Court's decision in State of Mysore v. Yaddalam Lakshminarasimhiah Setty and Sons was initially followed, exempting the inter-State transactions of the assessees from Central sales tax. 4. Assessment of Inter-State Sales of Cotton: The Supreme Court later allowed an appeal by the revenue, setting aside the judgment of this Court and directing that the transactions of sale be assessed to tax in light of the Central Sales Tax Act, as amended by Act 28 of 1969. The taxing officer subsequently revised the assessment, determining the turnover of inter-State sales at Rs. 1,53,07,997.00 and the balance of the tax as Rs. 1,40,315.58 after adjustments. 5. Reassessment and Limitation Period: The assessees argued that the proposed reassessment was time-barred. The Appellate Assistant Commissioner rejected this, stating that the reassessment was made per the Supreme Court's directions and that there was no time-limit for reassessment in view of the appellate and revisional authorities' decisions. The Tribunal also rejected the plea of limitation, emphasizing compliance with the Supreme Court's directions. 6. Nature of Transactions as Inter-State Sales: The Tribunal found that the impugned sales were inter-State sales, noting that the assessees purchased cotton from dealers in other States and instructed them to dispatch the goods to ultimate buyers in this State. The Tribunal concluded that the transactions fell under section 3(b) of the Central Sales Tax Act, liable to tax at one percent. 7. Compliance with Supreme Court's Directions: The Supreme Court's directions were given effect to, and the assessment and subsequent proceedings were conducted accordingly. The Tribunal and this Court found no error of law in the Tribunal's conclusion that the impugned transactions were inter-State sales. Conclusion: This Court dismissed the tax revision case, finding no error of law in the Tribunal's decision and upholding the reassessment made per the Supreme Court's directions. The plea of limitation raised by the assessees was deemed untenable. The petition was dismissed with costs awarded to the revenue.
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