1979 (8) TMI 198 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 29-B of the U.P. Sales Tax (Amendment) Act, 1973 regarding reimbursement of tax paid on inter-State sales.

Detailed Analysis:
The judgment by the Allahabad High Court dealt with the interpretation of section 29-B of the U.P. Sales Tax (Amendment) Act, 1973, concerning the reimbursement of tax paid on inter-State sales. The case involved an assessee who had purchased oil-seeds from both registered and unregistered dealers. The assessee paid tax on purchases from unregistered dealers, but not on purchases from registered dealers as tax was already paid by them. Subsequently, a tax was imposed on the assessee under the Central Sales Tax Act for inter-State sales, which was paid by the assessee. An application for reimbursement under section 29-B was made, which was partially allowed by the Sales Tax Officer, stating that the assessee was not entitled to a refund for tax-paid purchases from registered dealers. However, the revising authority allowed the application, emphasizing that section 29-B permits reimbursement for inter-State sales.

The court analyzed the essential requirements for the applicability of section 29-B, which included the levy of tax on goods referred to in the Central Sales Tax Act, subsequent sale in inter-State trade, application for refund within six months, and reimbursement to the person making inter-State trade. It was established that the assessee met all criteria for reimbursement under the section as the goods were sold in inter-State trade, and tax was paid under the Central Sales Tax Act.

The court rejected the argument that reimbursement should only be made to the person who directly paid the tax, emphasizing that the language of the section did not restrict reimbursement based on the payer of tax. It cited a previous case to highlight the evolution of the reimbursement provision from the Ordinance to the Act, indicating a shift towards reimbursing the person engaged in inter-State trade rather than the direct taxpayer. The court concluded that the assessee was entitled to reimbursement as per the provisions of section 29-B.

In the final decision, the revision was dismissed, and the assessee was granted costs. The judgment clarified the interpretation of section 29-B and affirmed the entitlement of the assessee to reimbursement for tax paid on inter-State sales, irrespective of the direct payer of tax.