1979 (7) TMI 235 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of liability for sales tax on inter-State sales
2. Treatment of turnover for purchases made with declarations in inter-State sales
3. Distinction between purchase for resale in Orissa and subsequent inter-State sales

Analysis:
The judgment by the Orissa High Court pertains to a reference under section 24(1) of the Orissa Sales Tax Act, involving questions regarding the liability of the assessee for sales tax on inter-State sales and the treatment of turnover for purchases made with declarations in inter-State sales. The court substituted the questions posed by the Additional Sales Tax Tribunal with a single question concerning the liability of the assessee for tax on turnover purchased based on declarations but utilized in inter-State sales.

The court clarified that the Central Sales Tax Act does not apply to branch transfers, as there were no inter-State sales involved. The proviso to section 5 of the Orissa Act mandates adding the purchase price of branch transfers to the assessee's turnover. However, for inter-State sales, the court relied on a previous decision to conclude that the sales tax cannot be added to the turnover until the quantum of inter-State sales is determined by the Sales Tax Officer.

Referring to the case law, the court emphasized that sales tax is leviable at a single point, and the proviso under section 5(2)(A)(a)(ii) of the Orissa Act does not apply if the goods purchased for resale in Orissa are resold within the state but are deemed inter-State sales under the Central Act. The court highlighted that the proviso cannot be applied in such cases, as it would not constitute a violation of the declarations made by the assessee.

The court directed the assessing officer to determine the factual aspect of the inter-State sales before refraining the assessment. The judgment was delivered unanimously by both judges, with no costs imposed. The reference was answered in favor of the assessee based on the principles outlined in the Joharimal Gajananda case.

This detailed analysis of the judgment provides insights into the court's reasoning and the application of relevant legal provisions to resolve the issues raised in the reference under the Orissa Sales Tax Act.