1981 (10) TMI 150 - HC - VAT and Sales Tax

Summary

Issues:
- Exemption claim for the turnover of the sale of oil-seeds under the Central Sales Tax Act.
- Interpretation of sections 14 and 15(a) of the Central Sales Tax Act.
- Conflict of opinion between different court decisions regarding the taxation of declared goods.

Analysis:
The judgment pertains to a revision filed by the Commissioner of Sales Tax, U.P., Lucknow, against an order by the Sales Tax Tribunal, Gorakhpur Bench, Gorakhpur, concerning the assessment year 1975-76. The issue at hand revolves around the exemption claim made by the assessee for the turnover of the sale of oil-seeds amounting to Rs. 60,741.23. The assessee contended that since the oil-seeds were a declared commodity under section 14 of the Central Sales Tax Act, and had already been taxed at the point of purchase, they should not be taxed again at the point of sale to the consumer. The Tribunal favored this argument, leading to the matter being referred to a Division Bench due to a conflict of opinion between previous court decisions.

The judgment delves into the provisions of the Central Sales Tax Act, specifically focusing on sections 14 and 15(a). Section 14 designates certain goods, including oil-seeds, as of special importance in inter-State trade or commerce. Section 15(a) imposes restrictions on the taxation of declared goods within a State, stipulating that such goods shall not be taxed at more than one stage. The court emphasized that if a declared commodity like oil-seeds has already been taxed at one point, it cannot be taxed again at a subsequent stage. This interpretation aligns with the decision in a previous case and is supported by a Supreme Court ruling.

In contrast, a separate case involving cotton yarn is distinguished from the present matter. The court explains that the taxation of cotton yarn at multiple points was permissible before it was included as a declared commodity under section 14 of the Act. However, in the case of oil-seeds, the provisions of sections 14 and 15(a) must be diligently applied. Consequently, the court dismisses the revision, upholding that oil-seeds, having already been taxed once, cannot be subjected to tax again in light of the restrictions imposed by the Central Sales Tax Act.

In conclusion, the court dismisses the revision without costs, affirming the application of sections 14 and 15(a) of the Central Sales Tax Act to prevent the double taxation of oil-seeds.