1981 (9) TMI 259 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of proviso to section 5(1-A) of the Punjab General Sales Tax Act, 1948 regarding exemption from sales tax based on certificates from registered dealers.

Analysis:
1. Facts and Background: The petitioner-assessee, a registered dealer, purchased vegetable ghee from unregistered dealers who, in turn, had bought it from a registered dealer. The unregistered dealers provided certificates showing sales tax payment at the first stage. The petitioner claimed exemption from sales tax based on these certificates, but authorities denied it, insisting on certificates from the registered dealer.

2. Division Bench's Decision: Initially, a Division Bench heard the case, with one judge supporting the petitioner based on a previous judgment and the other proposing reconsideration. The matter was referred to a Full Bench due to this difference of opinion.

3. Full Bench Reference: The case was referred to a Full Bench by O. Chinnappa Reddy, J., for reconsideration of the previous judgment's ratio due to conflicting opinions within the Division Bench.

4. Supreme Court's Interpretation: The issue revolved around the proviso to section 5(1-A) of the Act. The Supreme Court clarified that the phrase "registered dealer from whom the goods were purchased" should be understood broadly, allowing exemption even if purchases were not directly from a registered dealer but through intermediaries.

5. Conclusion: The High Court, following the Supreme Court's interpretation, ruled in favor of the petitioner-assessee, stating that the matter is now conclusively settled. The question referred by the Tribunal was answered in the negative, favoring the petitioner-assessee. Each party was directed to bear its own costs.

This judgment clarifies the interpretation of the proviso to section 5(1-A) of the Punjab General Sales Tax Act, emphasizing that certificates from registered dealers for sales tax exemption can extend to purchases made through intermediaries. The ruling aligns with the Supreme Court's decision and resolves conflicting opinions, providing clarity on the exemption process based on certificates provided by dealers in the sales chain.