1980 (10) TMI 196 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of sales turnover under Central Sales Tax Act, entitlement to double tax relief under Central Sales Tax Act and Tamil Nadu General Sales Tax Act, validity of assessment by assessing authority, Tribunal's authority to set aside assessment, categorization of hides and skins for the purpose of relief under section 15(b) of the Central Sales Tax Act.

Analysis:
The judgment of the Madras High Court dealt with the case of an assessee who was a dealer in hides and skins, purchasing raw hides and skins in Tamil Nadu, tanning them, and selling them as dressed hides and skins both within the state and in inter-State trade. The assessee's sales turnover of dressed hides and skins in inter-State trade was Rs. 2,24,720.55 for 1973-74, assessable under the Central Sales Tax Act. However, no assessment had been made under the Central Sales Tax Act for that year, and no tax had been paid on the turnover. The assessing authority under Tamil Nadu General Sales Tax Act brought to tax a purchase turnover of Rs. 88,107, representing the value of raw hides and skins sold as dressed hides and skins in inter-State trade. The issue was whether the assessee was entitled to double tax relief under section 15(b) of the Central Sales Tax Act and section 4-A of the Tamil Nadu General Sales Tax Act.

The Court held that the assessee was not entitled to relief as no Central sales tax assessment had been made, and no tax had been paid under the Central Sales Tax Act. The Court noted a change in the Commercial Tax Department's practice regarding double tax relief, emphasizing the requirement of actual payment of Central sales tax for entitlement to relief. The Tribunal had set aside the assessment of the purchase turnover of raw hides and skins for a reason unrelated to the assessment's validity under the State Act. The Court reinstated the assessment, stating that relief under section 15(b) or section 4-A is by way of reimbursement of tax and does not invalidate the assessments. The Tribunal's consideration of the merits of the assessee's claim for relief was deemed premature, as relief could only be claimed after completing assessments under both Acts.

The Court declined to decide on the categorization of hides and skins for relief under section 15(b) due to the pending assessments. It emphasized that the assessing authority should determine eligibility for relief after completing assessments and payment of taxes. The Court allowed the revision, set aside the Tribunal's order, and restored the assessment order, granting costs to the State. The Court refrained from expressing a view on the merits of the assessee's claim for double tax relief, leaving the decision to the assessing authority post-assessments.