1984 (11) TMI 315 - HC - VAT and Sales Tax

Issues Involved:
1. Competence of the assessing authority under the Rajasthan Sales Tax Act, 1954, to make an application under section 15(1) of the Rajasthan Act for a matter arising under the Central Sales Tax Act, 1956.
2. Applicability of section 23-B of the Rajasthan Act to the refund of tax deposited under the Central Act.
3. Tax rate on the sale price component of freight not covered by declaration in form C under section 8(4)(a) of the Central Act.
4. Retrospective application of section 9(2) of the Central Act and its incorporation of amendments in the Rajasthan Act.

Detailed Analysis:

1. Competence of the Assessing Authority:
The primary issue was whether the assessing authority under the Rajasthan Sales Tax Act, 1954, acting as the assessing authority under section 9 of the Central Sales Tax Act, 1956, is competent to make an application under section 15(1) of the Rajasthan Act. The court held that the assessing authority is indeed competent to make such applications. Section 9(2) of the Central Act allows the assessing authorities to exercise all powers they have under the general sales tax law of the State, including making an application for reference. The court emphasized that the provisions of the "general sales tax law" of the State, which in this case is the Rajasthan Act, apply to the assessment, collection, and enforcement of payment of tax on inter-State sales.

2. Applicability of Section 23-B of the Rajasthan Act:
In the case of M/s. Haricharanlal & Sons, the assessing authority determined that the tax amount deposited under the Central Act was refundable under section 23-B of the Rajasthan Act but only to the person from whom the assessee had realized it. The Deputy Commissioner (Appeals) modified this order to allow the refund to the assessee directly. The Division Bench of the Board of Revenue upheld this modification. The assessing authority's application to refer the question to the High Court was rejected by the Board of Revenue. The High Court upheld the Board's decision, affirming that section 23-B of the Rajasthan Act does not govern the matter of refund of tax deposited under the Central Act.

3. Tax Rate on Freight Component:
For M/s. Associated Cement Companies Ltd., the Division Bench of the Board of Revenue ruled that the freight component of the sale price not covered by a declaration in form C should be taxed at 3 percent under section 8(1) instead of 12 percent under section 8(2)(b) of the Central Act. The assessing authority's application to refer this question to the High Court was not decided within the prescribed time, leading to an application under section 15(3A) of the Rajasthan Act. The High Court was tasked with determining whether the Board's interpretation was justified. The court upheld the Board's decision, affirming the 3 percent tax rate.

4. Retrospective Application of Section 9(2) of the Central Act:
The court examined the retrospective application of section 9(2) of the Central Act, which was amended in 1969 but deemed effective from 5th January 1957. This amendment incorporated procedural provisions of the general sales tax law of the State, including future amendments. The court rejected the argument that the assessing authority could not make an application for reference under section 15(1) as amended in 1963. The court held that the expression "for the time being in force" in section 2(i) of the Central Act includes future amendments, thus empowering the assessing authority to make such applications.

Conclusion:
The court answered the question in the affirmative, confirming the competence of the assessing authority to make applications under section 15(1) of the Rajasthan Act for matters arising under the Central Act. The reference cases were returned to the Division Bench for adjudication according to law. The judgment clarified the procedural interplay between the Central and State Acts, emphasizing the broad applicability of the State's general sales tax law to inter-State sales tax matters.

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