1987 (2) TMI 477 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of inter-State sale for sales tax levy under Central Sales Tax Act.

Analysis:
The case involved a reference by the Tribunal to determine whether the movement of goods from Jaipur to Calcutta constituted an inter-State sale for sales tax purposes under the Central Sales Tax Act. The assessee, a wire cloth manufacturer, transferred goods from its Jaipur factory to its Calcutta head office. The assessing authority treated these transfers as inter-State sales, taxed at 3% based on C forms. The Deputy Commissioner and appellate authority upheld this decision, stating the movement was a consequence of pre-existing sale contracts. The Single Member of the Tribunal also ruled in favor of inter-State sales. However, a Division Bench of the Board of Revenue allowed the assessee's appeal, leading to this revision.

The High Court analyzed the facts and previous decisions. It noted that the Division Bench did not reverse the Single Member's finding that the movement was a direct consequence of sale transactions. The Division Bench considered the Jaipur and Calcutta offices as separate entities, which the High Court deemed erroneous. As the Division Bench failed to provide necessary findings to support its contrary conclusion, the High Court found the Single Member's conclusion of inter-State sales as "irresistible and inescapable."

The High Court rejected the arguments presented by the assessee's counsel, concluding that no further consideration was required based on the established facts. As a result, the revision was allowed, setting aside the Division Bench's order and restoring the Single Bench's decision that the transactions constituted inter-State sales. No costs were awarded in the judgment.