1984 (3) TMI 373 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the disposal of coal-ash through auction or contract is incidental or ancillary to the trade of Railways?
2. Whether penalty under section 16(1)(b) and (c) can be imposed for specific periods?
3. Whether the realization of tax on coal-ash is justified when tax was already realized on the purchase of coal?

Analysis:

Issue 1:
The judgment addresses whether the disposal of coal-ash through auction or contract is incidental or ancillary to the trade of Railways. The Court refers to a previous case involving the Northern Railway to establish that activities such as selling coal-ash can be considered a business under the Rajasthan Sales Tax Act. The Court concludes that the disposal of coal-ash by the Western Railway through auction or contract is indeed incidental to its trade, making it liable to pay sales tax on the sales of coal-ash. The judgment answers this question in favor of the department.

Issue 2:
Regarding the imposition of penalties under section 16(1)(b) and (c) for specific periods, the Court notes that these questions were not raised or decided by the Board of Revenue, rendering the reference incompetent. As a result, the Court deems these questions as unanswered due to the lack of competence in raising them.

Issue 3:
The judgment also touches upon the issue of the realization of tax on coal-ash when tax was already collected on the purchase of coal. However, the Court finds this question incompetent as it was not raised before the Board of Revenue and therefore remains unanswered.

In conclusion, the judgment rules in favor of the department on the first issue, while deeming the second and third issues unanswered due to their incompetency in the reference made to the Court.