1988 (1) TMI 345 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of sales tax law regarding the taxation of steel pipes purchased and sold within a specific period.

Analysis:
The High Court of Madhya Pradesh was presented with a question regarding the taxation of steel pipes under the M.P. General Sales Tax Act, 1958. The issue revolved around whether the assessee, who had purchased steel pipes from registered dealers and paid sales tax, was liable to pay sales tax again when selling the steel pipes. The Court considered the provisions of the Central Sales Tax Act, particularly section 14 which lists declared goods, including iron and steel. The Tribunal found that the steel pipes purchased and sold by the assessee fell within the category of declared goods under the Central Act from 1st April, 1973. The Court also examined section 15(a) of the Central Sales Tax Act, which stipulates that tax on declared goods shall not exceed three per cent of the sale price and shall not be levied at more than one stage.

The Court concluded that since the assessee had already paid tax on the steel pipes when purchasing them from registered dealers, they were not liable to pay tax again when selling the pipes. The application of section 15(a) of the Central Sales Tax Act meant that tax should not be levied at more than one stage for declared goods. Therefore, the Court held that the assessee was not obligated to pay sales tax on the steel pipes sold between 1st April, 1973, and 26th October, 1973, as tax had already been paid at the purchasing stage. Consequently, the Court answered the question in the affirmative, ruling in favor of the assessee. The judgment emphasized the application of the relevant provisions of the Central Sales Tax Act to determine the tax liability on the sale of declared goods like steel pipes during the specified period.