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1989 (1) TMI 344 - HC - VAT and Sales Tax
Issues:
1. Whether the assessees are liable to be taxed on the second sale of goods in the State. 2. Whether the Appellate Tribunal erred in holding the assessees as only second sellers of goods in question in the State. Analysis: The judgment of the Kerala High Court dealt with the issue of taxation on the second sale of goods in the State by the assessees. The assessees, who were dealers in manure, contended that they were not liable to be taxed as they were second dealers in the State. The assessing authority and the first appellate authority held against the assessees, relying on a previous court decision. However, the Appellate Tribunal, in a detailed order, upheld the plea of the assessees, stating that they were only second dealers and not liable to be taxed on the second sale of goods in the State. The Revenue challenged this decision in revisions. During the hearing, the Revenue argued that the Appellate Tribunal erred in not considering section 3(b) of the Central Sales Tax Act and in holding the assessees as only second sellers of the goods. The Court, after examining the facts, found that the goods were transported from Rajasthan to Kerala, with invoices issued in the name of a distributor in Kerala. The distributor then raised a bill on the assessees, charging sales tax and issuing necessary certificates. The Court noted that the distributor was an independent registered dealer, not an agent or intermediary of the Rajasthan dealer. The Court concluded that the contract to supply goods to the assessees was between the distributor and the assessees, separate from the contract with the Rajasthan dealer. Based on these findings, the Court upheld the Tribunal's decision that the assessees were only second sellers and not liable to be taxed. The Court held that there was no need for interference in the decision of the Appellate Tribunal and dismissed the tax revision cases, affirming that the assessees were not liable to be taxed on the second sale of goods in the State.
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