1989 (8) TMI 325 - HC - VAT and Sales Tax

Summary

Issues:
1. Levy of purchase tax on building materials for repairs, renewal, and maintenance of buildings.
2. Levy of purchase tax on purchase of tyres for trucks used for public hire.
3. Referral of the point regarding purchase tax on building materials to the Division Bench.

Analysis:
1. The case involved a reference made by the Tribunal under section 44(1) of the M.P. General Sales Tax Act, 1958, regarding the levy of purchase tax on building materials purchased for repairs, renewal, and maintenance of buildings. The assessee, a manufacturer and dealer of pipes and pipe fittings, contended that the purchase tax was not applicable as the building materials were not purchased in the regular course of business but for specific repair purposes. The High Court, relying on precedent, held that the activity of construction, even for maintenance, is not considered part of the dealer's business, thus ruling against the levy of purchase tax on building materials used for repairs.

2. The second issue concerned the levy of purchase tax on tyres purchased for trucks used for public hire by the assessee. The assessee argued that since the trucks were not used to transport goods related to his ceramics business, he should not be considered a dealer in the activity of plying trucks for public hire. The High Court agreed with the assessee, emphasizing that the definition of a dealer involves dealing in goods, and the transport service alone does not make the assessee liable for purchase tax on tyres for trucks used for public hire.

3. The third issue revolved around the Tribunal's referral of the point regarding purchase tax on building materials to the Division Bench. The High Court found that the Tribunal's decision to refer the point was justified under the M.P. Land Revenue Code rules. Consequently, the High Court answered this question in the affirmative, supporting the Tribunal's action in referring the issue to the Division Bench.

In conclusion, the High Court ruled in favor of the assessee on the first two issues, denying the levy of purchase tax on building materials for repairs and on tyres for trucks used for public hire. However, the Court upheld the Tribunal's decision to refer the issue of purchase tax on building materials to the Division Bench. The Court made no order regarding costs for the reference.