1992 (3) TMI 320 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of provisions of the Rajasthan Sales Tax Act, 1954 regarding levy of tax on branch transfers and inter-State sales.

Analysis:
The revision petition was filed by the assessing authority under section 15(2) of the Rajasthan Sales Tax Act, 1954, questioning the Board of Revenue's decision to set aside the levy of tax under section 2(s)(iv) of the Act. The case involved the submission of "C" forms totaling Rs. 4,05,513 by the assessee for the assessment year 1976-77, which were found to have been issued by the Bombay and Delhi branches. The assessing authority determined the transaction as a branch transfer rather than a sale, holding the assessee liable for purchase tax due to goods transferred against form S.T. 17 without tax payment.

On appeal to the Deputy Commissioner (Appeals), it was held that there was no sale transaction, invoking sections 5-A and 2(s) of the Act, justifying the levy of purchase tax. The revision to the Board of Revenue contended that section 5-A applied only to purchases from unregistered dealers, and section 2(s)(iv) was relevant for goods utilized for other purposes, asserting the transaction as an inter-State sale exempt from section 5-A.

The court noted that for a sale to occur, there must be a transfer of property for money consideration between competent parties, which was absent in this case involving branch transfers. Consequently, the purchase against declaration forms for resale or inter-State sale from a manufacturer was deemed taxable under the amended section 5-A, making the assessee liable for purchase tax. The Board of Revenue's decision was deemed contrary to the Act, quashed, and remanded to the assessing authority for reassessment under section 5-A.

In conclusion, the revision application was allowed, with no order as to costs, granting relief to the assessing authority and upholding the liability of the assessee for purchase tax as per the provisions of the Act.