1992 (6) TMI 162 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of assessing authority in taxing inter-State transactions.
2. Validity of a specific condition in a notification under the Central Sales Tax Act.

Jurisdiction of Assessing Authority:
The judgment addresses the jurisdiction of the assessing authority in taxing inter-State transactions under the M.P. General Sales Tax Act, 1958. The primary issue was whether the assessing authority in Madhya Pradesh had the jurisdiction to tax the assessee for subsequent inter-State transactions. The case involved the issuance of "C" forms by the assessee for inter-State purchases of goods. The Court discussed the retrospective legislative amendment made to Section 9 of the Central Sales Tax Act, 1956, which clarified the tax liability in cases of subsequent sales. The amendment resolved the ambiguity present in the unamended provision, ensuring that the right to levy and collect tax for subsequent sales is granted even if the prescribed form could have been obtained. Consequently, the Court ruled in favor of the department, highlighting the impact of the legislative change on the case.

Validity of Notification Condition:
The second issue pertained to the validity of a specific condition in a notification issued under the Central Sales Tax Act. The Tribunal had questioned the discriminatory nature of Condition No. 1 in Notification No. 2353-1765-V-SR, dated October 27, 1959, and declared it void. The judgment referenced the decision in Kanpur Vanaspati Stores v. Commissioner of Sales Tax, emphasizing that challenges to the validity of statutory provisions or notifications must be addressed within the framework of the Act. The Court cited previous Division Bench rulings that supported this principle. Ultimately, the Court held that the Tribunal had exceeded its jurisdiction by questioning the validity of the notification, ruling in favor of the department on this issue as well. The references were answered accordingly, with no costs imposed.

In conclusion, the judgment clarified the jurisdiction of the assessing authority in taxing inter-State transactions and affirmed the principle that challenges to statutory provisions must be raised within the statutory framework. The retrospective legislative amendment played a crucial role in resolving the jurisdictional issue, while the Court's analysis emphasized adherence to established legal principles in addressing the validity of statutory notifications.