1992 (2) TMI 328 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment proceedings for samvat year 2036 challenged due to levy of sales tax on resales.
2. Challenge of order of assessment for samvat year 2036 due to consideration of sales as inter-State sales.
3. Challenge of stay order for assessment proceedings of samvat year 2036 and 2037.

Analysis:
1. The petitioner, a registered partnership firm dealing in automobile tyres and scooters, challenged the assessment proceedings for samvat year 2036 as respondent No. 1 levied sales tax on resales despite the petitioner's contention of not being liable for such tax. The petitioner provided all required documents and certificates from suppliers certifying tax payment. However, respondent No. 1 proposed a draft assessment order for sales tax and penalty, leading to objections and transfer of proceedings to respondent No. 2. The petitioner challenged the second stay order by respondent No. 3 for samvat year 2036, citing lack of consent beyond the initially requested extension.

2. The contention arose regarding the assessment order for samvat year 2036, where sales by respondents Nos. 5 and 6 to the petitioner were considered inter-State sales. The petitioner challenged this assessment, arguing that once these sales were treated as local sales in the suppliers' assessment, the department could not reclassify them as inter-State sales for the petitioner's assessment. Citing a previous case precedent, the Court held that the department was bound by the initial assessment of the vendors and could not alter the classification for the petitioner.

3. The challenge extended to the stay order for assessment proceedings of samvat year 2036 and 2037. While the petitioner disputed the second stay for samvat year 2036 due to lack of consent, the Court found the grievance regarding the stay for samvat year 2037 unsubstantiated, as it was made at the petitioner's request. The Court ruled in favor of the petitioner, declaring the sales as local and modifying the assessment order accordingly. The petition was partly allowed, with costs not specified.

This comprehensive analysis addresses the issues raised in the legal judgment, covering the challenges to assessment proceedings, reclassification of sales, and the validity of stay orders for the petitioner's assessments.