1992 (11) TMI 258 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "resale" under section 7(ii) of the Gujarat Sales Tax Act, 1969.

Analysis:
The case involved a question referred to the Gujarat High Court by the Gujarat Sales Tax Tribunal regarding the interpretation of the term "resale" under section 7(ii) of the Gujarat Sales Tax Act, 1969. The matter revolved around a motor vehicle sold by the opponent in 1974, which was originally purchased in 1968. The opponent contended that the sale constituted a resale of goods purchased from a registered dealer. The Sales Tax Officer had included the sale price of the vehicle in the taxable turnover and imposed a penalty, leading to appeals and subsequent decisions by the Assistant Commissioner of Sales Tax and the Tribunal.

The Tribunal ultimately concluded that the opponent had indeed sold the chassis of the motor vehicle, constituting a resale, and therefore, the sale price of the vehicle did not attract any tax. The Tribunal also ruled that the penalties imposed were not leviable. The State of Gujarat then made a reference to the High Court, questioning the Tribunal's decision. The High Court analyzed the evidence presented, including an affidavit and correspondence, to determine the nature of the sale. The Court emphasized that the condition of the goods at the time of resale is crucial in defining "resale" under the Act.

The Court rejected the argument that the vehicle could not be in the same form due to the time elapsed between the original purchase and resale. It noted that the definition of "resale" in the Act does not prescribe a time limit for resale. Therefore, the Court agreed with the Tribunal's findings that the chassis was sold in the same form as purchased, constituting a resale under section 7(ii) of the Act. Consequently, the Court answered the reference in favor of the assessee and against the Revenue, disposing of the matter with no order as to costs.