1993 (10) TMI 318 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the term 'sale' under the Rajasthan Sales Tax Act.
2. Determination of liability for purchase tax on goods transferred between branches.
3. Applicability of earlier Division Bench decision by the Tribunal.
4. Levying of purchase tax on goods purchased from a registered dealer.
5. Violation of declaration under ST-17 form and liability for purchase tax.
6. Imposition of penalty under section 16(1)(k) of the Rajasthan Sales Tax Act.
7. Liability to pay interest under section 11-B of the Rajasthan Sales Tax Act.

Analysis:
The judgment addresses various issues raised by the assessee under the Rajasthan Sales Tax Act. The first issue involves the interpretation of the term 'sale' under the Act, specifically regarding transactions between different branches of a firm or company. The court emphasizes that for a transaction to qualify as a sale, there must be an agreement for the transfer of goods from one party to another for consideration, with actual transfer of property. The court rules that transfers between branches, even if separately registered, do not constitute a sale, especially when goods are transferred without a change in ownership. The submission of 'C' forms does not alter the nature of the transaction.

Regarding the liability for purchase tax on goods transferred between branches, the court upholds the assessing authority's decision to levy purchase tax under section 5-A of the Act. The court explains that the assessee's failure to utilize the purchased goods for the declared purposes results in liability for tax under the relevant provisions. The court rejects the argument that retrospective amendments to section 5-A should absolve the assessee from interest liability, stating that the liability arises from the failure to comply with the earlier provisions.

The judgment also addresses the imposition of a penalty under section 16(1)(k) of the Act. The court rules that the penalty is justified when goods purchased with a declaration are not used for the declared purposes, emphasizing that the reasonableness of the cause must be evaluated based on the facts of each case. The Tribunal's decision to reduce the penalty is upheld based on the facts presented.

In conclusion, the court dismisses all questions raised by the assessee, affirming the liability for purchase tax, interest under section 11-B, and penalty under section 16(1)(k). The revision petition is deemed meritless and is dismissed without costs.