1993 (9) TMI 321 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of provisions regarding resale of goods with declaration forms to avoid tax.
2. Determination of whether concessional rate falls under the definition of "full rate" for tax purposes.

Analysis:
The case involved a revision petition challenging an order of the Rajasthan Sales Tax Tribunal regarding the resale of goods purchased with declaration forms to avoid tax and the applicability of concessional rates as the "full rate" for tax purposes. The assessee, a dealer, purchased goods against declaration forms for resale to other manufacturers. The assessing authority found that the assessee resold the goods at concessional rates to other manufacturers, leading to a tax dispute. The Deputy Commissioner considered the relevant notifications and rules, concluding that the assessee was entitled to sell at concessional rates under specific sections of the Act. The Tribunal upheld the assessing authority's decision.

Upon review, the Court analyzed the provisions of sections 5C and 5CC, noting their overriding effect and the prescribed special tax rates for manufacturers fulfilling specific conditions. The Court highlighted that the concessional rates were applicable to manufacturers establishing new industries after certain years. It emphasized that tax is usually payable at the first point unless otherwise notified. In this case, the notification shifted the tax point from the manufacturer to a second dealer, allowing sales at concessional rates. The Court determined that the sale by the assessee to manufacturers at concessional rates aligned with the law, as the rates under sections 5C and 5CC were considered the "full rate" as per the notification. It clarified that the prescribed rates by the Legislature or delegated authority constituted the full rate for tax purposes.

Ultimately, the Court dismissed the revision petition, stating that the provisions of sections 5C and 5CC had an overriding effect on other provisions. It concluded that the sales made by the assessee to manufacturers at concessional rates were in accordance with the law, as per the notification and relevant provisions. The Court found no grounds for interference in the Tribunal's order, thereby upholding the decision.

In summary, the Court's judgment clarified the interpretation of provisions related to resale of goods with declaration forms to avoid tax and affirmed that the concessional rates fell under the definition of "full rate" for tax purposes in the specific context of the case.