1995 (2) TMI 393 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Contravention of conditions/recitals of declaration in Form 14 under the Bombay Sales Tax Act, 1959.
2. Determination of whether the applicant was a 'manufacturer' of bus bodies or buses.

Issue-Wise Detailed Analysis:

1. Contravention of Conditions/Recitals of Declaration in Form 14:

The core issue revolves around whether the assessee, by purchasing bus bodies against declarations in Form 14 and subsequently selling complete buses, contravened the conditions of Form 14, thereby attracting purchase tax under section 14 of the Bombay Sales Tax Act, 1959. The assessee, a manufacturer of motor vehicle chassis, procured bus bodies from Ruby Coach Builders without paying sales tax by furnishing declarations in Form 14, which stipulates that the goods purchased must be resold.

The Sales Tax Officer contended that the assessee sold complete buses, not the bus bodies, thereby violating Form 14 conditions. The Assistant Commissioner and the Tribunal upheld this view, leading to the imposition of purchase tax on the assessee.

The assessee argued that the bus bodies were sold as part of the complete buses to fulfill an export order, thus complying with Form 14. However, the court found that the contract with the overseas buyer was for complete buses, not separate components. The bus bodies were merely parts of the buses sold, indicating a clear contravention of Form 14, as the assessee did not resell the bus bodies in their purchased form.

2. Determination of Whether the Applicant was a 'Manufacturer' of Bus Bodies or Buses:

The second issue was whether the assessee should be considered a manufacturer of bus bodies or complete buses. The court noted that the question as framed was vague and did not clearly address the underlying controversy. Given the court's finding on the first issue, it was deemed unnecessary to answer this question. The court concluded that the assessee did not resell the bus bodies but sold complete buses, making the distinction between manufacturing bus bodies or buses irrelevant for the purpose of this case.

Conclusion:

The court affirmed that the assessee contravened the conditions of Form 14 by not reselling the bus bodies and was liable to pay purchase tax under section 14 of the Act. The second question was left unanswered due to its vagueness and irrelevance in light of the court's findings on the first issue. The reference was answered in favor of the Revenue, with no order as to costs.