1996 (2) TMI 489 - HC - VAT and Sales Tax

Issues Involved:

1. Quashing of assessments made under the Central Sales Tax Act.
2. Jurisdiction and authority of Andhra Pradesh sales tax authorities to assess and collect CST.
3. Direction for refund or transfer of CST collected by other states.
4. Territorial jurisdiction of Andhra Pradesh High Court to issue directions to other states.

Detailed Analysis:

1. Quashing of Assessments Made Under the Central Sales Tax Act:

Bharat Heavy Electricals Limited (BHEL) sought a writ of certiorari to quash the assessments made under the Central Sales Tax Act by the Commercial Tax Officer, Sangareddy, Medak district, for the assessment years 1977-78 to 1980-81 and the provisional assessments for the years 1983-84 to 1985-86. The Court noted an obvious mistake in the prayer in certain writ petitions, where the petitioner was actually aggrieved by revised assessments made by the Deputy Commissioner (Commercial Taxes), Nizamabad, not by the Commercial Tax Officer. The Court pointed out discrepancies between the prayers in the writ petitions and the affidavits filed in support of them. The affidavits sought to quash the common order of the Sales Tax Appellate Tribunal dated July 19, 1989, and to declare that Andhra Pradesh sales tax authorities had no jurisdiction over inter-division stock transfers by BHEL's Hyderabad unit. The Court upheld the Tribunal's orders, agreeing that the component parts and equipment sent directly to inter-State customers by BHEL's Hyderabad unit were inter-State sales under Section 3(a) of the Central Sales Tax Act, and Andhra Pradesh authorities were competent to collect tax on these transactions.

2. Jurisdiction and Authority of Andhra Pradesh Sales Tax Authorities to Assess and Collect CST:

The Court found that the Andhra Pradesh sales tax authorities had jurisdiction to assess and collect CST on inter-State transactions involving goods sent directly to customers by BHEL's Hyderabad unit. The Tribunal had granted relief for materials sent on stock transfer to executing units in other states, where the materials lost their identity before being dispatched to inter-State customers. The Court confirmed this view and dismissed the writ petitions seeking to quash the Tribunal's common order or to declare that Andhra Pradesh authorities lacked jurisdiction.

3. Direction for Refund or Transfer of CST Collected by Other States:

The Court considered whether to direct Tamil Nadu, Uttar Pradesh, Karnataka, and Madhya Pradesh to transfer CST collected on goods moved from BHEL's Hyderabad unit to inter-State customers. The Court recognized that the collection of CST by other states was illegal and contrary to Section 9 of the Central Sales Tax Act and Article 269(1) of the Constitution. However, the Court refrained from issuing such directions for several reasons:
- The Supreme Court was still seized of the matter and had granted a general direction to the states not to insist on CST payment if BHEL proved CST had already been paid to one state.
- The Court would need to declare assessments in other states null and void, but no such assessments or details were before it.
- The Court lacked territorial jurisdiction to issue a mandate to sales tax authorities of other states.

4. Territorial Jurisdiction of Andhra Pradesh High Court to Issue Directions to Other States:

The Court discussed the territorial jurisdiction issue, noting that for it to issue directions to other states, a part of the cause of action must arise within Andhra Pradesh. The Court found that the facts constituting the cause of action for refund or transfer of CST collected by other states did not form an integral part of the cause of action in Andhra Pradesh. The Court cited the Supreme Court's decision in Oil & Natural Gas Commission v. Utpal Kumar Basu, emphasizing that the facts alleged must form an integral part of the cause of action. The Court concluded that it could not issue binding directions to sales tax authorities of other states regarding refund or transfer of CST.

Conclusion:

The Court dismissed the writ petitions, noting that the Supreme Court would be the appropriate forum to decide on the nature of directions to be granted to various states. The Court did not issue any directions for refund or transfer of CST collected by other states, as it lacked territorial jurisdiction and the necessary details of assessments were not before it. The writ petitions were dismissed with no costs.

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