1996 (7) TMI 528 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of separate sale transactions
2. Validity of dealership agreement
3. Liability for sales tax on specific turnover
4. Applicability of precedent in determining liability
5. Classification of sales transactions under the Kerala General Sales Tax Act
6. Exclusion of turnover related to the sale of tempo vans in assessment

Analysis:

Issue 1:
The assessee contested the inference of separate sales between the petitioner and customers. The contention was that the transactions were inter-State sales by Bajaj Tempo Ltd. directly to individual customers. The petitioner acted as an agent for delivery only, not as a seller. The Government Pleader argued that the petitioner was an authorized dealer, and there were distinct transactions between Bajaj Tempo Ltd., the petitioner, and individual customers.

Issue 2:
The validity of the dealership agreement was questioned, specifically regarding the dealership of Matador four wheelers. The communication from Bajaj Tempo Ltd. recognized the petitioner as an authorized dealer, supporting the contention that there were two separate transactions: one between Bajaj Tempo Ltd. and the petitioner, and another between the petitioner and individual customers.

Issue 3:
The dispute centered on the liability to pay sales tax on a specific turnover of Rs. 2,51,489.96 related to the sale of five tempo vans. The Tribunal upheld the liability based on Explanation 5 to sub-section (xxi) of section 2 of the Kerala General Sales Tax Act, rejecting the petitioner's argument that the transactions were inter-State sales not subject to Kerala sales tax.

Issue 4:
The Tribunal applied the precedent of Alwaye Agencies case to determine the petitioner's liability. The petitioner argued that the decision was inapplicable or distinguishable. However, the Tribunal found the decision relevant, emphasizing the petitioner's role as a dealer and not just an agent, similar to the situation in the Alwaye Agencies case.

Issue 5:
The classification of sales transactions under the Kerala General Sales Tax Act was crucial. The Tribunal considered the relationship between Bajaj Tempo Ltd. and the petitioner, concluding that the petitioner's role extended beyond that of a mere agent, as evidenced by the dealership agreement and the handling of individual orders and deliveries.

Issue 6:
The petitioner sought to exclude the turnover related to the sale of tempo vans in the assessment for 1976-77. However, the Tribunal found no error in the assessment, emphasizing the petitioner's statutory liability under Explanation 5(a) of section 2(xxi) of the Kerala General Sales Tax Act, given the nature of the transactions and the petitioner's role as a dealer.

In conclusion, the High Court dismissed the petition, upholding the Tribunal's decision regarding the liability for sales tax on the turnover related to the sale of tempo vans. The judgment emphasized the petitioner's role as an authorized dealer and rejected the argument that the transactions were inter-State sales exempt from Kerala sales tax.