2001 (10) TMI 1130 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of sub-section (2-A) of section 20 of the Andhra Pradesh General Sales Tax Act, 1957.
2. Whether the transactions in question were branch transfers or inter-State sales.
3. Applicability of the principle of res judicata in sales tax matters.

Summary:

1. Interpretation of sub-section (2-A) of section 20 of the Andhra Pradesh General Sales Tax Act, 1957:
The court examined the scope of sub-section (2-A) of section 20 of the Act, which restricts the revisional power of the Commissioner of Commercial Taxes. The court held that sub-section (2-A) creates a clear and unambiguous bar against revising any issue or question that has already been decided by the Appellate Tribunal u/s 21. The court emphasized that judicial and administrative discipline demands that inferior authorities must act in accordance with the decisions of superior authorities.

2. Whether the transactions in question were branch transfers or inter-State sales:
The assessing authority initially treated the turnovers as inter-State sales, but the Appellate Deputy Commissioner, relying on the Tribunal's order, classified them as branch transfers, thus not exigible to tax under the CST Act. The Commissioner of Commercial Taxes issued show cause notices to revise these orders, claiming that the so-called branch transfers were cover-ups for actual inter-State sales. However, the court found that the Tribunal's decision on this matter was final and could not be revisited by the Commissioner.

3. Applicability of the principle of res judicata in sales tax matters:
The court discussed the principle of res judicata and its applicability in sales tax matters. It referred to previous judgments, including the Full Bench decision in State of Andhra v. Arisetty Sriramulu and the apex court's decision in Instalment Supply (Private) Ltd. v. Union of India, which held that each year's assessment is distinct and does not operate as res judicata for subsequent years. However, the court clarified that sub-section (2-A) of section 20 does not incorporate the principle of res judicata but creates a statutory bar against revising issues already decided by the Tribunal.

Conclusion:
The court overruled the decision in Minerals and Metals Trading Corporation of India Limited v. Deputy Commissioner, Commercial Taxes [1978] 42 STC 372, stating it did not lay down the correct law. The impugned notices dated March 17, 1996, issued by the Commissioner of Commercial Taxes were quashed, and the writ petitions were allowed.