2004 (12) TMI 653 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of sales tax concession scheme under the Assam General Sales Tax Act, 1993.
2. Exemption eligibility for manufacturers under the scheme.
3. Tax liability on subsequent sales by a party not eligible for exemption.

Analysis:
The case involved a dispute regarding the assessment of sales tax on transactions involving the purchase and subsequent sale of tea within the State of Assam during the assessment years 1994-95 and 1996-97. The appellant No. 2 was eligible for a sales tax concession under the Assam Industries (Sales Tax Concessions) Scheme, 1995, exempting goods sold by eligible units from sales tax. However, the appellant No. 1, who purchased tea from appellant No. 2 and made subsequent sales, was not eligible for exemption under the scheme. The authority levied tax on the subsequent sales by appellant No. 1, leading to a challenge in revision proceedings and a subsequent writ petition.

The High Court emphasized that the exemption under the concession scheme applied to sales made by eligible manufacturers, not the goods themselves. As the appellant No. 1 did not have eligibility for exemption, the subsequent sales made by them were deemed liable for tax. The Court rejected the argument that goods themselves should be entitled to exemption at all stages, highlighting the manufacturer's eligibility as the determining factor. The Court also dismissed reliance on previous apex court decisions, stating they did not assist the appellant's case.

Ultimately, the High Court found no merit in the appeal and dismissed it with costs amounting to Rs. 5,000. The decision upheld the tax liability on subsequent sales by a party not eligible for exemption under the sales tax concession scheme, emphasizing the manufacturer's eligibility as the key criterion for exemption under the scheme.