1967 (7) TMI 133 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of inter-State sales turnover, jurisdiction of appropriate State under Central Sales Tax Act, conflicting assessments by different States, filing of declarations in Form C, verification of assessments by authorities in different States.

Analysis:
1. The judgment deals with a case involving the assessment of inter-State sales turnover for the assessment year 1958-59. The assessee was a registered dealer in both Kerala and Madras states, engaged in the business of arecanut seeval. The turnover in question amounted to &8377; 80,615, part of which was considered inter-State sales. The revenue authorities contended that since the assessee did not file declarations in Form C, the turnover was liable to be taxed at 7 per cent under Section 8(2) of the Central Act. The Tribunal upheld this view, stating that the appropriate State for taxation was Madras, not Kerala, where the turnover was previously taxed. The Appellate Assistant Commissioner suggested that the assessee could have filed duplicate C Forms before the assessing authority in Madras. However, conflicting interpretations by different states' authorities led to double taxation on identical transactions.

2. The appellant argued that once a turnover is taxed in one state under the Central Sales Tax Act, another state cannot levy a second tax on the same turnover. The definition of "appropriate State" and amendments to Section 9(1) were cited to support this argument. However, the court held that while there can only be one charge on identical inter-State turnover under the Act, the levy and collection must be done by the appropriate State, i.e., the state from which the goods moved. The court emphasized the importance of fulfilling conditions like filing Form C declarations for concessional rates under Section 8(4) and the assignment of tax proceeds to the appropriate State.

3. The judgment highlighted the need for authorities in conflicting assessment situations to verify if C Forms were filed in another state before assessing the turnover. Article 261 of the Constitution mandates giving full faith and credit to public acts and records throughout India. The court stressed that assessing authorities should cooperate and verify information to prevent double taxation. In this case, the assessing authority in Madras failed to verify if C Forms were filed in Kerala, leading to an incorrect assessment.

4. The court set aside the assessment to the extent of a turnover of &8377; 27,755.58, instructing the assessing officer to verify if C Forms were filed in Kerala, covering this turnover. If the forms were in order and related to the turnover in question, the assessing officer should tax it at the concessional rate. The judgment highlighted the importance of cooperation between state authorities to prevent double taxation and ensure fair assessments in inter-State transactions.