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1959 (12) TMI 24 - HC - VAT and Sales Tax
Issues:
Interpretation of section 5(vii) of the Madras General Sales Tax Act regarding the taxation of sales of beedi and beedi tobacco in the State of Madras. Detailed Analysis: The revision petitioner, engaged in the business of buying and selling beedies, contested the assessment for the year 1955-56, where the Deputy Commercial Tax Officer disagreed with the reported turnover and estimated a taxable turnover. The petitioner objected to the assessment on two grounds: firstly, that sales of beedi were not first sales in the State of Madras and thus not governed by section 5(vii) of the Act, and secondly, regarding the inclusion of purchase turnover of raw tobacco. The Deputy Commercial Tax Officer partially accepted the objections and revised the taxable turnover. The Commercial Tax Officer partially allowed the appeal but refixed the turnover, leading to an appeal before the Tribunal, which was dismissed. The main issue raised in the revision petition was whether the sales by the petitioner are liable to be assessed under section 5(vii) of the Madras General Sales Tax Act. The petitioner argued that the taxing authorities misinterpreted the term "first" sales in the clause, contending that the use of "first" with "sale" was redundant as there cannot be multiple first sales by a single dealer. The court examined the clause of section 5(vii) before and after the amendment by Act 13 of 1955, which added specific words regarding the taxation point for sales in the State of Madras. The court held that the word "first" in the clause serves to distinguish the sale liable to tax from other sales of the same goods by different persons. It clarified that the first sale must occur within the State of Madras, by a dealer not exempted from taxation under the Act. The court rejected the petitioner's argument that the word "first" was superfluous and concluded that all conditions for taxation were met in the petitioner's case, upholding the assessment. In conclusion, the court dismissed the revision petition, affirming that the sales by the petitioner were liable to be assessed under section 5(vii) of the Madras General Sales Tax Act. The court also ordered the petitioner to pay costs of Rs. 50.
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