9911796707
TMI Blog1955 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... import tobacco from the State of Bombay in very large quantities after it is blended in that State by the vendors with. various other types of indigenous tobacco by an elaborate process. This finished tobacco, after its import within the State of Madhya Pradesh is rolled into bidis which are exported to various other States, largely to the State of Uttar Pradesh. The dealers in the State of Uttar Pradesh and such other States who buy bidis from the petitioners sell the same to various other dealers and consumers in those States. The Sales Tax Authorities in the State of Madhya Pradesh required the petitioners under threat of criminal prosecution to file a statement of return of the total purchases of tobacco made by them out of Madhya Pradesh and delivered to them in Madhya Pradesh with a view to assess and levy purchase tax on the transactions of purchases made by the petitioners as above. The petitioners filed under protest two returns dated the 11th September, 1954, and 3rd December, 1954, for the periods 3rd May, 1954, to 29th July, 1954, and 30th July, 1954, to 26th October, 1954, respectively but without prejudice to their right to challenge the validity of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factories, was cleaned, sieved and blended. A few more facts relevant for the decision of this petition may be stated in this context. Not only the petitioners but also the dealers in Bombay who sell or supply tobacco to the petitioners are registered as "dealers" for the purpose of the Central Provinces and Berar Sales Tax Act, 1947. The petitioners are the holders of a certificate of registration, No. LDG/53 obtained by them under rule 8 of the Central Provinces and Berar Sales Tax Rules, 1947. When making purchases of the tobacco in question they also made declarations in the form required by Rule 26(ii) declaring that they had purchased the said goods from Shri Shah Chhaganlal Ugarchand Nipani, a dealer holding registration certificate No. BMY/93/MP and from Shri Maniklal Chunanlal Baroda, a dealer holding registration certificate No. BMY/341-MP on different dates therein mentioned for use as raw material in the manufacture of goods for sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State. In the return which was filed by the petitioners for the quarter beginning from 3rd May, 1954, and ending with 29th July, 1954, the petitioners menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished tobacco which was supplied to the petitioners moved from the State of Bombay to the State of Madhya Pradesh and these transactions were, therefore, in the course of inter-State trade or commerce. The only answer which was made by the learned Advocate-General of Madhya Pradesh was that Shri Shah Chhaganlal Ugarchand Nipani and Shri Maniklal Chunanlal Baroda were themselves dealers holding registration certificates Nos. BMY/93/MP and BMY/341-MP being registered as such under the provisions of the Central Provinces and Berar Sales Tax Act, 1947, and that, therefore, the transactions were between two registered dealers in the State of Madhya Pradesh and therefore constituted purely internal sales of the goods. If they were thus internal sales there was no question of their being transactions in the course of inter-State trade or commerce and therefore they were not subject to the ban imposed under Article 286 (2). This answer suffers from oversimplification. No doubt, the dealers who supplied the finished tobacco to the petitioners were registered dealers under the Central Provinces and Berar Sales Tax Act, 1947, but that fact by itself would not be sufficient to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the question arises in regard to his liability to pay any tax under the Act, such liability would have to be determined in spite of his being a registered dealer with reference, inter alia, to the provisions of section 27-A of the Act which incorporates within its terms the bans which have been imposed on the powers of the State Legislatures to tax under Article 286(1)(a) and (2) of the Constitution. If, therefore, a dealer who has got himself registered as dealer under the provisions of section 8(1) of the Act is sought to be made liable in respect of transactions of sale effected by him he could claim exemption from such liability if the transactions of sale or purchase took place in the course of inter-State trade or commerce after the 31st March, 1951, except in so far as Parliament may by law otherwise provide. In the case before us there was no such provision made by Parliament and the transactions in question were all after the 31st March, 1951, with the result that the ban imposed by Article 286(2) was in operation and if the transactions took place in the course of inter-State trade or commerce not only were Shri Chhaganlal Ugarchand Nipani and Shri Maniklal Chunanlal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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