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TMI Blog1976 (10) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ased by the appellant had been paid by those manufacturers and dealers. The inter- State sales of yarn made by the appellant were assessed to tax under the Central Sales Tax Act (hereinafter referred to as the Central Act) in the hands of the appellant. The appellant claimed refund of the tax amounting to Rs. 16,769.96 paid under the State Act in respect of the yarn sold by it in the course of inter-State trade in accordance with section 15(b) of the Central Act and the proviso to section 4 of the State Act read with rule 23 of the Tamil Nadu General Sales Tax Rules, as these provisions stood at the relevant time. The Additional Commercial Taxation Officer admitted the claim of the appellant for refund of the tax only in respect of the sum of Rs. 5,562.59 and rejected the claim in respect of the balance. On appeal the Additional Appellate Assistant Commissioner allowed refund of a further sum of Rs. 3,204.73 and rejected the claim regarding the balance of Rs. 8,002.64. On second appeal the Appellate Tribunal relying upon the decision of the Madras High Court in M.A. Khader & Co. v. Deputy Commercial Tax Officer(1) rejected the claim of the appellant for the balance of Rs. 8,002.64. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of declared goods and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be prescribed." According to the Second Schedule to the State Act, the tax on cotton yarn but excluding cotton yarn waste shall be one per cent at the point of the first sale in the State. Clauses (1) to (3) of rule 23 of the Madras General Sales Tax Rules, 1959, read as under: "23. (1) The tax levied under section 4 in respect of the sale or purchase inside the State of any goods specified therein shall, if such goods are sold in the course of inter-State trade or commerce, be refunded in the manner and subject to the conditions prescribed in this rule to the dealer who has made the inter-State sale and has paid the tax under the Central Sales Tax Act, 1956, in respect of such sale. (2) Every such dealer who claims a refund under this rule, shall, within the time allowed in sub-rule (3), submit to the assessing authority a statement in form A-4. (3) The statement referred to in sub-rule (2) shall be submitted to the assessing authority not later than three months from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd such goods are sold in the course of inter-State trade or commerce, the amount of tax shall be refunded to such person in such manner and subject to such conditions as may be prescribed. In pursuance of this proviso, the State Government has framed rule 23 of the Madras General Sales Tax Rules, 1959. According to clause (1) of that rule, the refund of the sales tax has to be made to the dealer who makes the inter-State sale and who has paid the sales tax under the Central Act in respect of such sale. Clause (3) of the rule provides that statement shall be submitted to the assessing authority by the aforesaid dealer not later than three months from the date on which the dealer pays the tax under the Central Act. It may be stated that the Madras General Sales Tax Rules, 1959, had to be placed on the table of both the Houses of the State Legislature under sub-section (5) of section 53 of the State Act. In the face of clause (b) of section 15 of the Central Act, the proviso to section 4 of the State Act and rule 23 of the Madras General Sales Tax Rules, we have no doubt in our mind that it is the appellant who is entitled to get the refund of the sales tax levied under the State Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomaly in paying the amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter- State trade, even though he did not himself pay the tax under the State Act in respect of those goods. The reason for that is that the price charged from such dealer by the person from whom he purchases the goods would normally take into account the sales tax paid by the seller. Assuming that there was some ambiguity in the language of clause (b) of section 15, as it existed at the relevant time, the matter is made clear by the amendment made in the Central Act by the Central Sales Tax (Amendment) Act, 1972 (Act No. 61 of 1972). As a result of the amendment, clause (b) of section 15 of the Central Act reads as under: "(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter-State trade or comme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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