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TMI Blog1981 (4) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... al Sales Tax Act is actually payable by him on account of any deductions admissible under any of the provisions of that Act, then such dealer shall be liable to pay tax on the purchase price of the goods purchased under such certificate. The deliberate alteration of the definition of "taxable goods" in the Act also is attributable to the said intention of the State Legislature. - Civil Appeal No. 1185, & 1187 of 1979, S.T.R. No. 24 of 1978, & 11 of 1977 - - - Dated:- 7-4-1981 - PATHAK R.S. AND VENKATARAMIAH E.S. JJ. S.T. Desai, Senior Advocate (M.N. Shoff. Advocate, with him), for the respondent (in both the appeals.) K.H. Kaji, T. Sridharam, R.D. Pathak, Miss C. K. Sucharita and Mrs. S. Bhandare, Advocates, for the appellant (in both the appeals). -------------------------------------------------- The judgment of the Court was delivered by VENKATARAMIAH, J.- Since a common question of law is involved in these two appeals by special leave, they are disposed of by this common judgment. The appellant in Civil Appeal No. 1185 of 1979 is M/s. Hindustan Brown Boveri Ltd., a company engaged in the business of manufacturing certain goods which are used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1969." The appellant in Civil Appeal No. 1187 of 1979 is M/s. Elecon Engineering Co. Ltd. which is engaged in manufacturing heavy machinery and gear conveyors. It is also a recognised dealer under the Act. Like the appellant in Civil Appeal in 1185 of 1979, this appellant also purchased raw materials by furnishing certificates in form No. 19 and later on sold a part of the goods manufactured by it to a certain electrical undertaking against form No. C and claimed exemption under the notification issued under section 49(2) of the Act. In this case also the Sales Tax Officer levied purchase tax under section 16 of the Act for violation of the undertaking given in form No. 19. The appeals to the Assistant Commissioner of Sales Tax and the Gujarat Sales Tax Tribunal failed. Thereafter at the instance of the appellant, the Gujarat Sales Tax Tribunal referred the following question for the opinion of the High Court of Gujarat: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the sales of machineries and conveyors manufactured by the applicant to an electrical undertaking against form C under entry 5 of the Government notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on goods in Schedule II, Part A.- There shall be levied a sales tax on the turnover of sales of goods specified in Part A of Schedule II at the rate set out against each of them in column 3 thereof, but after deducting from such turnover,- (i) resales of goods on the purchase of which the dealer is liable to pay purchase tax under section 16; (ii) resales of goods purchased by him from a registered dealer; (iii) sales of goods or resales of goods to which clauses (i) and (ii) do not apply, to a recognised dealer or to a commission agent holding a permit who purchases on behalf of a principal who is a recognised dealer, upon such dealer or commission agent, as the case may be, furnishing in the circumstances and subject to the conditions specified in sub-clause (B) and item (ii) of sub-clause (C) of sub-section (1) of section 13, a certificate as provided therein; and (iv) sales of goods or resales of goods to which clauses (i) and (ii) do not apply, to a licensed dealer or to a commission agent holding a permit who purchases on behalf of a principal who is a licensed dealer, upon such dealer or commission agent, as the case may be, furnishing in the circumstances and subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified in item (i) of sub-clause (A) and item (i)(a) of sub-clause (C) of sub-section (1) of section 13, a certificate as provided therein. (2) There shall be levied a general sales tax on the turnover of sales of goods specified in Schedule III at the rate set out against each of such goods in column 4 thereof, but after deducting from such turnover,- (i) resales of goods purchased from a registered dealer, by a dealer who is not a licensed dealer at the time of such purchase; and (ii) sales of goods or resales of goods to which clause (i) does not apply to a licensed dealer, or recognised dealer or a commission agent holding a permit who purchases on behalf of a principal who is a licensed dealer or a recognised dealer upon such dealer or commission agent, as the case may be, furnishing in the circumstances and subject to the conditions specified in section 13, a certificate as provided therein." It may be noted that in the above provisions that from the turnover of sales of goods of a dealer which are otherwise taxable, the turnover of goods sold to a recognised dealer, upon such recognised dealer furnishing in the circum- stances and subject to the conditions speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49(2) reads: "49. Exemptions. -(1)...................... (2) Subject to such conditions as it may impose, the State Government may, if it considers it necessary so to do in the public interest, by notification in the official Gazette, exempt any specified class of sales or purchases from payment of the whole or any part of any tax payable under the provisions of this Act." By a notication dated April 29, 1970, issued under section 49(2) of the Act, the State Government exempted the entire tax payable on sales of goods (other than prohibited goods) by a registered dealer to an electrical undertaking, certified for the purpose by the Commissioner, if the electrical undertaking furnished to the selling dealer a certificate in form appended to the notification stating inter alia that the goods purchased were required for the use of the generation or distribution of electrical energy by the undertaking. In view of the above notification the sales made to the electrical undertaking become exempt from payment of sales tax under the Act on the undertaking furnishing the required certificate and no tax was paid by the appellants in these two appeals on sales of goods effected by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red dealers against certificates issued by them in form No. 19; that no sales tax had been paid on the sales in their favour; that they had manufactured goods by using the said raw materials; that they had sold a part of the goods to an electrical undertaking notified under section 49(2) of the Act and that no tax had been paid on sales effected by them in favour of the electrical undertaking. It is also not disputed that in form No. 19 the appellants had stated that the raw materials purchased by them would be used to manufacture taxable goods which would be sold inside the State of Gujarat. The question for consideration is whether the appellants had used the raw materials for another purpose contrary to the terms of form No. 19. The contention of the department is that the appellants had contravened form No. 19 by manufacturing goods which were not "taxable goods" and hence were liable to pay purchase tax on the purchase of raw materials under section 16 of the Act and the contention of the appellants is that the goods manufactured and sold by them to the electrical undertakings were "taxable goods" and merely because they were sold to an electrical undertaking under transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case is governed by the definition of the expression "taxable goods" in section 2(33) of the Act. It is interesting to note that the Bombay Sales Tax Act, 1959 (Bombay Act No. 1 of 1959), which was in force in the State of Gujarat before the Act came into force and which was repealed by section 88 of the Act contained the definition of the expression "taxable goods " in section 2(33) thereof. The expression "taxable goods" was defined in the Bombay Act as "goods other than those on the sale or purchase of which no tax is payable under section 5". In the Bombay Act there was also a provision corresponding to section 49 of the Act in section 41 thereof which empowered the State Government subject to such conditions as it may impose to exempt by a notification published in the official Gazette any specified class of sales or purchases from payment of the whole or any part of any tax payable thereunder if the State Government was satisfied that it was necessary so to do in the public interest. Still the definition of "taxable goods" in that Act did not refer to sales exempted under section 41 thereof. But in the Act which repealed and replaced the Bombay Act the meaning of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a certificate given by him under section 12 or section 13 of the Act and contrary to such certificate the goods are used for another purpose or are not resold or despatched in the manner and within the period certified or on the resales in the course of inter-State trade or commerce, of the goods so purchased no tax under the Central Sales Tax Act is actually payable by him on account of any deductions admissible under any of the provisions of that Act, then such dealer shall be liable to pay tax on the purchase price of the goods purchased under such certificate. The deliberate alteration of the definition of "taxable goods" in the Act also is attributable to the said intention of the State Legislature. The appellants also cannot derive any assistance from the decision of this Court in Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax [1978] 41 S.T.C. 409 (S.C.)., as these cases are governed by the provisions of the Act and as there appears to be no similarity between the facts of these appeals and the facts involved in that case. For the foregoing reasons, we do not find any merit in these appeals. The appeals are dismissed with costs. Hearing fee one s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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