9911796707
TMI Blog1955 (7) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Tax Officer determined the turnover of the assessee at Rs. 3,62,668-9-10. The assessing authority also added a sum of Rs. 11,476 calculating the gross profit at 6 per cent since the margin of profit of 3.5 per cent shown by the assessee was too low. An appeal preferred by the assessee to the Commercial Tax Officer was dismissed. "The assessee preferred an appeal to the Sales Tax Appellate Tribunal at Madras. The Tribunal directed the deletion of Rs. 32,128 from the taxable turnover and allowed the appeal to that extent. Mr. C.V. Dikshitulu, learned counsel for the petitioners, has raised four points before us: (1) that the groundnut kernel purchased by the assessee within the Province and exported to Calcutta is exempt from tax in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce: Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, be continued to be levied until the thirty-first day of March, 1951." The interpretation of this Article has been the subject-matter of controversy both in the Supreme Court and in the several High Courts of India. The Supreme Court has laid down t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction. But the fact that the goods have been delivered for consumption within a particular State should be established by evidence. It is not enough, to attract that Explanation, that the goods purchased in one State have ultimately reached a different State where they were utilised for consumption in that State. It is necessary to prove that the delivery for consumption was the direct result of the sale or the purchase as the case may be. If the goods were sold and delivery effected to the buyers in a particular State, the mere fact that subsequently the buyer took the goods to another State for purpose of consumption, could not affect the liability of the goods for sales tax in the State where delivery was effected as in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansit, the purchase cannot be deemed to be in the course of inter-State trade or commerce because both the seller and the purchaser are merchants of this State and that the delivery at a place outside the State is not the direct result of the sale. The word "course" etymologically denotes "movement from one place to another", and the expression "in the course of" not only implies a period of time during which the movement is in progress but postulates also a connected relation. The sale of a trader in one State to a user in another State would be a sale in the course of inter-State trade, according to the natural meaning of those words. As has been pointed out by their Lordships of the Supreme Court, Article 286(1)(a) read with the Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % shown by the accounts. This estimation was felt necessary since the appellant had not brought many of the purchases shown by the boat and railway ex- tracts in the regular accounts. We are of the opinion that the adop- tion of gross profit of 6% is not too high as contended by the appellants. We therefore confirm the addition of this turnover." It is not clear from any of these orders on what material this esti- mate of profit is based. If the estimate of profit is made on the basis of profit earned by similar trades, similarly situated and circumstanced, then it is the duty of the assessing authority to intimate the assessee that the profit earned in trades similarly situated and circumstanced is so much and give an opportunity to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even so, the petitioner's counsel contends that no attempt has been made to connect the boat extracts with the petitioner. The petitioner has not let in any evidence to prove that the stocks so received by him have been returned to the *Since reported at page 151 supra. owners. We hold that in the absence of such proof, the assessing authority was justified in assuming that these stocks must have been received and sold by the petitioner. This contention on behalf of the petitioner must, therefore, be rejected. In the result, we remit the Tax Revision Case to the Appellate Tribunal to give an opportunity to the petitioner to adduce evidence as to whether the purchase of the railway receipts sought to be charged to tax falls within the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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