9911796707
TMI Blog1963 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... carried an appeal to the Deputy Commissioner of Commercial Taxes. This appeal was not successful. The further appeal to the Sales Tax Appellate Tribunal did not bear any fruit. The Tribunal also set aside the order of the assessing authority allowing exemption in respect of sales to Amarchand aggregating to Rs. 3,61,663 with the qualification indicated above and remitted the case to the Commercial Tax Officer with the following observations: "The assessing authority should first examine all the facts of the case, books of account and documents in evidence produced before him, make consequential enquiries and then pass proper and reasonable orders of assessment." It is this order of the Sales Tax Appellate Tribunal that is the subject-matter of revision here. In this revision, the learned counsel for the assessee challenges the conclusions of the Tribunal on all the issues. Three items of turnover are in dispute in this revision case and we will deal with them seriatim. The first relates to Rs. 2,27,460 being the purchase value of the cotton sold to the Anglo-French Textile Mills Ltd., Pondicherry. The facts bearing on these sales are these. The assessee negotiated the bargain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description of goods. Point of levy. Rate of tax. Cotton, that is to say, all kinds of cotton(indigenous or imported) in its unmanufactured state, whether ginned or unginned, baled, pressed or otherwise, but not including cotton waste. When purchased by a spinning mill in the State at the point of purchase by the spining mill and in all other cases at the point of purchase by the last dealer who buys it in the State. 2 naya paise in the rupee. Indisputably, the turnover in this case pertains to this item and it falls within the latter half of the second column of that item, namely, "the last dealer who buys it in the State." The short question for consideration is as to who is the last dealer who purchased the goods in the State. Sri Kuppuswamy, learned counsel for the petitioner, contends that it is the Anglo-French Textile Mills Ltd., Pondicherry, and not the petitioner that is the last dealer within the contemplation of the clause in question, since all the elements of an intra-State sale exist in regard to sales effected by the petitioner to the Pondicherry Mills and no part of the sales having occurred outside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation." We need not extract clause (b), as it is not material here. The argument based upon the language of these sections is that as the cotton purchased by the petitioner and sold to the Pondicherry Mills was within the State of Andhra Pradesh at the time it was appropriated to the contract, there was a concluded sale within the State of Andhra Pradesh, and, consequently, the last dealer was the buyer, i.e., the Pondicherry Mills, who bought it in the State, and therefore, the petitioner could not be treated as the last dealer from whom purchase tax could be collected. There are certain obstacles in the way of accepting this proposition. It is true that the situs of the sale could be located in Andhra Pradesh having regard to the terms of Explanation II but that is not determinative of the matter. To find an answer to the question posed in this case, we have first to determine the nature of the sale in the light of the other provisions of both the Andhra P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery should be effected outside the State. If delivery is made outside the State under a covenant or as an incident of contract of sale, the sale is said to have occasioned the export. Applying that principle, there can (1)[1963] 14 S.T.C. 188. (2)[1961] 12 S.T.C. 765. be little doubt that in the instant case the sale has occasioned the export. It is not disputed that one of the essential conditions of the contract was that the delivery should be given at the railway siding of Pondicherry, i.e., outside the State. If that were so, it is a sale attracted by section 5 of the Central Sales Tax Act, 1956. The proposition that export sales are not exigible to State tax is not contested. But what is urged by Sri Kuppuswami, learned counsel for the petitioner, is that the fact that the sales took place in the course of export cannot fasten liability on the petitioner, as these are clearly cases governed by section 4 of the Central Sales Tax Act, 1956, which means that the last dealer is not the assessee. We do not think that section 4 really comes to the rescue of the petitioner. The terms of section 4 discloses that the purpose was to formulate the principles for determining when a sale t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the petitioner, contends that section 4 is not subservient to section 5 as in the case of section 3 but that section 4 has an independent operation and that if the situs of the sale is within the State of Andhra Pradesh there is no scope for invoking section 5. We must demur to this proposition. As we have already stated, section 4 is concerned only with sales outside the State and not concerned with the export or import sales. That apart, as observed by Das, C.J., in Bengal Immunity Co., Ltd. v. State of Bihar(1), "the situs of a sale or purchase is wholly irrelevant as regards its inter-State character." His Lordship added: "Now, even when the situs of a sale or purchase is in fact inside a State, with no essential ingredient taking place outside, nevertheless, if it takes place in the course of inter-State trade or commerce, it will be hit by clause (2). If the sales or purchases are in the course of inter-State trade or commerce the stream of inter-State trade or commerce will catch up in its vortex all such sales or purchases which take place in its course wherever the situs of the sales or purchases may be..........." It is true that these remarks are made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to this argument. Undoubtedly, cotton and cotton seeds are two different and distinct commodities. It is true that in their original state cotton seeds were part of the cotton kapas but after the cotton was ginned and pressed into bales and the seeds separated, they could no longer be regarded as part of cotton and as forming part of the same commodity. That being so, there is no scope for invoking the doctrine of double taxation. The claim in this behalf was rightly rejected. We then come to the claim founded on rule 6(1)(j) of the Andhra Pradesh General Sales Tax Rules. The amount involved in the claim bearing on this rule covers sales of inter-State character for the period 1st April, 1958, to 30th September, 1959. In regard to this turnover, what is urged by the learned counsel for the assessee is that since sales tax was paid under the Central Sales Tax Act, 1956, the assessee is entitled to have it deducted from his purchase turnover, without including it in the gross turnover. Before we refer to rule 6 around which the controversy revolves on this aspect of the matter, we will do well to state here that the objection that was preferred by the assessee was formulated alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied on the net turnover of a dealer. In determining the net turnover, the amounts specified in clauses (a) to (1) shall, subject to the conditions specified therein, be deducted from the total turnover of a dealer- * * * * (j) all amounts for which goods sold are liable to tax under the Central Sales Tax Act, 1956." "Total turnover" is defined in section 2(r) of the Act thus: "'Total turnover' means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole, or any portion of such turnover, is liable to tax." The argument of Sri Kuppuswamy on the basis of this rule is two-fold, namely, (i) that in order to claim a deduction it is not necessary for an assessee to include the sales in the gross turnover and (ii) that the turnover contemplated by the rule relates only to purchase and do not take in sales. We find it difficult to accede to this theory. The very language of rule 6 indicates that the total turnover should consist of all the transactions whether they be subjected to tax under the Central Act or whether they be exempted from tax. That this is so is clear from the expressions "shall be levied on the net turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not within the competence of the Tribunal to disturb that order when it had become final by reason of the department having accepted it without filing any appeal. The answer to this contention depends upon the interpretation we give to section 21(4) of the Andhra Pradesh General Sales Tax Act, 1957, from which the Tribunal derives its power. It says: "(4)(a) The Appellate Tribunal may, after giving both parties to the appeal, a reasonable opportunity of being heard- (i) confirm, reduce, enhance or annul the assessment or the penalty or both; or (ii) set aside the assessment or the penalty, or both, and direct the assessing authority to pass a fresh order after such further enquiry as may be directed; or (iii) pass such other orders as it may think fit." We are unconcerned with the other provisions of this sub-section and so they need not be extracted here. As already mentioned, the Commercial Tax Officer without deciding whether the turnover in question was subjected to tax under the Central Sales Tax Act and whether it was paid by Jesraj Amarchand, straightway gave relief to the assessee with the rider "subject to verification of claim and payment of tax by buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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