9911796707
TMI Blog1980 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... ime is exigible to purchase tax under section 7 of the Act?" 2.. The applicant carries on business in grains and is a dealer registered under the M.P. General Sales Tax Act. During the assessment year 1968-69, the dealer purchased wheat and juwar from unregistered dealers and supplied to the Food Corporation of India under the Levy Orders in pursuance of a scheme "procurement of wheat and/or juwar". In accordance with the view prevailing at the time of assessment, such sales under the Levy Orders were not treated as sales and the amount of turnover in respect thereof was deducted from the taxable turnover of the dealers. The assessing authority allowed the deduction on the turnover of sales made to the Food Corporation of India. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the unregistered dealers which was supplied to the Food Corporation of India under the Levy Orders was not exigible to purchase tax and that the turnover could not be said to have escaped assessment. The contentions did not prevail before the first appellate authority and a second appeal before the Board of Revenue was preferred. It was contended that section 19(1) of the Act was provided to meet the cases where the turn. over had escaped assessment. When the assessee had been assessed for the first time, the Sales Tax Officer was clearly of the opinion that the sale to the Food Corporation of the grain under the Levy Orders could not be taxed as the transaction was not a "sale" within the meaning of the Act and, therefore, no such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empted under some provision of the Act or even under the Government instructions. Therefore, when the Sales Tax Officer first assessed the dealer he merely considered whether the turnover of supplies to the Food Corporation of India be taxed or not, and relying on the New India Sugar Mills' case[1963] 14 S.T.C. 316 (S.C.); A.I.R. 1963 S.C. 1207. and the Andhra Sugars' case(1) came to the conclusion that the supplies to the Food Corporation of India were not sales within the meaning of Sales Tax Act and, therefore, could not be taxed. The question whether the transaction would attract levy of purchase tax was lost sight of. 5.. Now, section 19(1) does not give power to the assessing authority to reopen the case in the sense that he can reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. The expression "to reopen" would convey a revision of the whole assessment which, of course, was not permitted under section 19. 6.. At the time the assessment was made the Government had issued certain letters to various persons indicating that no tax would be charged on sales made to the Food Corporation of India when supplies were made under the Procurement and Levy Orders. These letters had absolutely no binding effect as they were not notifications made under section 12 of the M.P. General Sales Tax Act. Shri Sahastrabuddhe, the learned counsel for the applicant, fairly stated that at no point it had been the stand of the dealer that the supplies made to the Food Corporation of India under the Levy Orders were, in fact, sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the sale price of such goods under section 6." We are not concerned with the proviso and other clauses of this section. The expression "disposes of such goods in any manner other than by way of sale" is intended to be wide enough to cover the disposal of goods in a variety of ways which do not amount to "sale" within the definition of the Sale of Goods Act. In the instant case, the supplies made to the Food Corporation of India were not considered to be "sales" within the definition of the M.P. General Sales Tax Act and, therefore, section 7 was attracted. We have already stated before that no arguments could be addressed in this case that the transaction, when the grain was supplied to the Food Corporation, was in fact sale and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of in a manner that it would not strictly amount to "sale" within the meaning of the Sales Tax Act, no sales tax could be levied at this point. The goods, therefore, though consumed by a registered dealer or had been disposed of to a third person who has eventually consumed them, would remain untaxed. It is here that section 7 comes in and the purchase price of such goods are taxed in the hands of the dealer.
9.. We, therefore, answer the question in favour of the department and hold that section 7 would be attracted and the dealer would be liable to pay purchase tax under the M.P. General Sales Tax Act. The reference is answered accordingly. There shall be no order as to costs.
Reference answered accordingly. X X X X Extracts X X X X X X X X Extracts X X X X
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