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TMI Blog1981 (1) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... orm was obtained by the assessee in connection with the purchase of such goods, viz., oilcakes, nor such C form was required to be furnished for the sale of such goods as they were exempt from payment of sales tax under the appropriate sales tax laws of the States of Rajasthan and Uttar Pradesh? (3) Whether, under the facts and circumstances of the case, penalty imposed on the applicant under section 43(1) of the State Act read with section 9(2) of the Central Act was proper and legal?" 2.. The facts giving rise to this reference as set out in the statement of the case are as follows: The assessee dealt in foodgrains, oil-seeds, etc., and was assessed to sales tax under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act) for the Diwali year 1960-61. Oilcakes sold by the dealer in inter-State trade was assessed to tax. Penalty of Rs. 1,000 was also imposed under section 43 of the Act read with section 9(2) of the Central Act on the ground that the dealer had shown inter-State sales in the returns at Rs. 8,66,957 only, whereas total inter-State sales were Rs. 73,17,232. The assessing authority did not accept the explanation of the assessee that the subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat subject to the provisions contained in section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. Sub-section (2) of section 4 provides that sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State- (a) ................................................; and (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. However, the provisions of section 4 are subject to the provisions of section 3 of the Central Act. Section 3 of the Central Act provides that a sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) ........................................ (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. In the present case it is common ground that the sale is effected by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified. 6.. (2) Notwithstanding anything contained in sub-section (1), where a sale in the course of inter-State trade or commerce of goods of the description referred to in sub-section (3) of section 8- (a) has occasioned the movement of such goods from one State to another; or (b) has been effected by a transfer of documents of title to such goods during their movement from one State to another; any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods, shall not be subject to tax under this Act: Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer from whom the goods were purchased, containing the prescribed particulars. Section 8. (1) Every dealer, who in the course of inter-State trade or commerce,- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3); shall be liable to pay tax under this Act, which sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government. Section 9. Levy and collection of tax and penalties.-(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of interState trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed for the purposes of clause (a) of sub-section (4) of section 8 of the Central Act is form C. The learned counsel for the assessee contended that the purpose of obtaining form C is to have the sales taxed at concessional rate under section 8(1) of the Central Act because the provisions of section 8(1) of the Central Act apply only if the provisions of section 8(4) of the Central Act are complied with and the requisite form C is obtained. However, it is common ground that no sales tax was leviable on the sales of oilcakes in the States of Rajasthan and Uttar Pradesh. The learned counsel for the assessee therefore contended that it was not necessary for the assessee to have obtained form C and, therefore, the proviso to section 9(1) of the Central Act is not attracted to the sales in question and the State of Madhya Pradesh is not competent to levy and collect sales tax on the said sales. Reliance was placed by the learned counsel for the assessee on the decision of the Madras High Court in State of Madras v. K. Nandagopal Chetty [1968] 22 STC 290. In that case the assessee transferred the documents of title to the goods which initially moved out from the State of Gujarat t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the registered dealer effecting the subsequent sale has his place of business....... It has also been made clear that for the purposes of assessment, collection and payment of tax, the Act will attract the procedural provisions relating to......appropriate State." The contention of the learned counsel for the department cannot be upheld. The introduction of the words "could have obtained" in the proviso to section 9J) of the Central Act does not make any difference in the present case. As stated above the purpose of obtaining form C is to have the sales taxed at concessional rate under section 8(1) of the Central Act. If no tax was leviable on the sales of oilcakes in the States of Rajasthan and Uttar Pradesh there was no question of having the sales taxed at concessional rate and, therefore, there was no necessity of obtaining the C form as provided under section 8(4) of the Central Act. In the circumstances, it cannot be said that the assessee could have obtained form C as prescribed under section 8(4) of the Central Act because no purpose was to be served by obtaining such form. The Statement of Objects and Reasons also does not help the department because the language of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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