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TMI Blog1982 (9) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of tax as required under section 18(7) had been established and the onus cast upon the Commissioner had been discharged? (iii) Whether the provisions of section 18(7) are penal in nature and mens rea has been established from the facts and circumstances of the case? (iv) Whether under the facts and circumstances of the case, the order of the first appellate authority was erroneous and prejudicial to the interest of the Revenue and revision under section 39(2) of the Act was justified?" The applicant M/s Narbada Ice Factory, Jabalpur, is a dealer registered under the Madhya Pradesh General Sales Tax Act, 1958. It is engaged in manufacture and sale of ice and was assessed to sales tax for the period 1st May, 1963 to 31st March, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old to the consumers at a higher price. Earlier under the C.P. and Berar Sales Tax Act as the tax was on the last point, it is this distributing agency whose sales were taxed. The position, however, is different under the present Act where tax is at the first point. Apparently by this arrangement of sale to the distributing agency and by it to the consumers at a higher price, the three constituents forming the partnership are in a position to avoid sales tax to certain extent. It appears that influenced by this factor the sales tax authorities, except the Appellate Assistant Commissioner, have resorted to section 18(7) of the Act while assessing the sales by the applicant. 3.. Section 18(7) of the Madhya Pradesh General Sales Tax Act, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stituting the distributing agency but it appears only an incidence thereof. It is also not the finding of the Tribunal that this distributing agency was fake, illusory or was a mere make-believe affairs. It was not possible to say so because the agency was in existence since 1951 when the tax was on the last point. In our opinion, therefore, the dominant object of constituting the distributing agency is not with a view to avoid payment of tax but is to eliminate competition among its three constituents, including the applicant. We further find that there is no material on record to show that the sales by the applicant to the distributing agency, i.e., the favoured buyer, are abnormally low in comparison to the price charged with other deale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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