9911796707
TMI Blog1990 (11) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... ming into force of the Constitution (Forty-sixth Amendment) Act, 1982, which enables the States to levy tax on the transfer of property in goods involved in execution of works contract and incorporation of section 3A in the Tripura Sales Tax Act, 1976, hereinafter "the Tripura Act", by the Tripura Sales Tax (Third Amendment) Act, 1984, which provides for payment of tax on such transfers, there is no controversy as to whether the transfer of property in execution of the aforesaid contract amounts to sale or not. The undisputed position is that it amounts to sale and is exigible to tax. As the supplies of materials in the instant case for use in execution of the contract were all made from outside the State of Tripura, such supplies, according to the petitioner, amounted to inter-State sales exigible to tax under the Central Act. There was no intrastate sale in Tripura. The petitioner, therefore, did not register himself as a dealer under the Sales Tax Act in Tripura. It was, however, registered as a dealer under the Central Sales Tax Act, 1956, hereinafter "the Central Act", in the State of West Bengal. It also filed its returns of turnover under the Central Act with the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve also heard the learned Government Advocate. We may first take up the question as to whether there was a valid initiation of proceedings under section 11(1) of the Tripura Act which could enable the Superintendent of Taxes to make the impugned assessment. The material facts of this case are not in dispute. The admitted position is that no notice contemplated by sub-section (1) of section 11 of the Act was served on the petitioner requiring him to file the return for the relevant period. The only notice that is claimed to have been issued was a notice under subsection (1) of section 6 of the Tripura Act asking the petitioner to apply for registration. Evidently it was not a notice under section 11(1) of the Act. Under these circumstances, the question that arises for consideration is whether the impugned assessment, admittedly made without service of a notice under section 11(1) of the Tripura Sales Tax Act, is legal and valid. For proper appreciation of this controversy it is necessary to refer to section 11 of the Tripura Act which deals with the powers of the authorities to make assessment in cases of evasion and escape. It reads: "11. Assessment in cases of evasion and escap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade therefrom. (2) The satisfaction should be based upon information which has come into his possession. If the aforesaid conditions are satisfied, the authority concerned can assume jurisdiction under section 11 and initiate the proceedings for assessment of the dealer for the relevant period. The initiation of proceedings can be done by service on the dealer concerned a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 8 of the Act. No form of notice has been prescribed. What is required is that a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 8 should be served. Sub-section (2) of section 8 provides for a notice in the prescribed form requiring a dealer to furnish a return of his turnover to the authority concerned. Therefore, to initiate a proceeding under subsection (1) of section 11 for assessment or reassessment of a dealer, a notice must be served on the dealer concerned within the specified time requiring him to furnish return of his turnover for a particular period during which the evasion or escapement is alleged. Proceedings under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to furnish a return of his turnover for a particular period or periods. Once proceedings for assessment or reassessment are initiated under; sub-section (1) of section 11 by service of notice as indicated above, all the relevant provisions of the Act, including the provisions for assessment, apply as they apply to an original assessment. In other words, whether the dealer in pursuance of notice under sub-section (1) of section 11, submits a return or not, the assessment shall have to be made in the manner laid down in section 9 of the Act and in no other manner. In the instant case, the admitted position is that no notice contemplated by sub-section (1) of section 11 was served on the dealer. The Superintendent of Taxes, on being satisfied that the petitioner was liable to pay tax under section 3A(1) of the Act on the value of the contract in the State of Tripura, straightway assessed the petitioner in the purported exercise of powers under section 11(1) of the Act by-passing the impugned order of assessment. Evidently, this cannot be done under the law. We are, therefore, constrained to hold that the condition precedent for assessment under section 11 of the Act, namely, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execution of works contract. Section 3 of the Central Act lays down the principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce. Interpreting this section the Supreme Court has also in a number of cases held that if the movement of goods from one State to another is the result of a covenant or an incident of contract of sale then the sale is an inter-State sale. The inter-State movement must be the result of a covenant, express or implied in the contract of sale or an incident of the contract. If the movement of goods is the result of contract and is an incident of an agreement between the parties the transaction will remain a sale in the course of inter-State trade no matter in which State the delivery of the goods is taken by the purchaser. The passing of property in a particular State is not the relevant criteria for determining whether a sale is an inter-State sale or not. Reference may be made in this connection to the following observation of the Supreme Court in Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 at 449: "No matter in which State the property in the goods passes, a sale which occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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