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TMI Blog1985 (4) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... n yarn and sells it to registered dealers, unregistered dealers and consumers. For the assessment year 1968-69, the appellant submitted his return of turnover under the State Act and claimed exemption in respect of the turnover of sales of cotton thread on the ground that it was an exempted item under Entry No. 21 of the Second Schedule. The Sales Tax Officer, by his order dated October 29, 1970, held that the sales were effected in respect of cotton yarn and, therefore, they were liable to tax at one per cent. On appeal, the Assistant Commissioner of Sales Tax took a contrary view and on his finding that the transactions were in respect of cotton thread, he allowed the appeal and struck the assessment down. Acting suo motu in the exercise of his revisional jurisdiction, the Deputy Commissioner of Sales Tax made an order under subs. (3) of S. 20 of the State Act reversing the order of the Assistant Commissioner and restoring that of the Sales Tax Officer on the ground that what was sold was cotton yarn. The appellant now applied in revision to the Financial Commissioner, Delhi Administration, and the Financial Commissioner, proceeding on the basis that the sales were in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods : Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for re. sale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer. " In the instant case, we are concerned with the taxation of goods which under S. 14 of the Central Sales Tax Act have been declared to be of special importance in inter-State trade or commerce. Where the turn. over of such goods is subjected to tax under the sales tax law of a State, s. 15 prescribes the maximum rate at which such tax may be imposed and requires that such tax shall not be levied at more than one point. The two conditions have been imposed in order to ensure that inter-State trade or commerce in such goods is not hampered by heavy taxation within the State occasioned by an excessive rate of tax or by multi-poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g successive dealers when he sold the goods to an unregistered dealer or a consumer. In this connection, the High Court relied on the construction placed by it on sub-cl. (ii) of cl. (a) of sub-s. (2) of s. 5 in Fitwell Engineers v. Financial Commissioner, Delhi Administration [1975] 35 STC 66 (Delhi). In that case, the High Court had held that it was for the purpose of taxing the goods at least at one point that sub-cl. (ii) of cl. (a) of sub-s. (2) of s. 5 of the State Act had been enacted, that there would be a taxable sale when the registered dealer sold the goods to an unregistered dealer or to a consumer, and that in order that such resale by the registered dealer should attract tax, the resale to an unregistered dealer or to a consumer had to be effected in Delhi, because if the resale was effected outside the Union Territory of Delhi, the Union Territory of Delhi would have no legislative competence to tax the resale. Now, the question whether the expression " resale " in sub-cl. (ii) of cl. (a) of sub-s. (2) of s. 5 of the State Act was confined to a resale in the Union Territory of Delhi by the last registered dealer was subsequently considered by this court in Polestar E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax. " On the construction which found favour with this court in Pokstar Electronic (P) Ltd. [1978] 41 STC 409, it is apparent that no support can be found for the proposition that sub-cl. (ii) of cl. (a) of sub-s. (2) of s. 5 of the State Act implies that the single point of taxation is fixed by the State Act at the resale by a registered dealer to an unregistered dealer or to consumer. As that is the reasoning on which the High Court has proceeded in the judgment under appeal, we must hold that the basis underlying the decision of the High Court cannot be accepted. It may be noted that the State Act as applied to the Union Territory of Delhi was amended by Parliament in 1959 and s. 5A was inserted. S. 5A provides: " Notwithstanding anything to the contrary in this Act, the Chief Commissioner may, by notification in the Official Gazette, specify the point in the series of sales by successive dealers at which any goods or class of goods may be taxed. " That provision clearly empowers the Chief Commissioner to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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