1994 Supreme(SC) 659

SUPREME COURT OF INDIA
Kuldip Singh and A.S. Anand, JJ.
Civil Appeal Nos. 2947-50 (NT) of 1977
Decided On: 18.07.1994
State of Orissa Appellants
Vs.
Johrimal Gajanand Respondent

Headnote:

Orissa Sales Tax Act, 1947 - Sections 5(2)(A)(a)(ii),5(2)(A)(a) ,2(g) - Sales Tax Tribunal Orissa - Contract of sale - Whether on facts and in circumstances of case Member Sales Tax Tribunal is correct in holding that even sales in course of inter-State trade and commerce can be sale inside State if goods are inside State of Orissa and whether his interpretation of definition of sale as given in Section 2(g) of Orissa Sales-Tax Act and Explanation attached to definition sale is correct? - Assessee is a registered dealer under Orissa Sales Tax Act - Assessee purchased certain goods from a registered dealer on basis of declaration furnished by it for resale of purchased goods in State of Orissa - Goods were however sold in course of inter-State trade - Sales Tax Officer came to conclusion that declaration furnished by assessee was violated and as such it became liable under proviso to Section 5(2)(A)(a)(ii) of Act - Against assessment made respondent preferred appeals under Act before Assistant Commissioner of Sales Tax which were dismissed - Assessee thereafter preferred appeals before Sales Tax Tribunal Orissa - Tribunal by its order annulled assessment and directed refund of tax and penalty if paid - Tribunal--at instance of appellant--referred above-quoted question for opinion of High Court - Specific or ascertained goods were subject-matter of sale because these goods were purchased from registered dealers - There is no material on record to show that goods were not within State of Orissa when contract of sale was made - In facts before us normally it should be presumed that goods were actually within State unless Taxing Department established contrary - Therefore in view of definition of sale it must be deemed that sale took place within State in regard to goods - Under scheme of Act sales tax is leviable at a single point and a registered dealer at point of sale is entitled to pass on incidence of sales tax to buyer - Where buyer is a registered dealer upon furnishing a declaration in terms of Section 5(2)(A)(a)(ii) of Act he is entitled to exemption from payment of sales tax and payment of tax is shifted and deferred to a point where sale takes place in favour of a consumer an unregistered dealer or is a transaction in respect of which no declaration has been furnished even when purchasing dealer is a registered dealer - Section 5(2)(A)(a)(ii) authorises a dealer to exclude from gross turnover sales to a registered dealer of goods specified in purchasing dealers certificate of registration as being intended for resale by him in Orissa - Proviso occurring in Section 5(2)(A)(a)(ii) requires sale price of goods used by purchasing dealer for purposes other than those mentioned in his certificate of registration to be included in his taxable turnover - Held, Imposition of tax was not on sales by petitioner to person outside State but on purchases by him inside State for which he gave an undertaking and violated same by not selling goods within State of Orissa - High Court was not justified in holding that onus for proving that goods at time of contract were not within State of Orissa was on sales tax authority - Assessee on purchase of goods became liable to pay tax but he did not do so because it was a sale from a registered dealer to a registered dealer - Assessee saved tax and postponed event by giving an undertaking that he would sell goods within State - True to undertaking onus to show that goods were actually sold within State of Orissa was on assessee - In any case a contract of sale by which goods are sold and are to be transported from one State to another cannot be made a lever for argument that though sale is in course of inter-State trade and commerce but nevertheless it is a sale within State of Orissa under Section 2(g) of Act - Court have today pronounced judgment in Industrial Minerals & Metals v Sales Tax Officer wherein Court have that a sale in course of export of goods out of territory of India cannot be a sale at same time within State of Orissa - On same principles a sale in course of inter-State trade and commerce cannot be a sale within State of Orissa - Appeal Allowed