JUDGMENT

HIDAYATULLAH, J.

The appellant is a public limited company which manufactures the well-known Tata Mercedes-Benz trucks, bus chassis, their spare parts and other accessories at Jamshedpur in the State of Bihar and they are sold to the Government of India, the State Governments, State Transport Corporations and others. In the course of its business the appellant-company sells its products, particularly the trucks and bus chassis, to dealers in various parts of India and the dealers resell them to consumers all over India. According to the appellant-company, its sales in the Indian market are of three kinds :

(a) Sales inside Bihar State;

(b) Sales in the course of inter-State trade and commerce; and

(c) Sales effected from their stock-yards located in States other than Bihar.

The present appeal concerns sales in the last category and the question arises in the following circumstances.

The appellant-company filed returns for the quarter ending on June 30, 1965, under the Bihar Sales Tax Act and the Central Sales Tax Act respectively, including in the former, sales to consumers in Bihar State and in the latter, sales in the course of inter-State trade or commerce, and paid full tax due on such sales. The appellant-company did not include sales from the stock-yards, in any of its returns.

On November 12, 1965, the Assistant Commissioner of Commercial Taxes, Jamshedpur, sent a notice (No. 11284) informing the appellant-company that the returns appeared to be incorrect as all sales were not included and directed the appellant-company to include all its sales in revised returns and all returns to be filed in future. The appellant-company demurred that sales from their stock-yards in other States were neither sales in the State of Bihar, nor sales in the course of inter-State trade or commerce and were thus not taxable in Bihar. This plea was not accepted and revised returns for the quarters ending on June 30 and September 30, 1965, were ordered to be filed. The appellant-company filed amended returns under protest and without prejudice to its contentions. At the same time the appellant-company disclosed the entire procedure of sales ex-stock-yards and relied upon section 4(2) of the Central Sales Tax Act to exclude such sales. The appellant-company also inquired whether these sales were to be treated as sales in Bihar for the purposes of the Bihar Sales Tax Act or as sales in the course of inter-State trade and commerce for purposes of the Central Sales Tax Act but no reply was given. The appellant-company further asked for an opportunity to produce declarations from its customers, who are also registered dealers, with a view to claiming a rebate, but this opportunity was denied. The appellant-company objected to the assessment for a period of six months under a tax legislation, which it claimed, was intended to operate yearly but to no effect. According to the revised returns filed under compulsion, the break-up of the sales was as follows : The total gross turnover was Rs. 33,99,23,595. The appellant-company claimed to deduct (a) sales from stock-yards at extra State points (Rs. 15,09,24,204); (b) sales in the course of export out of India (Rs. 34,83,671); and (c) sales effected in Bihar on which Bihar sales tax was payable (Rs. 3,64,79,209). The balance of Rs. 14,90,36,510, according to the appellant-company, consisted of sales (Rs. 14,33,02,855) to registered dealers taxable at 2 per cent. and sales of the balance to unregistered dealers taxable at 10 per cent. The tax for the period April 1, 1965 to September 30, 1965, was computed at Rs. 34,05,028. The appellant-company stated to have paid against it Rs. 34,45,699 as tax in the Government Treasury and denied any further liability.

The Assistant Commissioner after turning down the requests for adjournments proceeded to assess the appellant-company. The gross turnover for the two quarters was taken to be Rs. 35,13,60,725. The difference (Rs. 1,14,37,129) arose because tax