A dealer who purchases goods under a declaration in form 14 is liable to pay purchase tax if he contravenes the conditions of the declaration, such as by not reselling the goods.

The judgment of the Court was delivered by.

DR. B. P. SARAF, J. - By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following questions of law to this Court for opinion :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the applicant had contravened the conditions/ recitals of declaration in form 14 so as to render itself liable for purchase tax under section 14 of the said Act; and

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the applicant was a 'manufacturer' of bus bodies (sic) and should be held as 'manufacturer' of buses ?"

2. The material facts of the case, relevant for determination of the controversy raised in the above questions, briefly stated, are as follows :

The assessee, M/s. Tata Engineering and Locomotive Co. Ltd., Bombay, carries on the business of manufacture and sale of motor vehicle chassis. The assessee often gets orders from its customers for supply of complete buses of particular specifications. The assessee does not construct bus bodies. On receipt of such orders for supply of complete buses, it gets bus bodies constructed by outside parties on the chassis provided by it. Such bus bodies are purchased by the assessee against declaration furnished in form No. 14 as prescribed under section 12(a) of the Bombay Sales Tax Act, 1959 ("the Act"), without paying any tax on sales of bus bodies by the manufacturer or supplier of bus bodies to the assessee. During the period April 1, 1968 to March 31, 1969, the assessee purchased from one M/s. Ruby Coach Builders Pvt. Ltd. ("Ruby Coach Builders") bus bodies worth Rs. 9,16,805 without payment of any sales tax thereon by furnishing declarations in form No. 14 prescribed under the Bombay Sales Tax Rules, 1959 ("the Rules").

3. The assessee had received an order from one M/s. Mlsr Car Trading Company of Egypt for supply of Mercedes Benz diesel engine complete bus with aluminium superstructure and/or of steel body with 54 passenger seats of the sizes specified in the purchase order complete with wheels and bars of the sizes mentioned therein. The value of each complete bus was fixed at Rs. 71,039 f.o.b. Bombay. In pursuance of the above order, the assessee supplied to the said firm complete buses of the description and specifications contained in the above purchase order. The sales of buses effected by the assessee to the said firm in Egypt, being export sales, were not subject to any tax under the Bombay Sales Tax Act or the Central Sales Tax Act.

4. At the time of assessment of the assessee under the Bombay Sales Tax Act for the above period, i.e., April 1, 1968 to March 31, 1969, the Sales Tax Officer levied purchase tax under section 14 of the Act on the turnover of purchases of bus bodies made by the assessee from Ruby Coach Builders without payment of tax under declarations in form No. 14 on the ground that the said bus bodies were not resold by the assessee. According to the Sales Tax Officer what was sold by the assessee was a complete bus which was distinct and different from the bus body purchased by it on the strength of the declaration. The Sales Tax Officer was, therefore, of the opinion that there was no resale of the bus bodies by the assessee within the meaning of section 2(26) of the Act.

5. The assessee appealed to the Assistant Commissioner of Sales Tax (Appeals) against the levy of purchase tax on the value of bus bodies by the Sales Tax Officer. The Assistant Commissioner (Appeals) dismissed the appeal of the assessee and confirmed the order of the Sales Tax Officer. The assessee went in further appeal to the Maharashtra Sales Tax Tribunal ("the Tribunal"). The Tribunal also dismissed the appeal of the assessee and confirmed the order of the Sales Tax Officer and the Assistant Commissioner. Hence this ref