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1991 Supreme(Guj) 167
A.P. Ravani, S.D. Dave, JJ.
STATE OF GUJARAT
Versus
HARIDAS MULJI THAKKER.
Sales Tax Reference No. 9 of 1983
Decided On: Decided On : 14-06-1991
Kamal Mehta for M/s. H. V. Chhatrapati & Co., for the applicant.
R. D. Pathak for S. L. Modi, for the respondent.
There can be two sales, simultaneously, one covered by section 3(a) of the Central Sales Tax Act, 1956, and the other covered by section 3(b) of the Act.
Headnote:
SALES TAX - Inter-State sale - Second sale between dealer and purchasers - Whether inter-State sale or local sale - Held, inter-State sale.
Fact of the Case:
The assessee, a registered dealer under the Gujarat Sales Tax Act, 1969 and the Central Sales Tax Act, 1956, received orders from purchasers in Gujarat for carbon dioxide cylinders or dry ice. The assessee placed orders with the Bombay supplier, which sent the goods directly to the purchasers as per the assessee's instructions. The assessee charged a higher rate than the Bombay supplier and took different transport receipts in the name of the purchasers. The sales tax authorities considered the second sale as a local sale in Gujarat, but the Tribunal held it to be an inter-State sale falling within section 3(b) of the Central Sales Tax Act, 1956.
Finding of the Court:
The High Court upheld the Tribunal's decision, holding that there were two deliveries of the goods, both synchronized in point of time but separate in point of fact and in law. The first sale between the assessee and the Bombay supplier was covered by section 3(a) of the Central Sales Tax Act, 1956, and the second sale between the assessee and the purchasers was covered by section 3(b) of the Act.
Issues: Whether the second sale between the assessee and the purchasers was an inter-State sale or a local sale.
Ratio Decidendi: The High Court held that the second sale was an inter-State sale because there were two deliveries of the goods, both synchronized in point of time but separate in point of fact and in law. The first delivery was from the Bombay supplier to the assessee, and the second delivery was from the assessee to the purchasers. The second delivery took place during the movement of the goods from one State to another, and therefore the provisions of section 3(b) of the Central Sales Tax Act, 1956, were attracted.
Final Decision: The High Court answered the reference in the affirmative, holding that the second sale was an inter-State sale and not a local sale.
The judgment of the Court was delivered by
A. P. RAVANI, J. - This is a reference under section 69 of the Gujarat Sales Tax Act, 1969, at the instance of the Revenue. The period of assessment in question is :
April 1, 1973 to March 31, 1974,
April 1, 1974 to March 31, 1975 and
April 1, 1975 to March 31, 1976.
The opponent-assessee is a registered dealer under the provisions of the Gujarat Sales Tax Act, 1969 and also under the Central Sales Tax Act, 1956. The assessee is distributor of carbon dioxide manufactured by Sardar Carbonic Gas Co., Bombay. The assessee received orders from its purchasers from Gujarat (Surat and Ahmedabad) for carbon dioxide cylinders or dry ice. The opponent-assessee used to place orders with the Bombay supplier which in turn used to send the carbon dioxide gas directly to the purchaser, as per the instructions of the opponent. The rate charged by the opponent from the purchasers was apparently higher than the rate charged by the Bombay supplier. As per the instructions of the opponent, the Bombay supplier took different transport receipts in the name of the purchasers and sent the goods directly to the purchasers. During the period in question certain goods were sent to Surat purchaser by motor transport and consigned to the Surat purchaser as consignee by name. In case of Ahmedabad purchaser, the goods were sent by rail. Railway receipts were taken out in the name of Ahmedabad purchaser. Transport receipts in the case of Surat purchaser were used to be handed over to the transporter for delivery to the purchaser along with the goods, whereas in the case of Ahmedabad purchaser, the railway receipts were sent by Bombay supplier directly by post to the purchaser at Ahmedabad. The goods were thus taken delivery of by the purchasers from the respective carriers. Freight in each case was borne by the purchasers because the goods were loaded by the Bombay supplier at Bombay as f.o.r. Bombay. Empty cylinders were returned by each purchaser to the Bombay supplier directly.
2. The opponent considered the second sale between it and the purchasers at Surat and Ahmedabad as inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956. The sales tax authorities did not consider the second sale as inter-State sale, but considered the same as local sale in the State of Gujarat. After the assessments were made, accepting the contention of the assessee that the second sales were inter-State sales falling within section 3(b), the matters were taken in suo motu revision by the Commissioner. The revision applications were heard by the Assistant Commissioner of Sales Tax.
The Assistant Commissioner of Sales Tax did not accept the contention of the assessee and ordered that the sales be considered as local sales and assessments be made accordingly. For the purpose of deciding this reference it is not necessary to refer to the details as regards the quantity of sale. However, it may be noted that for all the three assessment periods, the total amount of tax in dispute came to Rs. 3,360, Rs. 4,768 and Rs. 8,605, respectively.
3. The opponent-assessee felt aggrieved by the order passed by the revisional authority, and carried the matter before the Tribunal by way of further revision as provided under section 67 of the Act. Before the Tribunal the opponent-assessee contended that the transaction between the opponent-assessee and the purchasers was inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956; and alternatively it was a sale within the State of Maharashtra. The Tribunal upheld the contention of the assessee and held that it was inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956. The Tribunal did not decide the alternate point. However, it did observe that if it were necessary to decide, it would have held that the second sale had taken place within the State of Maharashtra.
4. After
