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High Court Of Madhya Pradesh
Hidayatullah, C. J. and Dixit, J.
GOVINDRAM RAMPRASAD - Appellant
Versus
ASSESSING AUTHORITY (SALES TAX) - Respondents
Civil Misc. Case 92 Of 1956
Decided On : 02/28/1957
SALES TAX - Turnover - Meaning - Whether sale of kerosene tins is liable to tax - Madhya Bharat Sales Tax Act (23 of 1950), Sec. 2(q).
Fact of the Case:
The petitioner, a registered partnership firm, purchased packed and sealed tins of kerosene from the Bombay office of the Burmah Shell Oil Storage and Distributing Company of India, Ltd. and sold them to its customers in the original packing. The Sales Tax Department initially did not include the price realized from the sale of the tins in the petitioner's turnover as kerosene was not a taxable commodity. However, a notice was later served on the petitioner under Section 10 of the Madhya Bharat Sales Tax Act informing it that a certain portion of its turnover for the year 1952-53 had escaped assessment and that the assessment was to be revised. The petitioner challenged the assessment, contending that the sale of the tins was not liable to tax as kerosene was exempt and the tins were merely containers for the delivery of kerosene.
Finding of the Court:
The Court held that the sale of kerosene tins was liable to tax as there was a sale of the tins as such. The Court observed that when kerosene is sold in bulk, it is charged less than when it is sold in a tin, indicating that the purchaser is paying for both the kerosene and the tin. The Court further noted that the exemption in the Act was only for kerosene and not for the container, and therefore, the tax could not be avoided unless there was a specific exemption for the container.
Issues: 1. Whether the sale of kerosene tins is liable to tax under the Madhya Bharat Sales Tax Act? 2. Whether the exemption for kerosene in the Act extends to the containers in which it is sold?
Ratio Decidendi: 1. The definition of 'turnover' in Section 2(q) of the Madhya Bharat Sales Tax Act includes the aggregate amount for which goods are either sold or supplied. The words 'either' and 'or' in the definition indicate two separate sets of circumstances: (i) the outright sale of goods; and (ii) the supply of goods towards the completion of a contract for work. 2. The exemption for kerosene in the Act does not extend to the containers in which it is sold. The exemption is specific to kerosene and cannot be stretched to cover a commodity for which the exemption was not meant.
Final Decision: The petition was dismissed, and the Court held that the sale of kerosene tins was liable to tax.
( 2 ) THE petitioner avers that the assessment order which is said to have been passed on 29th March, 1956, was not brought to its notice. The Department in its reply has said that the shop of the petitioner was found closed and the notice was affixed to the house of the petitioner on 31st March, 1956. Nothing much turns upon this except in one way. The petitioner does not contend that the order has been antedated or that it was not passed within three years' period of grace allowed under Section 10 of the Act. It contends that the assessment is not complete till the assessment order is brought to the notice of the assessee. It contends, therefore, that for the purposes of Section 10 not only the assessment order should be passed within the period indicated in that section, but it should be brought to the notice of the assessee also within the said period.
( 3 ) THE petitioner contends that the sale which takes place is of kerosene, which is an exempted commodity, and the tin is merely a packing or a container for the delivery of kerosene to the purchaser. It submits that the petitioner receives these packed and sealed tins from the Head Officer of the Burmah Shell and delivers them in the same state to the customers without doing anything or putting them in any containers. It, therefore, contends that these tins are not liable to tax even though under the notification issued by the Government on 30th April, 1950, articles made of metals other than gold and silver are liable to sales tax. The petitioner lastly contends that on a proper construction of the relevant sections of the Act, the tax cannot be levied upon such containers and that the Department has erred in thinking that the containers divorced from the exempted commodity can be so taxed.
( 4 ) AT the beginning of the case, a preliminary objection was raised by Shri Sharma appearing for the Department. He contended that the petitioner had not exhausted its remedies under the Act and had not filed any appeal or revision. He pointed out that the amendment requiring the deposit of the tax in matters of revision was made as late as 1950, and, therefore, the petitioner could have filed a revision without any burden b
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