VENKATESWARA OIL MILLS Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioners a partnership firm are dealers under the Central Sales Tax Act, 1956, hereinafter called 'the Act'. For the period from 1-4-1964 to 31-3-1965, they furnished a return showing a total turnover of Rs.7,90,495-78, of which they claimed exemption on a turnover of Rs.5,05,825-85. The exemption claimed related to sales of groundnut seeds and groundnut cake.

(2.) During the period 1964-65, under the Mysore Sales Tax Act, 1957, tax was leviable on groundnut seeds at the point of last purchase and on groundnut cake at the point of first sale. On 10-11-1964 in State of Mysore v. Yadalam Laksminarasimhiah Setty & Sons, 16 STC 231, the Supreme Court held that no tax could be levied under the Act if no tax could have been levied under the Sales Tax Law of the appropriate State if that sale had taken place inside that State. Applying the said decision, the Commercial Tax Officer, First Circle, Bangalore (Respondent No.1), while making the assessment on the petitioners held that turnover of Rs.2,53,256-74 relating to groundnut seeds and Rs.1,79,037-80 relating to groundnut cake were not taxable under the Act, and consequently, exempted the said turnover, by his order dt.8-2-1968.

(3.) On 8-6-1969, the President of India promulgated the Central Sales Tax (Amendment) Ordinance 1969, with the object of superseding the decision in Yadalam's case(1), and to bring to tax sales effected by every dealer in the course of inter-State trade or commerce notwithstanding the fact that no tax could have been levied under the Sales Tax Law of the appropriate State if that sale had taken place inside that State. The Ordinance was replaced by the Central Sales Tax (Amendment) Act, 1969 Act 28 of 1969), hereinafter called the Amendment Act.