MYSORE SILK HOUSE Vs. STATE OF MYSORE

JUDGEMENT

(1.) The petitioner is a dealer in power-loom cloths. The goods with which we are concerned in this case were the subject-matter of inter-State trade, the relevant period being 1st July, 1957, to 31st March, 1958.

(2.) Under the Mysore Sales Tax Act, 1957, the disputed transactions were not subject to any tax, they being second sales. But the Tribunals below have come to the conclusion that in view of section 8(1) and (2) of the Central Sales Tax Act, 1956, which came into force on 1st July, 1957, these transactions have become liable to be taxed. They have held that a portion of the turnover, i.e., Rs. 34,839-77 is liable to be taxed under section 8(2) and the remaining portion of the turnover, i.e., Rs. 86,577-49 is liable to be taxed under section 8(1) of that Act. We may mention at this stage that the latter portion of the turnover is covered by 'C' forms, as required by sub-section (3) of section 8. We have had occasion to consider the scope of section 8(2) in C.R.P. No. 964 of 1961 (Since reported as Yadalam Lakshminarasimhiah Setty & Sons v. State of Mysore [1962] 13 S.T.C. 583). Therein we have opined that he liability of a dealer, excepting as regards the minimum turnover, will under no circumstances be more than what it would have been under the provisions of the appropriate State law, had the disputed transactions related to intra-State sales. From that it follows that in this case the transactions that fall under section 8(2) cannot be subjected to any tax, as they were not liable to be taxed under the Sales Tax Law of the State.

(3.) Now coming to the other question whether the turnover of Rs. 86,577-49 is liable to be taxed, this question depends upon our decision as regards the scope of the proviso to section 8(1). Before proceeding to deal with the proviso in question, we shall refer to section 8(1). That section reads :