DEAGULL LABORATORIES INDIA PRIVATE LIMITED Vs. DELHI ADMINISTRATION

JUDGEMENT

(1.) The challenge in this writ petition is, inter alia, to the provisions of section 4(2)(a)(v) 3rd proviso of the Delhi Sales Tax Act 1975 (hereinafter referred to as the 'Act') in so far as the said provision includes in the turnover of the petitioner the value of the goods which had been purchased by it on the basis of its registration certificate, and which goods were not utilised as per the said registration certificate.

(2.) Briefly stated, the facts are that the petitioner is a company registered at. Delhi, both under the State Act as welt as under the Central Sales Tax Act, which has branches outside Delhi, and it carries on business of manufacture of medicines in a factory situated at Delhi. On the strength of its registration certificate, the petitioner has been purchasing the raw material locally against the statutory forms ST 1/ST 35 and also from outside Delhi against declaration form 'C' under the Central Sales-tax Act. According to the petitioner, it manufactured medicines in Delhi by using the said raw materials which it had purchased without paying the tax and, thereafter the medicincs which were so manufactured were transferred to its branches outside Delhi. According to the petitioner, these transfers took place against form 'F' which had been issued under the relevant provisions of the Central Sales-tax Act and that no chargeable event, according to the petitioner, had pccoutted because no sale was involved in such transfer of goods.

(3.) The Sales-tax Officer vide his assessment order dated 15th February 1990 observed that the petitioner had purchased the raw material on the basis of its registration certificate. Undoubtedly, the petitioner had transferred its manufactured medicines to its branches outside Delhi, but according to the said officer the provisions of the aforesaid 3rd proviso to section 4(2)(a)(v) of the Ret were clearly attracted. Invoking, the said provisions, the Sales-tax Officer added to the petitioner's turnover the value of the raw material which the petitioner had originally purchased. Without payment of tax and sales tax was thereby levied on this.