HARBANS MOTOR STORES Vs. SALES TAX COMMISSIONER

JUDGEMENT

(1.) The petitioners have instituted three Writ Petitions under Article 226 of the Constitution of India in connection with the imposition of sales tax on old or second hand motor tyres and tubes which were by petitioner No. 1. The numbers of the Petitions are Civil Writ No. 1324 of 1969, No. 285 of 1970 and Civil Writ No. 323 of 197 Other petitions by other parties involving similar points to the points raised by the petitioner have been heard along with these Writ Petitions. The main judgment is being delivered in Civil Writ No. 1324 of 1969 brought by the petitioner, in the course of this judgment, I shall also deal with the points raised in Writ Petitions Nos. 285 of 1970 and 323 of 1971, aforementioned. The main challenge in the present Writ Petition is against the assessment order passed by the Sales Tax Officer, Ward No. V, Delhi, on 29th September- 1969. By this order, which relates to the assessment year 1967-68, the Sales Tax Officer rejected the claim of the petitioner claiming exemption of sales tax payable on old or second hand motor-car tyres and tubes. Indirectly, the validity of notification. No. F. 4(33)-54-Fin(E), dated 30th June, 1965, issued under the signatures of the Under Secretary, Finance (Expenditure) Delhi Administration, is challenged. This notification was issued under Section 5A of the Bengal Finance (Sales Tax) Act, 1941, and was intended to fix the point at which sales tax would be payable on the sale of all kinds of tyres and tubes Including tyres and tubes of motor vehicles in the Union Territory of Delhi.

(2.) The petitioners in this Writ Petition are M/s. Harbans Motor stores and three others. The first petitioner is stated to be a partnership of which petitioners Nos. 2 to 4 are partners. It is, therefore, only necessary to refer to the first petitioner hereafter. The said petitioner is a firm which is registered as a dealer with the Sales Tax authorities. Originally, the first petitioner was registered qua motor tyres and tubes also but later on, on account of the aforementioned notification, the registration was altered and the entry relating to motor tyres and tubes was omitted. This petition is a result of the alteration of the registration as will appear hereafter. According to the case of the petitioner, the petitioner-firm buys disposal goods, old motor vehicles and old motor parts at public auctions conducted by Government auctioneers. These old motor venicles and other motor parts are stated to be or belong to old condemned vehicles belonging to the Ministry of Defence which are sold under the instructions of the Director General Supplies and Disposals, New Delhi. According to the case set out in the petition, the former procedure was that when parts of these old vehicles were dismantled and sold, sales tax was charged from ordinary consumers but not when parts were sold to registered dealers. As regards tyres and tubes, if the same were sold to ordinary consumers, sales tax was charged from those customers and paid to the sales Tax authorities. If the sale was to a registered dealer, then no sales tax was charged. However, after the issue of the notification in June 1965, the petitioner could not follow this procedure as the notification made the sales tax chargeable at a different point. Thereafter all sales effected by the petitioner were made without charging any sales tax from the customers whether they were registered dealers or ordinary consumers.

(3.) Without reproducing the notificatiOn at this stage, it is sufficient to say that the effect of the notification dated 30th June, 1965 was to make tyres and tubes of motor vehicles, motor cycles, etc., chargeable to sales tax only at the point of sale by an importer (if imported from outside the Union Territory) or sale by a manufacturer (if manufactured in the Union Territory). The case of the petitioner-firm is that it is neither an importer nor a manufacturer and hence it was not liable to charge sales tax on the sale of old motor tyres and tubes obtained by it from dismantling vehicles purchased at Government auctions.