BYFORD MOTORS LIMITED Vs. SALES TAX OFFICER DELHI

JUDGEMENT

(1.) Both these applications have been filed under Order 39 Rule 1 and 2 readwith Section 151 of the Code of Civil Procedure (hereinafter referred to as 'the Code'). In IA 5606/93 it has been prayed that defendant Nos.l to 3 be restrained from making any assessment on the basis of letters annexure A & C or any other assessment of sale which to the record of the plaintiff company took place outside Delhi. In IA 6554/93 the plaintiff has prayed for stay of the recovery of any amount under the two demand notices both dated 10th June, 1993 for the years 1990-91 as well as 1991-92 respectively (copies of which have been annexed as annexures E & H to the application) and also for stay of recovery of the amount under assessment orders (copies of which have been annexed as annexures F,G, 1 & J to the application). Common reply has been filed on behalf of defendants 1 and 2 to these application.

(2.) Mr. Khanna, learned senior counsel appearing on behalf of the plaintiff submitted that the transactions being impugned by the defendants 1 to 3 took place outside Delhi and did not fall within ambit and scope of Delhi Sales Tax Act, 1975 (hereinafter referred to as the Local Act). In this connection, he drew my attention to Section 8 of the Local Act and Sections 3,4 and 5 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act). He submitted that in terms of Section 8, no sales tax is imposable when such sale or purchase takes place "outside Delhi". He further submitted that in terms of explanation under Section 8 of the Local Act, for determining whether a particular sale or purchase has taken place outside Delhi, Sections 3,4 and 5 of the Central Act are applicable and under Section 4 of the Central Act, the sale or purchase will be deemed to have taken place outside Delhi in case the goods are not lying within the State at the time when the contract for sale or purchase was made. Relying on these provisions, the learned counsel contended that since the vehicles which are subject matter of the assessment orders were not stored in the Union Territory of Delhi when the contract of sale was made, the sale of these vehicles will be deemed to have taken place outside Delhi and as such no sales tax could be levied by the defendants 1 to 3. In support of this contention, the learned counsel placed reliance on two judgements of the Supreme Court reported as The Instalment Supply Ltd. VS. S.T.D. Ahemadabad, AIR 1974 SC 1195 and State of Kerala VS Ramaswami lyer & Sons, 1966 (3) SCR 582.

(3.) Learned counsel also submitted that the error committed by the Assessing Officer is an error of law and the Assessing Officer wrongly assumed jurisdiction which was in violation of Article 286 of the Constitution of India. In support of this contention, the learned counsel again placed reliance on the Supreme Court Judgement in the case of The Instalment Supply Ltd. (supra). The learned counsel, therefore, contended that since the impugned orders passed by the defendants 1 to 3 are without jurisdiction and admittedly the petitioner has not collected the amount of sales tax from the customers, the operation of the impugned orders should be stayed. In support of this contention he placed reliance on a judgement of this Court reported as Kelvinator of India Ltd., New Delhi Vs. Collector of Customs and Central Excise (Appeals), 1987(32) ELT 663(Del.).