GANGA AUTOMOBILES PRIVATE LIMITED Vs. SALES TAX OFFICER

JUDGEMENT

(1.) These writ petitions raise common question of law and facts and hence are being disposed of by single judgment. Petitioners, M/s. Ganga Automobiles (P) Ltd. (for short 'Ganga') and M/s. Competent Motors (for short 'Competent') are the selling agents of M/s. Maruti Udyog Limited. Through these writ petitions they have challenged the assessment orders for salea tax passed for the year 1983-84 under the Delhi Sales Tax Act, 1975. Assessment orders were passed by Sales Tax Officer Shri J.N. Gupta on 27.4.1985. 28.6.1985 and 14.11.1985 respectively. The sales tax levy was at l0/n of the value of the vehicle sold to the customer. Roughly sales tax levied was around Rs. 500.00 per vehicle while the petitioners-dealers were entitled to commission of Rs. 2.000.00 per vehicle.

(2.) Under suspicion that the petitioners and M/s. Maruti Udyog Ltd. had conspired to evade Delhi Sales-Tax, the Sales Tax Department of Delhi Administration carried out an administrative enquiry through Shri J.N. Gupta, Assistant Sales Tax Officer. He made some enquiries from the petitioners and looked up the documents incorporating the main agreement between the petitioners and Maruti Udyog Limited with regard to agency. The said Assistant Sales Tax Officer had not called upon Maruti Udyog Limited to produce any documents nor made any enquiry regarding the actual transaction of sale of the Maruti car made during the year 1983-84. The learned Assistant Sales Tax Officer then came to the conclusion that there was in fact such evasion. He, on the basis of the principal agreement between the petitioners and the Maruti Udyog Limited, came to the conclusion that the sales were actually made by the petitioners in Delhi and were governed by Section 4 of the Delhi Sales Tax Act, 1975. The said officer Shri J N. Gupta then himself sat as quasi-judicial authority to determine the sales tax laiblities and confirmed the said administrative findings through a quasi-judicial order, which is challenged in these petitions.

(3.) At the time of hearing, the learned Solicitor General and Shri A.K. Ganguli Senior Advocate, who appeared for the respondent department tried to justify the order on merits but had to concede that before passing the impugned order the Assistant Sales-Tax Officer had not looked into each of the sale transaction of the Maruti car for determining the situs of the sale and the parties to the sale. In Tata Engineering & Locomotive Co. Ltd. v. The Assistant Commissioner of Commartial Taxes and another, AIR 1970 SC 1281 (at page 1286). the Supreme Court has explained the law in this regard and remanded the matter, for fresh assessment by the Assistant Commissioner. The Supreme Court held "Another serious infirmity in the order of the Assistant Commissioner was (a matter which even the Advocate- General quite fairly had to concede) that instead of looking into each transaction in order to find out whether a completed contract of sale had taken place which could be brought to tax only if the movement of vehicles from Jamshedpur bad been occasioned under a covenant or incident of that contract the Assistant Commissioner based his order on mere generalities. It has been suggested that all the transactions were of similar nature and the appellant's representative had himself submitted that a specimen transaction alone need be examined, to our judgment this was a wholly wrong procedure to fallow and the Assistant Commissioner, on whom the duly lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-State sale exigible to tax under the provisions of the Act."