STATE OF GUJARAT Vs. ESSO STANDARD

JUDGEMENT

(1.) THE question which is referred to us by the Sales Tax Tribunal for our decision is : " Whether, on the facts and in the circumstances of this case, and having regard to the provisions of section 9 (1) of the Central Sales Tax Act, 1956 read with the proviso thereto, with particular reference to the expressions "obtained" and "could have obtained" used therein, and having regard to the other relevant provisions of that Act, the Tribunal was right in law in holding that State of Gujarat had no jurisdiction to levy Central sales tax on the opponent's impugned subsequent sales of Rs. 2,92,398. 84 and in accordingly setting aside the levy of Central sales tax thereon and in also removing the penalty of Rs. 8,127. 61 imposed under section 36 (3) of the Bombay Sales Tax Act, 1959 read with section 9 (2) of the Central Sales Tax Act, 1956 ?" THE opponent is a dealer in petroleum products. It has its head office in Bombay and branch office in Gujarat. It is registered as a dealer at both the places under the Central Sales Tax Act. Between August 23, 1969 and October 12, 1969, the opponent through its local office in Gujarat purchased certain petroleum products from Indian Oil Corporation's refinery situated at Koyali near Vadodara. As the said goods were purchased for the head office at Bombay they were sent to Bombay, and there is no dispute that the said sales took place in the course of inter-State trade and commerce. THE opponent had furnished declarations in form "c" as provided by section 8 (1) (b) read with section 8 (4) (a) of the Central Act, and had, thus obtained the benefit of concessional rate of sales tax at 3 per cent. THE "c" forms which the opponent had furnished to the selling dealer were obtained by the opponent's head office from the State of Maharashtra. While the goods were still in movement from one State to another, the opponent effected second sales of these goods to certain dealers in Maharashtra State by transferring railways receipts in their favour. THEse subsequent sales were of the value of Rs. 2,92,398. 84. Initially, in the quarterly returns for the period, the opponent had included its subsequent sales in its turnover of sales and had claimed deduction of said sales believing that they were exempt from the levy of Central sales tax under sub-section (2) of section 6 of the Central Act. But after coming to know that the Maharashtra dealers in whose favour the subsequent sales were effected were not registered under the Central Act, and the sales were, therefore, not entitled to the exemption under section 6 (2) of the Central Act, the opponent filed a revised statement excluding the said subsequent sales.

(2.) BEFORE the Sales Tax Officer it was contended on behalf of the opponent that the subsequent sales did not fall under section 6 (2) of the Central Act, but the appropriate State which could levy and collect the tax under the Central Act would be the State of Maharashtra and not the State of Gujarat. The Sales Tax Officer did not accept this contention and subjected the opponent's turnover of disputed sales to levy and collection of sales tax at the full rate of 10 per cent. He also imposed penalty upon the opponent in terms of section 36 (3) of the Bombay Sales Tax Act, 1959, read with section 9 (2) of the Central Act read with section 88 of the Gujarat Act of 1969. Against that order of the assessment and penalty the opponent preferred an appeal before the Assistant Commissioner of Sales Tax. What was contended before the Assistant Commissioner was that the levy and collection of tax on the turnover of Rs. 2,92,398. 84 and imposition of penalty was not proper and legal. It was also urged before the Assistant Commissioner that the first sale was really to the Bombay head office and for that reason the "c" forms of the Maharashtra State were furnished to the Indian Oil Corporation Ltd. The Assistant Commissioner did not accept the said contention as he found that the sales were reflected in the account books and registers maintained by the local office situated within the State of Gujarat and that no such entries were made in the account books or the registers maintained by the head office. He, therefore, confirmed the order passed by the Sales Tax Officer and dismissed the appeal. The opponent, thereafter, filed an appeal before the Tribunal.

(3.) IT was contended by the learned counsel appearing for the applicant that liability to pay sales tax in on the registered dealer selling the goods, and as the selling dealer in this case is registered within the State of Gujarat, only the Gujarat Government has the right to collect the tax. IT was further submitted that even according to proviso to section 9 (1) of the Act the tax could have been validly collected only in the State of Gujarat as the opponent which had effected the subsequent sales was required to produce declarations in connection with the purchase of goods and it could have procured such declarations only from the authority in the Gujarat State, since the goods were purchased in Gujarat. IT is not in dispute that as per the indents received from the head office of the opponent at Bombay the local office in Gujarat had furnished "c" forms obtained from the State of Maharashtra. At no point of time the department had raised any objection as regards the validity of those forms or the legality of such forms before any authority. IT is, for the first time, before this Court that the learned counsel for the applicant has tried to raise that point, and that too, indirectly by submitting that the opponent ought to have procured such declarations only from the authorities in Gujarat State as the goods were purchased in Gujarat.