STATE OF GUJARAT Vs. HARIDAS MULJI THAKKER

JUDGEMENT

(1.) THIS is a reference under section 69 of the Gujarat Sales Tax Act, 1969, at the instance of the Revenue. The period of assessment in question is : April 1, 1973 to March 31, 1974, April 1, 1974 to March 31, 1975 and April 1, 1975 to March 31, 1976. The opponent-assessee is a registered dealer under the provisions of the Gujarat Sales Tax Act, 1969 and also under the Central Sales Tax Act, 1956. The assessee is distributor of carbon dioxide manufactured by Sardar Carbonic Gas Co. , Bombay. The assessee received orders from its purchasers from Gujarat (Surat and Ahmedabad) for carbon dioxide cylinders or dry ice. The opponent-assessee used to place orders with the Bombay supplier which in turn used to send the carbon dioxide gas directly to the purchaser, as per the instructions of the opponent. The rate charged by the opponent from the purchasers was apparently higher than the rate charged by the Bombay supplier. As per the instructions of the opponent, the Bombay supplier took different transport receipts in the name of the purchasers and sent the goods directly to the purchasers. During the period in question certain goods were sent to Surat purchaser by motor transport and consigned to the Surat purchaser as consignee by name. In case of Ahmedabad purchaser, the goods were sent by rail. Railway receipts were taken out in the name of Ahmedabad purchaser. Transport receipts in the case of Surat purchaser were used to be handed over to the transporter for delivery to the purchaser along with the goods, whereas in the case of Ahmedabad purchaser, the railway receipts were sent by Bombay supplier directly by post to the purchaser at Ahmedabad. The goods were thus taken delivery of by the purchasers from the respective carriers. Freight in each case was borne by the purchasers because the goods were loaded by the Bombay supplier at Bombay as f. o. r. Bombay. Empty cylinders were returned by each purchaser to the Bombay supplier directly.

(2.) THE opponent considered the second sale between it and the purchasers at Surat and Ahmedabad as inter-State sale falling within the provisions of section 3 (b) of the Central Sales Tax Act, 1956. The sales tax authorities did not consider the second sale as inter-State sale, but considered the same as local sale in the State of Gujarat. After the assessments were made, accepting the contention of the assessee that the second sales were inter-State sales falling within section 3 (b), the matters were taken in suo motu revision by the Commissioner. The revision applications were heard by the Assistant Commissioner of Sales Tax. The Assistant Commissioner of Sales Tax did not accept the contention of the assessee and ordered that the sales be considered as local sales and assessments be made accordingly. For the purpose of deciding this reference it is not necessary to refer to the details as regards the quantity of sale. However, it may be noted that for all the three assessment periods, the total amount of tax in dispute came to Rs. 3,360, Rs. 4,768 and Rs. 8,605, respectively.

(3.) AFTER the Tribunal decided the revision, the State submitted application for making reference to this Court. The Tribunal, after drawing the statement of facts, has referred the following question for the opinion of this High Court : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sale by the opponent to the purchasers in the State of Gujarat was an inter-State sale within the meaning of section 3 (b) of the Central Sales Tax Act, 1956 and not a local sale made in the State of Gujarat, liable to tax under the Gujarat Sales Tax Act, 1969 ?" Our answer to the question is in affirmative, in favour of the assessee and against the State for the following reasons :