NANJI KALUBHAI OIL MILL Vs. STATE OF GUJARAT

JUDGEMENT

(1.) AT the instance of the assessee, in this reference under section 69 of the Gujarat Sales Tax Act, 1969, the following question of law has been referred to us for our opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that 24 transactions of the applicant amounting to Rs. 8,77,064 were really inter-State sales of the applicant and not consignment sales ?"

(2.) THE facts leading to this reference, shortly stated, are as under : THE assessee is a partnership firm, having an oil mill at Gondal for the manufacture and sale of groundnut oil and oilcakes, and is registered as a dealer under the Gujarat Sales Tax Act, 1969, as well as the Central Sales Tax Act, 1956. It appears that the Sales Tax Officer had paid a surprise visit to the place of business of the applicant and seized the account books and other papers. He then proceeded to assess the assessee for S. Y. 2027 under the Central Sales Tax Act, 1956. In the course of the assessment, the Sales Tax Officer considered certain transactions amounting to Rs. 8,77,064 as inter-State sales, which, according to the assessee, were consignment transactions. THE Sales Tax Officer, therefore, levied tax thereon at the rate of 10 per cent. under the Central Act. THE assessee, therefore, carried the matter in appeal before the Assistant Commissioner of Sales Tax contending, inter alia, that the transactions in question were consignment sale and not inter-State sales as held by the Sales Tax Officer. In support of this contention, the assessee had produced the sale list of the various transactions in question and affidavits of the persons from Rajasthan, except that of M/s. Lamipat Pahadia to whom the goods were despatched. THE assessee also produced entries from its trading books to show that the transactions in question were not inter-State sales. THE Assistant Commissioner rejected the contention as he was not satisfied by the evidence produced in support thereof with the result that the appeal was dismissed. THE assessee, therefore, carried the matter in further appeal before the Gujarat Sales Tax Tribunal. THE Tribunal reappraised the entire evidence and reached the conclusion on appreciation thereof that the assessee appeared to have joined hands with one party from Rajkot to whom the goods must have been sold for being despatched to the destination outside the State, as per the instructions of the said party from Rajkot, and the goods were accordingly despatched by the assessee to the dealers in Rajasthan in performance of the said contract for sale. THE Tribunal also found that the despatch instructions were integral parts of the contract for sale in pursuance of which the goods had moved from the State of Gujarat to the various places in Rajasthan. THE Tribunal ultimately, therefore, held that all the 24 transactions noted in the exercise books seized from the place of business of the assessee were inter-State sales and rejected the contention of the assessee of they being consignment sales. THE Tribunal, therefore, dismissed the appeal. At the instance of the assessee, the question set out above has been referred to us for our opinion.

(3.) IN Damodar Valley Corporation v. State of Bihar ([1961] 12 S. T. C. 102 (S. C. ).), the question referred to the High Court was whether the transaction between the parties was merely a contract of hiring or a sale within the meaning of section 2 (g) of the Bihar Sales Tax Act, 1947. The High Court has found that the transaction in question was amounting to sale within the meaning of the said section. IN appeal before the Supreme Court, a further question was sought to be raised, whether the appellant corporation was a dealer or not. The court, speaking through Sinha, C. J. (as he then was), held that it is well-settled that the High Court is acting only in an advisory capacity and it cannot go beyond the question referred to it by the Board of Revenue.