STATE OF GUJARAT Vs. PREMIER AUTO ELECTRIC LTD

JUDGEMENT

(1.) IN this reference made by the Gujarat Sales Tax Tribunal (hereinafter referred to as the "tribunal") at the instance of the State of Gujarat under section 61 of the Bombay Sales Tax Act, 1959 (hereinafter called the "act"), the following question has been referred for the opinion of this Court : " Whether, on the facts and in the circumstances of the case and in view of the directions of the Gujarat High Court in Sales Tax Reference No. 5 of 1974 decided on 13th August, 1974, the Tribunal was justified in not deciding the rate of tax to be levied on the sales of scrap batteries in general and in holding that the rate of tax on the scrap batteries sold to the opponent is 10 per cent under entry 42b of Schedule C to the Bombay Sales Tax Act, 1959, inasmuch as the department while making the assessments of the vendors of the opponent had levied the tax at the rate of 10 per cent on their sales and for which the vendors of the opponent had already issued certificates ?"

(2.) IN order to answer the question, it would be necessary to set out a few facts.

(3.) AS against the aforesaid contention of the assessee, the submission of the revenue was that this Court, having given a specific direction to the Tribunal to determine the rate of tax on the scrap batteries purchased by the assessee, the Tribunal should decide the said question independently of the fact that during the course of the assessment to sales tax of the vendors of the assessee, the concerned Sales Tax Officers had found that the sales effected in favour of the assessee were liable to bear sales tax at the rate of 10 per cent. The Tribunal considered these rival submissions made before it and recorded its finding thereon in the following words : " In our view, this submission of the learned Government agent cannot be accepted. While deciding the question as to whether the scrap batteries in the present case were liable to tax at the rate of 10 per cent or 6 per cent, we cannot ignore that fact that the concerned Sales Tax Officers have imposed sales tax at the rate of 10 per cent on the sales made to the appellant by the vendors while making the assessment thereof, because that fact, in our view, would preclude the department from the contending that the rate of tax on scrap batteries should be 6 per cent and not 10 per cent. When at the sale side, the tax had been imposed and realised at the rate of 10 per cent, it is not open for the department to say when set-off is claimed by the purchaser that the tax leviable is at 6 per cent and not 10 per cent. . . . . . Here, the position was that, at the time of assessments of the vendors of the appellant, the concerned Sales Tax Officers had held that the scrap batteries would fall under entry 42b of Schedule C liable to tax at the rate of 10 per cent and it is at the time when the set-off was claimed that the Sales Tax Officer who made the assessment of the appellant held that the scrap batteries would fall under entry 22 of Schedule E to the Act. Thus, in the present case, there are different conflicting views of different Sales Tax Officers about the rate of tax on scrap batteries. In our view, it is not open for the department to hold that the batteries sold to the appellant were liable to tax at the rate of 6 per cent when actually the sales tax at the rate of 10 per cent has been realised from the vendors thereof"