QUALITY ENTERPRISES Vs. ADDITIONAL DEPUTY COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) This writ petition is for the issue of writ of certiorarified mandamus to quash the proceedings of the respondent, dated 19.10.1994.

(2.) In the affidavit filed in support of the petition, it is stated as follows: The petitioner is a partnership firm. It is an assessee under the Pondicherry General Sales Act, 1967. The petitioner company is a distributor for the goods manufactured by M/s. Space Tech Plastics Private Limited in Tamil Nadu who have a local branch office and godown at Pondicherry. The petitioner company buys the products at Pondicherry. Space Tech Plastics raises invoices of sale at Pondicherry, effects deliveries and collects prices at Pondicherry. The petitioner does not place orders directly to the factory at Tamil Nadu. Manufacturers Collect local tax of 3% under Pondicherry General Sales Tax Act and the petitioner is a second seller. Accordingly, the petitioner claims second sale exemption which was granted by the authorities at Pondicherry. While so, the petitioner company was shocked to know that its sales at Pondicherry was treated as inter -state sales at Pondicherry by the Tamil Nadu Government authorities. Therefore, there is a threat of assessment at 10% under penalty thereon in the absence of "C" declaration. Show cause notice was also sent to the petitioner. Two instances referred to in the show cause notice relate to the amounts paid by the petitioner to Space Tech Plastics Private Limited for the purchases already made and they did not relate to any advance payment against future order. In some isolated instances, the petitioner forwarded Form "F" declaration. The manufacturers were advised that unless they filed "C" declaration under protest, the authorities will levy higher tax. The manufacturers assured that they will challenge the order relating to the nature of transaction. Therefore, the request of the petitioner was to assist them in reducing the liability; the liability may be around Rs.46 lakhs. The petitioner as purchaser was convinced that the issue of "C" Form under threat of huge liability to the seller will not compromise either the purchaser/petitioner or the character of local sales effected by the branch. Initially, the petitioner refused to accept the request of the Space Tech Plastics Private Limited as its purchases were only within the State of Pondicherry. Therefore, the petitioner requested for issue of "C" Forms. The respondent rejected the application for issue of "C" Forms for the purchases effected at Pondicherry, during the past three years, from 1991 to 1993 on the ground that they were all local purchasers. The petitioner is bound to come to the rescue of the manufacturers with whom they have business transaction from 1984. Therefore, they are constrained to come before this Court for relief. The respondent authority cannot brush aside the serious threat of assessment by the Commercial Tax Officer, Pondicherry against the sales of Space Tech Plastics Private effected at Pondicherry which is erroneously treated as inter -State sale of Tamil Nadu. The issue of "C" Form in such circumstances is only to render assistance to the suppliers and it cannot be treated as impermissible. The respondent is only an agent of the Central Government in the matter of issuing declaration in Form "C" and cannot ignore the notice dated 31.8.1994 to the manufacturers by Tamil Nadu. The petitioner repudiate the notice of the Commercial Tax Officer, Ponneri as erroneous in law. In fact the goods moved to Pondicherry are unascertained goods and being standard goods capable of sale to anybody. The petitioner accordingly treated the sale as second sales. Petitioner company says that there is no loss of revenue to the respondents. Once single point tax is paid in Pondicherry, the goods cannot suffer further tax and the Union Territory of Pondicherry cannot demand tax on the same goods. Once the tax is paid to the respondent, the respondent is bound to give "C" Form.

(3.) In the counter, it is stated that the writ petitioner is a dealer registered under the Pondicherry General Sales Tax as well as Central Sales Tax Act. M/s. Space Tech Plastics Private Limited is a Madras based firm having a branch in Pondicherry and its branch is also duly registered under the Pondicherry General Sales Act. The petitioner is under no legal obligation to furnish "C" form declaration in respect of purchases of P.V.C. Pipes from M/s. Space Tech Plastics Private Limited, Pondicherry. This respondent is not aware of the circumstances under which the Commercial Tax authority in Tamil Nadu proposes to assess the turnover of M/s. Space Tech Plastics Private Limited. The Pondicherry authorities have a right to reject the application of the petitioner seeking supply of "C" Forms since the transaction between them is purely commercial under local law. The provisions of the Central Sales Tax Act do not provide for issue of "C" declaration form in respect of the sale transaction within the Union Territory of Pondicherry. The petitioner has no locus standi in respect of the assessment made by the tax authorities in Tamil Nadu in respect of M/s. Space Tech Plastics Private Limited. The petitioner cannot help the said company by issuing the "C" form declaration contravening the provisions of Central Sales Tax. Therefore, the writ petition is devoid of any merits and is liable to be dismissed.