STANDARD MOTOR PRODUCTS OF INDIA LTD. Vs. THE STATE OF MADRAS, REPRESENTED BY THE JOINT COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Messrs Standard Motor Products of India Limited, the Petitioners herein, are carrying on business in motor vehicles, spare parts, tractors I. etc., at Madras. They were originally assessed for the year 1955 -56 under the Madras General Sales -Tax Act, 1939 on 30th September 1959 on a taxable turnover of Rs. 55,87,570 -10 -7 as against the turnover of Rs. 55,65,209 -9 -10 returned by them. Later, the Deputy Commissioner of Commercial Taxes, acting under Sec. 32 of the Madras General Sales Tax Act, 1959 proposed to revise suo motu the said assessment order. He considered that the order of the assessing authority was erroneous in that he had allowed exemptions on certain inter -State transactions for the period from 1st April 1955 to 6th September 1955. The Deputy Commissioner, after following the formalities, revised the original assessment and refixed the taxable turnover at Rs. 1,10,09,619 -8 -8. Out of the said turnover, Rs. 74,11,835 -5 -10 was subjected to tax at 9 pies in the rupee under Sec. 3(2) of the Madras General Sates Tax Act, 1939 and the balance of Rs. 35,97,784 -2 -10 was taxed at the rate of 3 pies in the rupee under Sec. 3(1) of that Act,

(2.) Against this revised order, the Petitioners filed an appeal before the Tribunal wherein they disputed a turnover of Rs. 53,83,891 -15 -11 representing inter -State Sates and also a turnover of Rs. 24,503 -7 -3 being the value of the scrap sold by them, which has been taxed at 9 pies in the rupee. The Tribunal went into details of each of the transactions and gave relief to the Petitioners in all cases where the goods involved in inter -state Sates had been consumed by the delivery State, treating those transactions as coming under the Explanation to Article 286(1)(a) of the Constitution. In respect of other inter -State transactions where the goods have not boon consumed in the delivery State but re -exported to other States by the buyer, the Tribunal took the view that by -virtue of explanation (2) to Sec. 2(b) of the Madras General Sates Tax Act, 1939 the State of Madras could bring to charge such transactions.

(3.) In this revision the Petitioners question not only the revised assessment on merits but also the jurisdiction of the Deputy Commissioner to revise the assessment. Therefore, we have to first of all deal with the jurisdiction of the Deputy Commissioner to reopen the assessment. The Petitioners also question the finding of the Tribunal that there has been no consumption in the delivery State in respect of the. disputed transactions. According to the Petitioners the goods consigned have been actually consumed by the buyers in the delivery States. Therefore one other question that arises for consideration is whether the Tribunal was right in holding that there has been no consumption in the delivery State in respect of the disputed transactions. Another question that arises for decision is as to whether the inter -State transactions in respect of which consumption has not taken place in, the delivery State could be brought to charge under the provisions of the Madras General Sates Tax Act.