CHIRANJILAL DAGA Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE dispute in this case relates to a turnover of Rs. 44, 355.95 taxed at 2 per cent, which is claimed by the assessee as not liable to be taxed on the ground that it relates to second and subsequent inter-State sales which are exempt under section 6(2)(b) of the Central Sales Tax Act, 1956. THE assessee is a registered dealer under the Central Sales Tax Act, 1956 dealing in paints, turpentine, etc. For the year 1963-64 the assessee returned a taxable turnover of Rs. 545.90. THE assessing authority, however, after a check of the accounts of the assessee, determined the taxable turnover as Rs. 64, 065.02. In so doing, the assessing authority disallowed the assessee's claim for exemption in relation to the turnover of Rs. 44, 355.95 said to relate to second and subsequent inter-State sales coming under section 6(2)(b) of the Act, as being sales by transfer for documents of title while the goods were in movement from one State to another. THE assessee in support of his claim for exemption produced D forms from the subsequent buyer, that is, the Southern Railway, but no E-1 forms were produced.

(2.) AGGRIEVED against the assessment, the assessee filed an appeal before the Appellate Assistant Commissioner, which was however dismissed. There was a further appeal to the Tribunal where it was urged by the assessee that the assessing officer had not given any reasonable opportunity to produce E-1 forms and that as he had produced the necessary E-1 forms before the Appellate Assistant Commissioner, he should have allowed the exemption on the disputed turnover. The Tribunal took the view that notwithstanding the production of D forms and E-1 forms, as the sales were not shown to be to a registered dealer the claim for exemption under section 6(2)(b) cannot be sustained. The question in this case is, whether the view taken by the Tribunal is correct in the circumstances of the case.Admittedly, the buyer in respect of the said turnover is the Southern Railway, which is not a registered dealer as defined in section 2(f) of the Act though they are "dealers" under the definition in section 2(b). Section 6(2), as it stood in the relevant assessment year, specifically provides that where a sale in the course of inter-State trade or commerce has occasioned that movement of such goods from one State to another, or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under the Act. Therefore, unless the assessee establishes that the sale in respect of which exemption is claimed under sub-section (2) of section 6 is to a registered dealer, section 6(2) will not come into play. It is true that the assessee has produced D form certificate from the railway, the purchasing dealer. But such a certificate is relevant only for the purpose of the proviso to section 6(2)(b) and not for the purpose of sub-section (2). It is true that the assessee has filed E-1 forms before the Appellate Assistant Commissioner. But E-1 forms are also not relevant as they have been given only by some of the selling dealers and has no relevance on the question as to whether the buying dealer in the second or subsequent inter-State sale is a registered dealer or not.

(3.) IT is seen that subsequent to the decision of this court in T.C. No. 223 of 1967 (Subramaniam Brothers v. State of Madras.