STATE OF MADRAS Vs. SAKTHI AND COMPANY

JUDGEMENT

(1.) THE disputed turnover in this case is a sum of Rs. 88, 494. 33. THE above turnover relating to the assessment year 1965-66 was claimed by the assessee as intra-State sales. But the assessing authority considered the said turnover to be inter-State sales of automobile parts. THE assessee took the matter in appeal before the Appellate Assistant Commissioner contending that the said sum represented the second sales of automobile parts effected within the State of Madras which are exempted, and he questioned the finding of the assessing authority that the said sum represented inter-State sales. THE Appellate Assistant Commissioner however upheld the view of the assessing authority that the sales in question were inter-State sales.

(2.) ON a further appeal to the Tribunal, the assessee took an additional point apart from the points urged before the authorities below. He contended that even if the sales are taken as inter-State sales, in view of the principle laid down by the Supreme Court in State of Madras v. N. K. Nataraja mudaliar the second sales of automobile parts being not taxable under the madras General Sales Tax Act, 1959, the sales in question cannot be taxed under the Central Sales Tax Act. The revenue, however, contended that section 9 of the Central Sales Tax Act, 1956, when it refers to the local sales tax law should be taken to refer only to the law that existed on the date when the central Sales Tax Act was enacted, that is, the Madras General Sales Tax Act, 1939, and that under the provisions of that Act automobile parts are liable only to multi-point tax and, therefore, the turnover in question can be subject to tax under the Central Sales Tax Act at the rate of 2 per cent and 2 1/2 per cent, which was the rate applicable to the local sales of automobile parts as per the provisions of the Madras General Sales Tax Act, 1939. The Tribunal on the facts held that the transactions covered by the turnover in question are all inter-State sales and not local sales as alleged by the assessee. It then proceeded to consider the question whether the turnover in dispute could be brought to charge under the Central Sales Tax Act and if so at what rate. The tribunal agreed with the contention advanced by the revenue that section 9 of the Central Sales Tax Act attracted only the provisions of the Madras General sales Tax Act, 1939, and, therefore, the mode, method and manner of levy provided under the provisions of that Act alone has to be applied for assessment under the Central Act and automobile parts being subject to multi-point tax at the rate of 2 per cent and 2 1/2 per cent under the provisions of the Madras Act, there can be a levy on the disputed turnover at those rates under the Central Sales Tax Act.