BASF INDIA LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The applicant is a public limited company carrying on business of manufacturing and selling, among other things, leather chemicals and polystyrene products. The applicant is a registered dealer both under the Bombay Sales Tax Act, 1959, and the Central Sales Tax Act, 1956. During the assessment year 1968-69 covering the period from 1st July, 1968, to 30th June, 1969, the applicant sold, inter alia, certain goods worth Rs. 16,680, which were liable to the included in his turnover under the Central Sales Tax Act, 1956. These goods were returned by the purchaser to the applicant during the assessment year 1969-70 covering the period from 1st July, 1969, to 30th June, 1970. The applicant claimed a deduction of Rs. 16,680 in respect of the goods so returned from his turnover under the Central Sales Tax Act for the assessment year 1969-70. This deduction was allowed at the time of the assessment by the Sales Tax Officer by his order dated 7th March, 1975. The Assistant Commissioner, while scrutinising the assessment records, found that goods worth Rs. 16,680 which were returned during the assessment year 1969-70 were sold during the previous assessment year 1968-69. He, thereupon, revised the assessment order passed by the Sales Tax Officer for the assessment year 1969-70 and disallowed the deduction made by the Sales Tax Officer of this amount of Rs. 16,680. An appeal filed by the applicant from this order before the Deputy Commissioner of Sales Tax was dismissed. Thereupon the applicant filed a revision application before the Tribunal. The Tribunal dismissed the revision application. Thereupon, at the instance of the applicant, the following questions have been referred to us under section 61(1) of the Bombay Sales Tax Act, 1959, read with section 9, sub-section (2), of the Central Sales Tax Act, 1956, for our determination :

(2.) The claim for deduction which is the subject-matter of dispute in this reference is a claim which arises in respect of sales effected and goods returned under the Central Sales Tax Act, 1956. In this connection the relevant provisions of section 8A(1)(b) of the Central Sales Tax Act, 1956, are as follows : "Section 8A(1). In determining the turnover of a dealer for the purposes of this Act, the following deductions shall be made from the aggregate of the sale price, namely : (a) ............................................... (b) the sale price of all goods returned to the dealer by the purchasers of such goods, - (i) within a period of three months from the date of delivery of the goods, in the case of goods returned before the 14th day of May, 1966; (ii) within a period of six months from the date of delivery of the goods, in the case of goods returned on or after the 14th day of May, 1966 : Provided that satisfactory evidence of such return of goods and of refund or adjustment in accounts of the sale price thereof is produced before the authority competent to assess or, as the case may be, reassess the tax payable by the dealer under this Act; and (c) .......................... (2) Save as otherwise provided in sub-section (1), in determining the turnover of a dealer for the purposes of this Act, no deduction shall be made from the aggregate of the sale prices." This section deals with the manner in which turnover of a dealer has to be calculated and determined for the purposes of payment of tax under the Central Sales Tax Act. Turnover is defined under section 2(j) of the Central Sales Tax Act, 1956, as follows : "(j) 'turnover' used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period and determined in accordance with the provisions of this Act and the rules made thereunder." Under rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957, "the period of turnover in relation to any dealer liable to pay tax under this Act shall be the same as the period in respect of which he is liable to submit returns under the general sales tax law of the appropriate State". In the present case, therefore, the provisions of the Bombay Sales Tax Act, 1959, must be looked at in order to ascertain the period of turnover under the Central Sales Tax Act, 1956. Under section 32 of the Bombay Sales Tax Act, 1959, every registered dealer shall furnish a return for such period, by such dates and to such authority as may be prescribed. Under rule 22 of the Bombay Sales Tax Rules ordinarily quarterly returns are required to be filed. With the permission of the Commissioner, a dealer can file an annual return. In certain circumstances a monthly return is required to be filed. It is not necessary to go into the details of these provisions. The assessee in the present case was required, by virtue of these provisions to file quarterly returns of sales and purchases covered by the Central Sales Tax Act, 1956.

(3.) The form of return which is required to be filed by a dealer registered under the provisions of the Central Sales Tax Act is prescribed under the Central Sales Tax (Bombay) Rules, 1957. Under rule 5 of these Rules every dealer is required to file a return in form III(B) in respect of each period for which his turnover is required to be determined under rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957. Under form III(B), as prescribed under the Central Sales Tax (Bombay) Rules, 1957, the first column requires the assessee to state the period for which the return is being filed. In the column relating to deductions, column 3, item 2, requires the following to be mentioned : "Amounts repaid to purchasers whether by way of refund in cash or adjustment in accounts in respect of goods returned by the purchasers, on or after the 14th day of May, 1966, within a period of six months from the date of delivery of the goods." Against column 4 the balance - total turnover of inter-State sales is to be shown. Column 8 refers to the total tax payable. Column 9 requires the amount of tax paid to be stated and column 10 is in respect of balance due/excess paid, if any. Thus a dealer registered under the Central Sales Tax Act, 1956, is required to file a quarterly return in respect of his turnover for that quarter in form III(B) as prescribed under the Central Sales Tax (Bombay) Rules, 1957. In this form he can claim a deduction in respect of the goods returned to him by his purchasers within a period of six months from the date of delivery of the goods in the case of goods returned on or after 14th day of May, 1966. After calculating his turnover he has to show the amount of tax paid or excess payment of tax.