IMPEX INDIA LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The question which has been submitted to us in this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessees, is as follows :

(2.) The facts which have given rise to this reference are that the applicants purchased a machine, namely, a Blown Fold Drier (complete with electric motor), from the New Kaiser-I-Hind Spinning and Weaving Company Limited on 29th November, 1961, and they sold the said machine to the Raymond Woollen Mills Limited on 17th February, 1962. The New Kaiser-I-Hind Spinning and Weaving Company Limited, the assessees, and the Raymond Woollen Mills Limited were all of them at all material times registered as dealers under the said Act. The sale of the said machine by the said New Kaiser-I-Hind Spinning and Weaving Company Limited to the assessees was, however, not made in the course of their business as a dealer, for they did not carry on business in these machines but it was a casual sale made by them. In their return for the quarter ending 31st March, 1962, the assessees included the sale price of the said machine and paid general sales tax, but claimed to deduct under clause (ii) of section 8 of the said Act the amount received by them as purchase price in respect of the sale of this machine to the Raymond Woollen Mills Limited on the ground that they had resold the said machine after purchasing it from a registered dealer. The Sales Tax Officer accepted the said claim for deduction, and the assessees were assessed accordingly. Subsequently, the Sales Tax Officer reopened the said assessment and reassessed the assessees by disallowing the said claim for deduction. Against this order of reassessment the assessees went in appeal to the Assistant Commissioner, which appeal was dismissed. They preferred a further appeal to the Tribunal, which appeal also failed. The ground upon which the Sales Tax Officer in his order of reassessment disallowed the claim for deduction was that the New Kaiser-I-Hind Spinning and Weaving Company Limited was not a dealer in machines and, therefore, the purchase of the said machine by the assessees could not be considered as a purchase made by them from a registered dealer.

(3.) The short question which falls for our determination, therefore, is whether a deduction under clause (ii) of section 8 of the said Act can only be claimed where the goods, which have been resold by a registered dealer to another registered dealer, have been purchased by him from a registered dealer who deals in this class of goods or whether such deduction is permissible even though the sale of goods to the registered dealer claiming deduction is a casual sale. In other words, the question is whether once a dealer is registered, his registration certificate operates in respect of all goods sold by him or only in respect of those goods in which he carries on business as a dealer.