GUJARAT TRADING COMPANY Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) BY this reference under section 61 (1) of the Bombay Sales Tax Act, 1959 made at the instance of the assessee, the Maharashtra Sales Tax Tribunal ("the Tribunal") has referred the following question of law to this Court for opinion :

(2.) THE assessee had made an application dated January 19, 1979 to the Sales Tax Officer (Registration Branch), Bombay for grant of authorisation under section 24 of the Bombay Sales tax Act, 1959 ("the Act" ). In support of his application, the assessee pointed out that he had despatched one tanker of Palmolin oil to one M/s. Bansilal Gupta and Company at Jaipur for sale on consignment basis. The said tanker of oil was sent through M/s. Rajpal Bulk Carriers, a transport contractor, under transport receipt No. 9618 dated May 18, 1978. The said goods, according to the assessee, were sold on his behalf by his commission agent M/s. Bansilal Gupta and Co. , at Jaipur for Rs. 66,544. 37. In support of the above contention, the assessee produced a sale patti dated August 3, 1978, issued by the said agent at Jaipur. According to the assessee, he was entitled to get authorisation under section 24 of the Act as the turnover of sales of goods despatched by him to Rajasthan from the State of Maharashtra exceeded Rs. 30,000. The above application of the assessee for authorisation was rejected by the Sales Tax Officer on the ground that "the dealer had despatched the goods outside the State without making sale as defined in section 2 (28) of the Act". Aggrieved by the above order of the Sales Tax Officer rejecting the application of the assessee for authorisation, the assessee appealed to the Assistant commissioner of Sales Tax (Appeals) VIII, Bombay City Division, Bombay, who affirmed the order of the Sales Tax Officer and dismissed the appeal. While doing so, he held that the despatch of goods should be "as a result of contract", He observed : "in the instant case, admittedly, despatch of goods was not as a result of contract. When the goods were sold at Jaipur they were not within the State of Maharashtra. Consequently, according to the provisions of section 4 (2) of the Central Sales Tax Act, 1956 read with section 2 (28) of the Bombay Sales Tax Act, 1959, the sale is not within the meaning of section 2 (28) of the Bombay Sales Tax Act, 1959. Consequently, such transactions are not covered by the condition prescribed under section 24 of the Bombay Sales Tax Act, 1959 for grant of authorisation. " the assessee went in further appeal to the Maharashtra Sales Tax Tribunal ("the Tribunal" ). The tribunal was also of the same opinion that in order to get authorisation under section 24 of the act, the goods despatched outside the State "must be sold within the State of Maharashtra". The tribunal, therefore, confirmed the order of the Assistant Commissioner and the Sales Tax officer and dismissed the appeal. Hence, this reference at the instance of the assessee.

(3.) MR. B. C. Joshi, learned counsel for the assessee, submitted before us that the Tribunal has committed a manifest error in law in interpreting the section 24 of the Act. According to him, section 24 of the Act provides in clear and unambiguous terms that a registered dealer is entitled to apply for authorisation and to get the same if the turnover of the sales of goods which are exported by him from the State outside the territory of India or despatched by him from the State of Maharashtra to any place in India outside the State exceeds thirty thousand rupees. The expression "turnover of sales" appearing in section 24, according to the learned counsel, should be read in the context of the scheme and object of the said section and should be given a meaning consistent therewith. According to the learned counsel, by no stretch of imagination, it can be interpreted to mean turnover of sales made within the State or in the course of inter-State trade. The submission of the counsel for the Revenue Mr. R. V. Desai, on the other hand, was that the turnover of sales of a registered dealer of goods which are exported by him outside India or despatched outside the State would mean "turnover of goods sold by the dealer within the State and then exported outside India or despatched outside the State. "