ASSESSING AUTHORITY COMMERCIAL TAXES OFFICER Vs. MADANMOHAN NANDMOHAN

JUDGEMENT

(1.) THIS reference matter (treated as revision petition) which was pending before the Rajasthan High Court stands transferred onto the file of this Tribunal under Section 15 of the Rajasthan Taxation Tribunal Act, 1995, for disposal.

(2.) THE facts are these. Travancore Cement Ltd., Kottayam (Kerala), manufacturers of white cement, despatched two consignments of cement to their agent, M/s. Mangal Chand Bhanwar Lal, Sardarshahar, Rajasthan under two railway receipts dated July 18, 1969 and November 3, 1969. M/s. Mangal Chand Bhanwar Lal sold these consignments of cement to the non -petitioner firm and for that purpose made the endorsement on the railway receipts. The sale consideration was Rs. 21,988.54 on which the sales tax was paid at the rate of ten per cent. The petitioner, the assessing authority, framed the assessment order for the year 1969 -70 on January 31, 1972 and concluded that the non -petitioner firm had paid sales tax at the wrong point. Instead, it should have paid tax on the sale of cement by it to its consumers. The non -petitioner firm preferred an appeal before the Deputy Commissioner (Appeals) who on February 17, 1973 found himself in agreement with the assessing authority on the question that the tax had been paid at the wrong point but at the same time concluded that whatever amount of tax had been paid must have been adjusted against the tax which would have been payable on the sale proceeds realised by the non -petitioner firm. The non -petitioner firm filed a revision petition before the Board of Revenue, Ajmer, which came to be listed before its Single Bench. On July 24, 1974 the Single Bench referred this matter for decision to the Division Bench because it considered that a legal point of seminal importance was involved in it. The Division Bench on December 5, 1975 accepted the revision petition and set aside the orders dated January 31, 1972 and February 17, 1973 passed respectively by the assessing authority and the Deputy Commissioner (Appeals). The assessing authority made an application before the Division Bench of the Board of Revenue praying that the matter be referred to the Rajasthan High Court. This application was rejected on October 7, 1976. Thereafter an application was moved before the High Court praying that the Board of Revenue be directed to refer the matter to it for decision. Such an order directing the Board of Revenue to make a reference was made by the High Court on December 23, 1978. Finally, pursuant to the directive of the High Court, the Board of Revenue made the reference wherein the following two questions were set out :

(3.) IT is not in dispute before us that two consignments of white cement were despatched through railways from Kottayam (Kerala) to Sardarshahar (Rajasthan) for delivery to M/s. Mangal Chand Bhanwar Lal. Before the consignments could reach Sardarshahar they were sold off to the non -petitioner firm and endorsements to this effect were made on the railway receipts. Finally the delivery of the consignments was taken by the non -petitioner firm on August 25, 1969 and November 29, 1969. In other words, the sale of the cement did take place at a time when the consignments were in transit from Kottayam to Sardarshahar. Whatever the factual position it is not the case of the department that it was a case of inter -State sale. If it had been a case of inter -State sale then the goods would have been made to suffer tax under the Central Sales Tax Act, 1956 ("C.S.T. Act"). In this case no tax under the C.S.T. Act has been paid. But the tax under the Rajasthan Sales Tax Act, 1954 ("R.S.T. Act") at ten per cent has been paid. Thus we are not to consider this case in the light of the provisions contained in Section 3 of the C.S.T. Act. If we consider it to be a case of inter -State sale then the tax under the C.S.T. Act would be payable in the State of Kerala in view of the principle of law laid down in Bharat Heavy Electricals Limited v. Union of India [1996] 102 STC 373 (SC), wherein it was laid down that where a question arises in which State is the tax leviable it shall be leviable in the State from which the movement of goods commences in view of the provisions contained in Section 9(1) read with Section 3(a) of the C.S.T. Act. It has been mentioned hereinabove that we are not concerned here with the matter under the C.S.T. Act because it is a case neither of the department nor of the non -petitioner -firm.