ASSISTANT SALES TAX OFFICER Vs. CENTRAL STORES

JUDGEMENT

(1.) VIDE order dated September 29, 1998, the Division Bench of this Court made a reference for adjudication of a question "whether neck-ties fall under entry 26, Part IV of Schedule II or not" and, therefore, this matter has been laid before us for adjudication.

(2.) A few facts need to be stated for unfolding the topic and the point for adjudication. Central Stores, through proprietor Rakhabchand, R/o. Rampurawala Building, M. G. Road, Indore, trades in business of sale and purchase of ready-made garments including neck-ties and other general goods being a registered dealer under the M. P. General Sales Tax Act, 1958 (for convenience hereinafter referred to as "sales Tax Act" ). The Assistant Sales Tax Officer, Circle VI, Indore, purporting to act under Section 19 (1) of the Sales Tax Act issued notice for reopening of the assessments done previously and for levying the tax at 12 per cent instead of 3 per cent on sale of neck-ties. An additional demand of Rs. 23,409 was made against Central Stores. Being aggrieved by the said act, order, notice, an appeal was preferred by Central Stores. It was pending for disposal for sufficient long time, and was not decided within reasonable time and Central Stores received fresh notices for demand of tax at 12 per cent. Hence Central Stores filed a writ petition bearing No. M. P. 1987 of 1993. It was finally heard and decided by learned Single Bench on July 24, 1995. The learned single Judge held that "the neck ties would be included as ready-made garments only and would be liable to be taxed accordingly". It further held on merit of the said writ petition that for long number of years, the Assistant Sales Tax Officer was treating neck-ties as ready-made garments and was assessing as such. Hence all of a sudden, he cannot be permitted to treat neck-ties as "something different than ready-made garments". The learned single Judge quashed the said notices, orders of reassessment initiated against Central Stores by allowing the said writ petition.

(3.) BEING aggrieved by the said judgment/order of learned single Bench, Assistant Sales Tax Officer, Circle VI, Indore and others preferred Letters Patent Appeal which is numbered as L. P. A. No. 109 of 1995. When the said appeal was being heard, the learned counsel for State brought two judgments to the notice of the Division Bench hearing the L. P. A. : (i) Commissioner of Sales Tax, M. P. v. Central Stores, Indore reported in (1981) 14 VKN 305 and (ii) Commissioner of Sales Tax v. Wearwell Dresses, Gwalior, reported in (1980) 13 VKN 361. These two judgments reflected conflicting views and, therefore, the Division Bench hearing the appeal referred the question mentioned above for adjudication.