COMMISSIONER OF SALES TAX Vs. BHAGWANDAS RIKHIRAM

JUDGEMENT

(1.) THE Board of Revenue has referred the following question at the instance of the Commissioner of Sales Tax, Madhya Pradesh :

(2.) THE assessee is a dealer in grains. For the purposes of his business he purchases gunny bags (bardana) and sells them along with grain. During the assessment period the assessee had purchased bardana worth Rs. 86,463. 31 on which State tax was already paid. In the course of the business he sold along with the grain bardana worth Rs. 36,348. 19 in the course of inter-State transactions. On the sales of bardana worth Rs. 36,348. 19 the assessee was taxed at 7 per cent, under the Central Sales Tax Act, as he failed to produce 'c' forms from the registered dealers from whom the bardana was purchased. The plea of the assessee was that as the bardana was already subjected to State tax at the first point of sale, it could not have been assessed on the second sale in the State and that being the position he could not be made liable to pay sales tax on the sale of bardana even when the sale was in the course of inter-State transactions. In support of his submission the assessee had relied on the decision of the Supreme Court in State of Mysore v. Yaddalam Lakshminarasimhiah Setty and Sons [1965] 16 S. T. C. 231 (S. C. ). In that case, on the interpretation of Sections 6, 8 and 9 of the Central Sales Tax Act (as they stood before their amendment in 1969) the Supreme Court had come to the conclusion that no Central sales tax was payable on the sales by an assessee if, for any reason, under the State Act the sales of those goods were exempt from the State tax ; the failure of the assessee to produce 'c' forms in relation to such sales was, therefore, immaterial.

(3.) THE assessing authorities, however, distinguished the Supreme Court decision and imposed the Central sales tax at 7 per cent. , as no 'c' forms were produced by the assessee. When the assessee appealed to the Board of Revenue, it came to the conclusion that the Supreme Court case was fully attracted in the case and upheld the contention of the assessee.