NARBADA ICE FACTORY Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) IN this reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958 at the instance of the respondent-assessee, the following questions of law arising out of the Tribunal's order have been referred to this Court for decision :

(2.) A few more facts may be noted. At Jabalpur, there are three ice manufacturing factories, including the applicant. Long before the Madhya Pradesh General Sales Tax Act, 1968 came into force, they constituted a partnership in the name and style of "jabalpur Ice Distributing Agency" when the C. P. and Berar Sales Tax Act, 1947 was in force. This partnership itself is a dealer registered under the Sales Tax Act. The ice produced by these three constituents to this partnership firm which acting as a distributing agency sells it to the consumers. To this distributing agency ice is sold at quite a low price and then is ultimately sold to the consumers at a higher price. Earlier under the C. P. and Berar Sales Tax Act as the tax was on the last point, it is this distributing agency whose sales were taxed. The position, however, is different under the present Act where tax is at the first point. Apparently by this arrangement of sale to the distributing agency and by it to the consumers at a higher price, the three constituents forming the partnership are in a position to avoid sales tax to certain extent. It appears that influenced by this factor the sales tax authorities, except the Appellate Assistant Commissioner, have resorted to Section 18 (7) of the Act while assessing the sales by the applicant.

(3.) SECTION 18 (7) of the Madhya Pradesh General Sales Tax Act, 1958 reads as follows :