MADHYA PRADESH AGRO-INDUSTRIES DEVELOPMENT CORPORATION LIMITED Vs. COMMISSIONER OF SALES TAX MADHYA PRADESH

JUDGEMENT

(1.) THIS is a petition under section 44 (2) of the Madhya Pradesh General Sales Tax Act, 1958, for directions from this Court to the Board of Revenue for drawing a statement of the case and for referring the questions framed in the application. The petitioner is a dealer and is registered as such under the Madhya Pradesh General Sales Tax Act, 1958. The petitioner was assessed by the Regional Assistant Commissioner of Sales Tax, Bhopal, on the sale of Rs. 54,40,391 for the assessment year April 1, 1972 to March 31, 1973 on account of sale of 40 K-7 Hanomag tractors to the Department of Agriculture of the State of Madhya Pradesh. According to the petitioner the Department of Agriculture of Government of Madhya Pradesh had originally placed an indent with the Director-General of Supplies and Disposals, Government of India, for import of 80 K-7 Hanomag tractors. The Government of India in its discretion had allotted 50 tractors to the State Government and they were imported from West Germany. As there was no budgetory provision for the purchase of tractors with the Department of Agriculture the department had contacted the petitioner - the Madhya Pradesh State Agro-Industries and requested them to take delivery of the tractors on behalf of the Agriculture Department and was asked to pay the price of the tractors, which was deposited by the petitioner in the treasury on the delivery of the tractors. Later on, out of 50 tractors of which the delivery was taken, 40 tractors were given to the Agriculture Department and an amount of Rs. 41,00,000 was received from the Department of Agriculture towards part price of the 40 tractors delivered to them in the assessment year 1972-73. According to the petitioner the delivery of 40 tractors in the circumstances narrated above does not tantamount to sale within the meaning of the Sales Tax Act and therefore the petitioner was not liable to be assessed for payment of the sales tax on this transaction. The contention raised by the petitioner did not find favour with the Regional Assistant Commissioner of Sales Tax and he was assessed to tax on the aforesaid transaction. Further appeal before Appellate Deputy Commissioner of Sales Tax and the second appeal before the Board of Revenue were rejected. There was an order passed in the assessment year 1973-74 wherein the Deputy Commissioner of Sales Tax has remanded the case back with the observation :

(2.) THE petitioner has sought reference on the following two questions : (1) Whether, on the facts and circumstances of the case, the Board of Revenue was justified in holding that the transfer of K-7 Hanomag tractors of Rs. 54,40,391 constitute the sales of the appellant-corporation when there was no agreement between the parties ? (2) Whether, on the facts and circumstances of the case, the Board of Revenue was justified in confirming the taxability of sales of K-7 Hanomag tractors when there was no element of sales and the transfer has been made under statutory direction ?

(3.) HAVING perused the order passed by the Board of Revenue dated August 17, 1985 (annexure E) we do not find any force in the contention raised by the counsel for the petitioner. The Board's decision does not rest on the basis that the Additional Commissioner has held the impugned transaction to be a sale transaction in the assessment year 1973-74; but Board has independently considered the questions of the alleged transaction of transfer of 40 tractors by the petitioner to the Agriculture Department and has held it, to be a transaction of sale, liable for the payment of sales tax. The findings are arrived at after appreciation of the material on record and on due application of mind. The reasons given by the Board for arriving at the conclusion that the alleged transaction was a sale transaction are, that the delivery of the tractors was taken by the petitioner-assessee; payment of the price of the tractors was made by the petitioner; the petitioner delivered 40 tractors to the Agriculture Department in the year 1972-73 and was paid an amount of Rs. 41,00,000 by the department. If there was a compulsion made by the State Government for taking delivery of the tractors and for the payment of the price for and on behalf of the State, nothing would have been easier for the petitioner, than to ask the State Government for orders or directions in writing, but no such document was filed. The reasons given by the Board of Revenue are based on material on record. The transaction in question for the assessment year 1972-73 was held to be a sale transaction on the basis of the reasons aforementioned by the Board and we do not find any infirmity or illegality in this finding.