COMMISSIONER OF SALES TAX Vs. KANTILAL SURESH CHAND

JUDGEMENT

(1.) PURSUANT to the application of the Sales Tax Commissioner under section 44 of the M. P. General Sales Tax Act (for short, "the Act"), the Tribunal (Board of Revenue) referred the undemoted question of law for answer arising out of the order dated August 8, 1986 passed by the Tribunal in second appeal No. 92-III of 1986.

(2.) THE facts lie in a narrow compass. The assessee deals in agarbattis. For the period Diwali 1979-80 assessment order was passed on June 24, 1981. After the order of assessment, the business premises of the assessee were inspected by the Flying Squad of the department on July 5, 1983. It was found that the assessee sold one matador vehicle bearing registration No. MPU-6135 on October 30, 1980 to Shri Harinarayan for Rs. 21,001. The assessee had not shown the sale price of this matador in its turnover. The assessment was thus, reopened under section 19 (1) of the Act. The assessee pleaded that the said matador was purchased by the assessee from Rameshchandra Basantilal, an unregistered dealer who had purchased the same from the registered dealer M/s. Mehta Motors, Indore after paying the tax. The assessee, thus, contended that the matador was tax-paid goods and no tax was leviable. The contention was not accepted and the sale price was assessed to tax at 10. 5 per cent. Penalty of Rs. 1,500 was also imposed under section 19 (1) of the Act. The copy of the order is annexure 2. The first appeal was partly allowed in that the penalty was reduced (annexure 3 ). The assessee then filed the second appeal before the Tribunal. The Tribunal set aside the first appellate order dated March 31, 1985 as well as the assessment order dated December 7, 1984 by order dated August 8, 1986 passed in appeal No. 92-III of 1986. Dissatisfied by the order, the department filed the application for reference. The Tribunal then stated the case and referred the question as above.

(3.) SECTION 2 (rr) of the Act defines the "tax-paid goods" - " 'tax-paid goods' in relation to a dealer means any goods specified in Parts II to VI of Schedule II which have been purchased by such dealer from a registered dealer inside the State of Madhya Pradesh within the meaning of section 4 of the Central Sales Tax Act, 1956 (No. 74 of 1956) except the goods the sale whereof by such registered dealer is exempted in whole from the payment of tax subject to the condition that such exemption is available only to such registered dealer. "