BHARAT SAW MILLS Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a reference made by the Board of Revenue under Section 440) of M. P. General Sales-Tax Act, 1958, to answer the following questions :-

(2.) THE assessee is a forest contractor and deals in timber, firewood and charcoal. He is a registered dealer under the Act. The assessee purchased a truck chasis for an amount of Rs. 52,000/- inclusive of sales tax from the registered dealer M/s Bhilai motors, Raipur, on 17-3-1970 and spent Rs. 6255. 41 for the truck wooden body. After using the truck for three years in his business, he sold the truck for an amount of Rs. 40,000/ -. In the gross turn over as well as in the taxable turn over, the assessing authority included the amount of Rs. 40,000/- and taxed the entire amount at the rate of 11% under the Act and 2% under the Turnover Tax. The assessee preferred first appeal before the Appellate Assistant Commissioner of Sales-Tax. The first appellate authority vide order dated 31-5-1976 held that the dealer had originally purchased a chasis and body was constructed subsequently and used thereafter. After using the truck, he sold the same and claimed deduction of sale price of the truck as a tax paid goods under section 2 (r) (ii ). Its claim was disallowed on the ground that the commodity which he purchased has not been sold in the same form. The original chasis had undergone a complete change and a different commodity has come into being which was ultimately sold after being used for a long time. Therefore, deduction under Section 2 (r) (ii) was not permissible in the circumstances of the case. The assessee then preferred a second appeal before the Tribunal i. e. Board of Revenue and by order dated 11-12-1976 it held that the truck was admittedly used in the assessee's business for about 3 years and in view of the earlier decision of the Tribunal in Bhopal Sugar Industries and Project automobiles, Bhilai vs. Commissioner of Sales Tax M. P. (1971)4 V. K. N. 144, there was no justification for interfering with the assessing authority's order and the order of the first appellate authority and the sale in question was exigible to tax. The sale price of the truck could not be allowed to be deducted under Section 2 (r) (ii) of the Act because after purchase of the chasis a body was constructed and the resultant commodity cannot, therefore, be treated as identical to the commodity which was purchased from the registered dealer. The assessee then filed an application under Section 44 (1) and so this reference has been made to answer the aforesaid two questions.

(3.) IT is not disputed by the learned counsel for the parties that both the questions are now covered by the decisions of this Court. This Court in Commissioner of Sales tax vs. Project Automobiles (42 S. T. C. 279) held as under :-