STATE OF ORISSA Vs. ROLTA MOTORS LTD

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been referred to this Court for adjudication by the Orissa Sales Tax Tribunal (hereinafter referred to as "the Tribunal") under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act" ).

(2.) FORM the statement of facts as drawn up by the Tribunal the following facts are apparent : M/s. Rolta Motors Ltd. (hereinafter referred to as "the assessee") caries on business in Maruti vans, cars and their spare parts and accessories. It is the authorised dealer of Maruti Udyog Limited, a Government of India Undertaking. While making assessment for the assessment year 1985-86, the Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar (hereinafter referred to as "the assessing officer"), observed that the assessee should have included the sale turnover of 46 Nos. of Maruti vans and 11 Nos. of Maruti cars, which were sold to different customers under direct billing system by the aforesaid Maruti Udyog Limited. According to the assessee, the said sales were inter-State sales between Maruti Udyog limited and the ultimate purchasers, it had no connection with the customers, and as such the question of payment of any tax under the Act did not arise. This contention did not find acceptance by the assessing officer, who was of the view that the property in the goods passed to the customers inside the State of Orissa when actual physical delivery was taken at the end of the assessee and the transaction between the supplier and the assessee appeared to be that between the principal and its agent. In appeal, the Assistant Commissioner of Sales Tax upheld the conclusion. The matter was carried in second appeal before the Tribunal, which held that the agreement between the supplier and the assessee, application for purchase of vans/cars, allotment order, intimation letters, authorisation letters to transfer the cars/vans, excise gate pass, invoice and other documents clearly established that there were inter-State sales between the supplier and the customers and merely because the assessee had taken delivery of the vehicles that could not change the character of the transactions. Accordingly, it was held that the transaction constituted inter-State sales as described in section 3 of the Central Sales Tax Act, 1956 (in short "the Central Act"), and the assessee had no liability to pay any tax on the transactions in question. The department moved for a reference under section 24 (1) and formulated three questions. The Tribunal has referred the question as quoted above for adjudication.

(3.) THE department's stand was that the assessee having intervened at an intermediate stage, there was a break in the link of inter-State sale and therefore, the assessee was deemed to have made intra-State sales. The Tribunal has already considered this aspect and has found that mere presence of the assessee at an intermediate stage is of no consequence. In English Electric Company of India Ltd. v. Deputy Commercial Tax Officer [1976] 38 STC 475, the Supreme Court observed as follows :