MARTIN BURN LIMITED Vs. STATE

JUDGEMENT

(1.) ACTING under section 21 of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi, the Chief Commissioner has referred three questions of law for our decision. The facts, out of which the questions arise, are these. The assessee-company, Messrs Martin Burn Limited, have their head office in Calcutta and branch offices in three other places including Delhi. The Delhi branch is registered as a dealer under the Bengal Finance (Sales Tax) Act, as extended to Delhi, and in respect of the assessment period, 1st November, 1951, to 31st March, 1952, and also for the financial years 1952-53 and 1953-54 returns of sales made by the Delhi office were filed with the assessing authority. It appears, however, that during that period certain sales had been made direct by the head office in Calcutta and also by some of the branches outside Delhi to certain parties in Delhi and, in consequence, the goods were actually sent to Delhi for consumption in Delhi. The assessing authority required that returns concerning all those sales should also be submitted and when those were submitted, the sales were added to the turnover of the Delhi branch and assessment made. The assessee objected to that course claiming that the sales made by the head office at Calcutta or by the branches outside Delhi were not liable to be assessed at Delhi, but this plea was overruled. The assessee then appealed but those appeals failed and so did the revision petitions taken first to the Sales Tax Commissioner and later to the Chief Commissioner.

(2.) IT was urged before the Chief Commissioner that the sales in dispute were inter-State sales and consequently not within the scope of the charging section of the Bengal Finance (Sales Tax) Act, as extended to Delhi. The learned Chief Commissioner, however, depending on the <ACT>Sales Tax Laws Validation Act, 1956</ACT>, held that those inter-State sales were also liable to be taxed in Delhi because, in his opinion, there was during the relevant time and within the meaning of the Validation Act a law in force in Delhi authorising the imposition of sales tax on such sales. This conclusion of the Chief Commissioner being unacceptable to the assessee, an application was made that the questions of law arising out of the dispute should be referred for decision to the High Court. Hence this reference. The questions of law are :

(3.) THE first question referred to us has arisen because the assessee's contention is that, in fact, there was in Delhi no law in existence imposing a tax on a sale in the course of inter-State trade or commerce, and, consequently, the Validation Act of 1956 has no application. The Bengal Finance (Sales Tax) Act, 1941, was extended to Delhi by a notification of Central Government and that notification was issued under section 2 of the Part C States (Laws) Act, 1950. The Bengal Finance (Sales Tax) Act defines "sale" in section 2 as "any transfer of property in goods supplied in the execution of a contract", and to this definition is added an Explanation which says :-