NAND LAL HIRA LAL Vs. PUNJAB STATE

JUDGEMENT

(1.) THESE four references (G. S. T. Rs. Nos. 1, 2, 3 and 4 of 1962) made by the learned Financial Commissioner under Section 9 (3) of the Central Sales Tax Act (Act 74 of 1956) read with Section 22 (1) of the Punjab General Sales Tax Act, 1948, raise the same question of law and have, therefore, been heard together. Main arguments have been addressed in G. S. T. Rs. Nos. 2 and 3; Shri Gandhi has, however, supplemented in G. S. T. R. No. 1 arguments addressed by Shri Sibal in the other two cases.

(2.) THE four questions referred by the learned Financial Commis--sioner may here be reproduced:- (1) While not extending the Central Sales Tax Act No. 74 of 1956 to the State of Jammu and Kashmir or in other words not enacting that Act for the State of Jammu and Kashmir, did the Parliament by that Act formulate even its first principle of deter mining, when a sale or purchase of goods takes place in the course of inter-State trade or commerce, qua transaction of sale between dealers of other States of rest of India with those of the State of Jammu and Kashmir ? (2) Whether by laying down in Section 1 (2), it extends to the whole of India except the State of Jammu and Kashmir, is it not meant that none of the principles formulated by this Act and the provisions of the sections apply to inter-State transactions by dealers of other States with those of the State of Jammu and Kashmir or in other words the territory of the State of Jammu and Kashmir is excluded from the map of India for the purposes of this Act, to the remaining States of which India for their inter-State transac tions inter se the Act only applies ? (3) Whether sales by the dealers applicants during the period commencing from 1st July, 1957, and ending with 12th March, 1958, to dealers of the State of Jammu and Kashmir and consequent despatch there of goods to that State was not in the course of export of goods to a place outside that India to the inter-State transactions in between whose States the Central Sales Tax Act then did apply ? (4) Whether the tax amounting to Rs. 12,188. 75 np- levied under the Central Sales Tax Act, 74 of 1956, on the dealers applicants for sales effected by them to the dealers of State of Jammu and Kashmir during the period commencing from 1st July, 1957, and ending with 12th March, 1958, was right, legal and just when the Central Sales Tax Act did not extend to the Stale of Jammu and Kashmir and whether its imposition and collection for that period was neither right nor legal nor just ?

(3.) IT may be pointed out that before the learned Financial Commissioner it was admitted by the learned Advocate for the petitioners that there was a sale of the goods in question made by the dealers of Amritsar and that the sale did occasion the movement of goods from the State of Punjab to the State of Jammu and Kashmir. The short question which is canvassed before us, therefore, is whether under the Central Sales Tax Act it is permissible to impose sales tax on a transaction of sale or purchase which takes place in Amritsar but occasions the movement of the goods from the Punjab State to the State of Jammu and Kashmir. For the purpose of understanding the argument and giving our answer to the questions referred, it is not necessary to give any further details about the gross turnover or the date of assessment or any other details. Suffice it to say that sales were made by dealers at Amritsar prior to the amendment in the Central Sales Tax Act (hereinafter called the Central Act) effected by Act 5 of 1958, whereby the words "except the State of Jammu and Kashmir" were omitted from Section 1 (2) of the said Act, thus extending the application of that Act to the State of Jammu and Kashmir as well.