BHARAT STEEL TUBES LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THESE six writ petitions are disposed of by this single order as a common question of law is involved in them, namely, whether the sales tax can be imposed on sale or purchase of declared goods at more than one stage and whether that stage is the first point of sale or last point thereof and such a sale is in respect of steel tubes ? In S. B. Civil Writ Petition No. 280 of 1984, the petitioner Bharat Steel Tubes Ltd. is a public limited company which manufactures steel tubes/pipes in Haryana but has its sale depot in various States including the State of Rajasthan at Dher-ka-balaji, Jaipur, and is a registered dealer under the provisions of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act of 1954") as well as the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act of 1956") and is being assessed by the Commercial Taxation Officer, E-Circle, Jaipur. The assessing authority for the assessment years 1978 and and 1979 issued prescribed notice under section 54 of the Act of 1954 asking the petitioner to show cause inter alia why the sale of the steel pipes effected by the petitioner to the registered dealers for resale against prescribed sales tax declaration form No. S. T. 17 amounting to Rs. 41,89,693. 33 be not assessed to tax at the rate of 4 per cent. and why the interest thereon be not levied in view of the decision reported in Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota [1981] 48 STC 466 (SC ). The petitioner filed reply and submitted that the tax on the sale of steel tubes is to be levied on the last point in series of sales to successive dealers and that the tax on declared goods can be levied only at one point as contemplated under section 15 (a) of the Act of 1956. The assessing authority levied tax in respect of sale on steel tubes amounting to Rs. 41,89,693. 33 sold by the petitioner against declaration form No. S. T. 17 and created a tax liability at 4 per cent. amounting to Rs. 1,27,587. 75 and further created liability of interest under section 11b of the Act of 1954 amounting to Rs. 1,22,496. 00 and served a demand notice. It is against this assessment order dated January 30, 1984 and the demand notice of the even date, that the present writ petition is filed.

(2.) IN S. B. Civil Writ Petition No. 285 of 1984, the petitioner M/s. Jotindra Steel & Tubes Ltd. is also manufacturer of steel tubes manufacturing of which is being carried on in Haryana, but sales office in Rajasthan is at E-98, Shastri Nagar, Jaipur. A similar position in Bharat Steel Tubes case arose and the assessing authority imposed the tax on steel tubes worth Rs. 6,48,663. 72 sold by the petitioner to the registered dealers in Rajasthan against declaration form No. S. T. 17 which created a tax liability of 4 per cent. amounting to Rs. 25,997. 00 and interest amounting to Rs. 24,960. 00.

(3.) IT is further submitted that the aforesaid position has further been made clear by notification annexure 1 where it has been categorically stated that it cannot be levied at more than one stage. IT has been further contended on behalf of Vijai Hari Agencies that the tax can be levied only on the registered dealer, to whom the sales have been made successively and again because the sale was made under section 5cc and section 5c and the purchases have been made from M/s. Bharat Steel Tubes Ltd. in whose assessment, full tax has already been levied; no tax could be imposed on this firm. In substance, the contention of the petitioner is that the assessing authority has acted illegally and in gross violation of the provisions of the Act and the notifications in levying the tax from both the seller and the purchaser and at both the points, and that this Court must interpret the provisions of law so that the legal position may be clarified so that the assessing authority may not tax the parties illegally. Reliance has been placed on the circular (annexure 1) dated February 17, 1983 issued by the Government of Rajasthan, Commercial Taxes Department, where the scope of he definition of "iron and steel" was clarified.