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of <h1>Court allows revision cases, sales taxable under Sales Tax Act, remands specific cases for further investigation.</h1> The court allowed the revision cases, holding that the sales are taxable under the Hyderabad General Sales Tax Act as they fall within the purview of ... - Issues Involved:1. Interpretation of Section 2(k) of the Hyderabad General Sales Tax Act.2. Constitutionality of Section 11(2) of the Act.3. Applicability of the Sales Tax Laws Validation Act, 1956.4. Taxability of inter-State sales under Article 286 of the Constitution.5. Determination of whether respondents are non-resident agents or non-resident principals.Issue-wise Detailed Analysis:1. Interpretation of Section 2(k) of the Hyderabad General Sales Tax Act:The primary issue revolves around the interpretation of Section 2(k) of the Hyderabad General Sales Tax Act, which defines 'sale' as every transfer of property in goods by one person to another in the course of trade or business for cash, deferred payment, or other valuable consideration. Explanation 2 to this section states: 'Notwithstanding anything to the contrary in any other law for the time being in force, a transfer of goods, in respect of which no tax can be imposed by reason of the provisions contained in Article 286 of the Constitution, shall not be deemed to be 'sale' within the meaning of this clause.' The court held that the Explanation incorporates the whole of Article 286, thus authorizing the State to impose a tax on sales where goods are delivered for consumption within the State, even if the sale is inter-State in nature.2. Constitutionality of Section 11(2) of the Act:The judgment does not specifically address the constitutionality of Section 11(2) of the Act, as the main focus was on the interpretation of Section 2(k) and the applicability of the Sales Tax Laws Validation Act, 1956. However, the court's interpretation of Section 2(k) indirectly upholds the constitutionality of the Act by aligning it with the restrictions and permissions of Article 286 of the Constitution.3. Applicability of the Sales Tax Laws Validation Act, 1956:The court examined the Sales Tax Laws Validation Act, 1956, which validates the imposition of tax on inter-State sales during the specified period (1st April 1951 to 6th September 1955). The court confirmed that the impugned assessments fall within this period and are thus valid under the Act. The Validation Act saves all impositions made during this period, allowing the Revenue to levy tax on the sales in question.4. Taxability of inter-State sales under Article 286 of the Constitution:Article 286 prohibits State laws from imposing tax on sales or purchases taking place (a) outside the State or (b) in the course of import/export. The Explanation to Article 286(1) deems a sale to have taken place in the State where goods are delivered for consumption, even if the property in goods passes in another State. The court referred to previous Supreme Court judgments, including State of Bombay v. United Motors and Bengal Immunity Co. v. State of Bihar, to elucidate the scope of this Explanation. The court concluded that the Explanation, when incorporated into State Sales Tax Acts, authorizes the State to tax such sales. Thus, the sales in question, being delivered for consumption in Hyderabad, are taxable by the State.5. Determination of whether respondents are non-resident agents or non-resident principals:For T.R.Cs. Nos. 64 and 73 of 1958, the court remanded the cases to the Tribunal to investigate whether the respondents are non-resident agents or non-resident principals, as this determination affects their tax liability. Similarly, T.R.Cs. Nos. 68 and 76 of 1958 were remanded for investigation into whether the respondents are non-resident agents, as this point was not raised before the assessing authority or the Deputy Commissioner but was deemed relevant for a fair adjudication.Conclusion:The court allowed the revision cases, holding that the sales in question are taxable under the Hyderabad General Sales Tax Act as they fall within the purview of Explanation 2 to Section 2(k), which incorporates Article 286 of the Constitution. The Sales Tax Laws Validation Act, 1956, validates the imposition of tax on these sales. The court remanded specific cases for further investigation into the status of the respondents as non-resident agents or principals. The writ petitions were dismissed, with the petitioners allowed to raise other points in their appeals before the Deputy Commissioner.
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