1968 (12) TMI 88 - HC - VAT and Sales Tax

Petitioner challenges sales tax liability on no-profit grounds, Tribunal's dismissal flawed. Appeal remitted for fresh consideration.

The charitable institution, the petitioner, contested liability for sales tax on ready-made garment turnover, arguing no profit motive negated sales. The ... - Issues:1. Whether the petitioner, a charitable institution, is liable to pay sales tax on the turnover from supplying ready-made garments.2. Whether the Sales Tax Appellate Tribunal erred in dismissing the appeal based on procedural grounds related to the assessment order and tax deposit.Analysis:1. The petitioner, a charitable institution, contended that as it supplied ready-made garments without a profit motive, there was no sale and hence no taxable turnover. The Assistant Commissioner and the Sales Tax Appellate Tribunal rejected this argument without proper investigation. The Tribunal dismissed the appeal without adequately discussing the evidence regarding the existence of sales. However, the Tribunal's decision was flawed as the assessment made by the Assistant Commercial Tax Officer was appealable under section 20 of the Mysore Sales Tax Act, irrespective of whether it was made by consent. The Tribunal's failure to delve into the sustainability of the no-sales contention was a critical error, leading to the revision petition.2. The Sales Tax Appellate Tribunal based its dismissal of the appeal on two grounds. Firstly, it held that since the assessment order was made by consent, there could be no appeal. Secondly, it stated that the appeal could not be entertained as the petitioner did not deposit the tax payable according to its turnover before appealing to the Assistant Commissioner. However, the Tribunal's reasoning was flawed. Section 20 of the Act allows appeals from assessments made under specific sections, including the one under which the petitioner's assessment was conducted. The Tribunal incorrectly interpreted the provision regarding the deposit of tax, as it applies only when the appellant admits to a part of the tax being due, which was not the case here. The Tribunal's decision was set aside, and the appeal was remitted for a fresh disposal on its merits, emphasizing that the entire order of assessment was under challenge, and no admitted liability existed at the appeal stage.