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Issues: (i) Whether goods purchased after payment of State sales tax remained liable to Central sales tax when sold in the course of inter-State trade notwithstanding the plea of exemption under the State law; (ii) Whether the Court should answer questions raised by the assessee when no separate application complying with the reference provisions was made in respect of the part of the Board's order adverse to the assessee.
Issue (i): Whether goods purchased after payment of State sales tax remained liable to Central sales tax when sold in the course of inter-State trade notwithstanding the plea of exemption under the State law.
Analysis: The amended scheme of the Central Sales Tax Act introduced section 6(1A), which makes a dealer liable to tax on inter-State sales even where no tax would have been leviable under the State law had the sale taken place inside the State. The combined effect of sections 6(1A) and 8(2A) is that only general exemptions under the State law, such as those under sections 10 and 12 of the State Act, can escape Central sales tax. Exemptions available only in specified circumstances or subject to conditions do not amount to a general exemption. The earlier Supreme Court view in Yaddalam stood superseded by the retrospective amendment.
Conclusion: The sale of goods purchased after payment of tax was liable to Central sales tax. This issue was decided in favour of Revenue.
Issue (ii): Whether the Court should answer questions raised by the assessee when no separate application complying with the reference provisions was made in respect of the part of the Board's order adverse to the assessee.
Analysis: A party aggrieved by a distinct part of the Board's order must comply with the statutory requirements for obtaining a reference on that part. The Court applied the binding view that questions adverse to the assessee could not be referred merely because a reference had already been sought by the other side. In the absence of a proper application under the reference provision, the Court could not enlarge its advisory jurisdiction to grant the requested directions.
Conclusion: Questions (ii) and (iii) were not answered. This issue was decided against the assessee.
Final Conclusion: The reference succeeded on the substantive tax liability issue, while the assessee's additional procedural requests were declined for want of a proper reference application.
Ratio Decidendi: After the 1969 amendment, inter-State sales are taxable under the Central Sales Tax Act notwithstanding the absence of intra-State tax liability, except where a true general exemption under the State law exists; and a party seeking answer to an adverse issue in reference jurisdiction must independently satisfy the statutory preconditions for that reference.
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