1973 (5) TMI 94 - HC - VAT and Sales Tax

Court clarifies inter-State sales tax exemption under Bihar Sales Tax Act

Commissioner of Commercial Taxes, Bihar Versus Bhag Singh Milkha Singh

Commissioner of Commercial Taxes, Bihar Versus Bhag Singh Milkha Singh - [1974] 34 STC 535 (Pat) Issues Involved:1. Revisional power of the Tribunal to entertain and examine additional evidence.2. Legality of documents considered by the Tribunal.3. Determination of sales as inter-State trade without a written contract.Issue-Wise Detailed Analysis:1. Revisional Power of the Tribunal to Entertain and Examine Additional Evidence:The first issue concerns whether the Tribunal, under the Bihar Sales Tax Act, 1959, has the authority to entertain and examine evidence not produced before the assessing authority or at earlier stages. The court clarified that the scope, nature, and extent of the High Court's jurisdiction under section 33 of the Act are similar to those under section 66 of the Income-tax Act, 1922. The Supreme Court's propositions in Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd. were cited to establish that only questions raised before or decided by the Tribunal can be referred to the High Court. The first two questions were neither raised before nor decided by the Tribunal, thus not arising out of its order. The court emphasized that if parties do not raise certain contentions before the Tribunal, no question can be referred to the High Court. Additionally, no objection was raised by the Commissioner when the assessee presented documents during the Tribunal's proceedings, thus these questions do not need to be answered.2. Legality of Documents Considered by the Tribunal:The second issue questioned whether the documents relied upon by the Tribunal were brought on record and considered in accordance with the law. The Tribunal had relied on declarations in form C, credit memos, and check-post declarations. The Tribunal found no material to doubt the genuineness of these documents, which were not controverted by the department. The court reiterated that since no objection was raised by the Commissioner when these documents were produced, the first two questions do not arise out of the Tribunal's order and do not need to be answered.3. Determination of Sales as Inter-State Trade Without a Written Contract:The third issue addressed whether the Tribunal correctly held that sales of timber worth Rs. 49,418.29 were in the course of inter-State trade and commerce, despite the absence of a written contract obligating the assessee to transport the goods to West Bengal. The Tribunal found that the sales involved a series of integrated activities leading to the transport of goods outside Bihar, based on circumstantial evidence including phone orders, credit memos indicating truck numbers, and check-post declarations. The court cited precedents, including State of Travancore-Cochin v. Bombay Co. Ltd. and Ben Gorm Nilgiri Plantations Co. v. Sales Tax Officer, to establish that sales occasioning the transportation of goods outside the State qualify as inter-State trade. The court held that an obligation to transport goods outside the State could arise from statute, contract, mutual understanding, or the nature of the transaction, and could be inferred from circumstantial evidence. Thus, the Tribunal's finding that the sales were inter-State trade was justified, and the third question was answered in favor of the assessee.Conclusion:The court refrained from answering the first two questions as they did not arise out of the Tribunal's order. The third question was answered affirmatively, holding that the Tribunal rightly concluded that the sales were in the course of inter-State trade and commerce, exempt from tax under the Bihar Sales Tax Act, even without a written contract. The assessee was entitled to costs, with a hearing fee assessed at Rs. 100.