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of <h1>Court affirms Central sales tax liability for transactions with nonresident principals.</h1> <h3>Bhavani Shanker Trading Co. Versus Commissioner of Commercial Taxes</h3> Bhavani Shanker Trading Co. Versus Commissioner of Commercial Taxes - [2002] 127 STC 162 (AP) Issues:1. Dispute over assessment under the Central Sales Tax Act.2. Whether transactions between the dealer and nonresident principals are liable to Central sales tax.Issue 1: Dispute over assessment under the Central Sales Tax Act:The appellant, a registered dealer under the Andhra Pradesh General Sales Tax Act and Central Sales Tax Act, was involved in the purchase and sale of cashewnuts. The assessing officer found transactions created to avoid Central sales tax, leading to a show cause notice. The Appellate Deputy Commissioner allowed the appeal, but the Commissioner revised the order, stating that the transactions were to avoid tax. The appellant contended that acting as an agent for nonresident principals did not constitute interState sales, citing legal precedents. The Commissioner's order was challenged, arguing that transfers to nonresident principals were not sales under the CST Act.Issue 2: Whether transactions between the dealer and nonresident principals are liable to Central sales tax:The appellant purchased cashewnuts on his account but transferred them to nonresident principals, claiming no interState sales occurred. The explanation provided suggested the transactions were not genuine. The court rejected the argument that transfers to the agent's account were not sales, emphasizing the movement of goods between states. The court disagreed with the appellant's interpretation of the transactions, stating they constituted interState sales, thus attracting Central sales tax liability. The court highlighted the potential for tax evasion if such transfers were not considered sales under the CST Act. The court upheld the Commissioner's decision to revise the Appellate Deputy Commissioner's order, emphasizing the movement of goods to nonresident principals through the dealer acting as an agent.In conclusion, the court dismissed the special appeal, affirming the liability of transactions between the dealer and nonresident principals to Central sales tax.
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