High Court Upholds Purchase Tax on Dealer's Goods for 1984-85 Assessment Year

Commissioner of Sales Tax Versus Kumar Motors

Commissioner of Sales Tax Versus Kumar Motors - [2007] 5 VST 643 (All) Issues:
1. Assessment of purchase tax on goods purchased by the dealer.
2. Interpretation of Notification No. 6606 dated December 5, 1984.
3. Distinction between chassis of a motor vehicle and a motor vehicle with a body mounted over it.
4. Applicability of purchase tax under section 3-AAAA of the Act.

Analysis:
The High Court judgment pertains to a revision against an order passed by the Sales Tax Tribunal regarding the assessment of purchase tax on goods purchased by the dealer for the assessment year 1984-85. The revising authority imposed purchase tax as the goods were not resold in the same form and condition, based on the dealer's purchases of a three-wheeler chassis and an auto rickshaw body. The Tribunal set aside the revising authority's order, interpreting Notification No. 6606, which includes motor vehicles, chassis, bodies, tankers meant for mounting on chassis, and excludes tractors, for tax at 10 per cent on the point of sale to the consumer.

The High Court analyzed the Supreme Court's decision in Sri Siddhi Vinayaka Coconut & Co. v. State of Andhra Pradesh, emphasizing that commodities at different stages could be treated and taxed as commercially different articles. The Court highlighted previous judgments where different forms of the same commodity were treated as distinct for taxation purposes. The Court noted that the chassis of a motor vehicle and a motor vehicle with a body mounted over it are not commercially the same thing, despite being mentioned in the same entry of the notification.

Consequently, the Court held that the dealer's purchases of the body and chassis separately, with the intention to resell them in the same form and condition, attracted the liability to purchase tax under section 3-AAAA of the Act. The judgment allowed the revision, ruling in favor of imposing the purchase tax on the dealer for the purchases made. No costs were awarded in this decision.