TaxTMI 
TaxTMI 
1976 (7) TMI 143
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....d the Central Sales Tax Act, 1956, with the Sales Tax Officer at Moradabad in Uttar Pradesh. We shall refer to these two statutes as the U.P. Act and the Central Act for the sake of brevity. The company used to arrange supply of coal from collieries situate in West Bengal and Bihar to consumers in Uttar Pradesh. The collieries used to send the coal by rail and the railway receipts were prepared either in the name of the company or in the name of the consumer in Uttar Pradesh on whose behalf the order for supply of coal was placed. The collieries sent the bills and invoices in respect of the coal despatched to Uttar Pradesh to the company's head office in Calcutta; the company forwarded the railway receipts to the consumers in cases where the receipts were in the names of the consumers and endorsed the receipts that were in the company's name in favour of the consumers for whom the coal had been despatched. These two appeals, brought on certificates of fitness granted by the Allahabad High Court, arise out of two writ petitions filed in the High Court respectively by the company and its aforesaid branches. The petition filed by the company, leading to Civil Appeal No. 928....
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....ct, every dealer shall be liable to pay tax under this Act on sales of goods effected by him in the course of inter-State trade or commerce. Sub-section (2) of section 6 states that notwithstanding what is provided in sub-section (1), any subsequent sale of goods effected by a transfer of documents of title to the goods,- (A) to the Government, or (B) to a registered dealer other than the Government, if the goods are of the description referred to in sub- section (3) of section 8, shall be exempt from tax under this Act. There are two provisos to this sub-section, but it is not necessary to refer to them. Section 7(1) requires every dealer liable to pay tax under this Act to apply for registration. Sub-section (3) of section 7 provides that if the application is in order, the prescribed authority shall register the applicant and grant to him a certificate of registration in the prescribed form which shall specify the class or classes of goods for the purpose of sub-section (1) of section 8. Rule 3 of the Central Sales Tax (Registration and Turnover) Rules, 1957, states that an application for registration under section 7 shall be made in form A, and form A requires the p....
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.... the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within sub-section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained, the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods." The dispute in this case turns on whether the proviso to section 9(1) is applicable to the case. Reference may also be made to section 15 which provides the restrictions and conditions in regard to the tax on sale or purchase of declared goods within a State. The tax on sale or purchase of such goods inside the State is not to exceed three per cent of the price thereof, and such tax is not to be levied at more than one stage. The only provision of the U.P. Ac....
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....er recorded an order on March 26, 1974, overruling the objections and rectified the order of assessment dated March 27, 1971. A copy of the order passed on March 26, 1974, rectifying the mistake in the earlier assessment order was served on the company on March 31, 1974. The company challenged the order dated March 26, 1974, by a writ petition in the Allahabad High Court which was dismissed giving rise to this appeal. Mr. Nariman appearing for the appellants in these appeals pressed the following grounds: (1) the proviso to section 9(1) of the Central Act has no application to goods declared to be of special importance in inter-State sales or commerce under section 14 of the Central Act; (2) section 22 of the U.P. Act was not applicable as there was no mistake apparent on the face of the record; and (3) in any event, the order made under section 22 of the U.P. Act was barred by limitation. The argument that the proviso to sub-section (1) of section 9 does not apply to declared goods proceeds as follows: sub-section (1)(b) and sub- section (2)(a) of section 8 of the Central Act deal with two different types of goods. Sub-section (1)(b) speaks of goods of the description referred....
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....such subsequent sale would be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or could have obtained the form prescribed for the purposes of section 8(4)(a). No exemption under section 6(2) is claimed in this case. The declaration referred to in section 8(4)(a) is necessary for the dealer to avail of the benefit of the rate of tax mentioned in section 8(1). Under section 7(3) the certificate of registration granted to a dealer has to specify the class or classes of goods for the purposes of section 8(1). Rule 3 of the Central Sales Tax (Registration and Turnover) Rules, 1957, requires an application for registration under section 7 to be made in form A, and form A requires the purpose for which the goods or class of goods are purchased by the dealer to be specified; resale is one of the purposes mentioned in form A. Thus section 7(3) makes no distinction between declared goods and other goods; it is impossible to argue therefore that declared goods purchased by a dealer for resale need not be specified in his certificate of registration. Reading sub-section (1) and sub-section (3) of section 8 together, it is clear that all....
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....ficer relying on a judgment of the Allahabad High Court on a writ petition made by the company questioning the validity of the assessment in respect of the assessment year 1965.66. In that judgment the High Court held, referring to the provisions of section 9(1) of the Act, that "the sales tax authorities in the State of U.P. had no jurisdiction to make any assessment even if there was any inter-State sale which could be liable to tax in the hands of the petitioner-company. The only State which could levy tax could be either Bihar or West Bengal. The impugned assessment order passed by the Sales Tax Officer, Moradabad, is therefore clearly without jurisdiction and is liable to be quashed". In this judgment there is no reference to the proviso to section 9(1). It appears from the judgment under appeal that the High Court in a number of later decisions held that in view of the proviso, tax on a subsequent sale by a registered dealer in the course of inter-State trade or commerce was to be levied and collected in the State where the dealer effecting the subsequent sale was registered. We are of the view that the order of assessment dated March 27, 1971, was apparently erroneous in tha....