TaxTMI 
TaxTMI 
1994 (4) TMI 312
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....eal No. 1646, Civil Appeal No. 1647, Civil Appeal No. 1648, Civil Appeal No. 1649, Civil Appeal No. 1650, Civil Appeal No. 1941, Civil Appeal No. 2256, Civil Appeal No. 2289, Civil Appeal No. 2551, Civil Appeal No. 2552, Civil Appeal No. 2553, Civil Appeal No. 2554, Civil Appeal No. 2555, Civil Appeal No. 2556, Civil Appeal No. 2557, Civil Appeal No. 2558, Civil Appeal No. 2559, Civil Appeal No. 2560, Civil Appeal No. 2561, Civil Appeal No. 2562 of 1992, Civil Appeal No. 407 of 1993, Civil Appeal No. 2352 of 1994, SLP 5900 of 1992 decided on April 08, 1994 H.N. Salve, Senior Advocate (Indu Malhotra and Shirin Jain, Advocates, with him), for the respondent-dealer from West Bengal in C.A. No. 2990 of 1991. Anil Divan, Santhosh Hegde and T.A. Ramachandran, Senior Advocates (S.K. Sinha and J.R. Das, Advocates, with them), for the State of West Bengal. Dr. D. Pal, Senior Advocate (Ms. Priya Hingorani, Indu Malhotra, S.K. Jain and S.C. Gupta, with him), for some dealers from West Bengal. V.J. Francis, Advocate, for the State of Kerala in C.A. No. 2352 of 1994. H.N. Salve, Senior Advocate (G.S. Chetterjee and D.P. Mukherjee, Advocates, wit....
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.... them in the manufacture of other goods and disposed of such manufactured goods to a place outside the place in any manner otherwise than by way of sale in the course of inter-State trade or commerce or in the course of export outside the territory of India within the meaning of sub-section (1) of section 5 of the Central Sales Tax Act, 1956. The said tax was also leviable in a case where the manufactured goods were disposed of within the State otherwise than by way of sale in the State. Section 13AA of the Bombay Sales Tax Act, 1959, also came up for consideration in the same decision. Section 13AA provided that where a dealer purchased goods and used such goods in the manufacture of taxable goods and despatched the goods so manufactured to his own place of business or to his agent's place of business situated outside the State within the territory of India, such dealer shall pay an additional purchase tax at the rate of two paise in the rupee on the purchase price of the goods so used in the manufacture. The Division Bench held that the said provision is equally beyond the legislative competence of the Maharashtra Legislature inasmuch as it purported to levy a consignment tax. ....
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....idered by us. I am inclined now to think that this is an approach that basically alters the parameters and removes the provision from the area of vulnerability." (Emphasis* supplied) The matters relating to other States have now come up before us. They relate to Punjab, Tamil Nadu, Kerala, West Bengal and Maharashtra. The main contention of the counsel for the dealers is that the reasoning and approach adopted and conclusion arrived at in Goodyear [1990] 76 STC 71 (SC) is the correct one. Counsel faulted the reasoning and conclusion in Hotel Balaji [1993] 88 STC 98 (SC) and asked for its reconsideration. Counsel submitted that the decision in Hotel Balaji [1993] 88 STC 98 (SC) is also contrary to the reasoning in Mukerian Papers v. State of Punjab [1991] 81 STC 152 (SC); [1991] 2 SCC 580 a decision rendered by a Bench of three Judges. It is argued that the decision in Mukerian Papers [1991] 81 STC 152 (SC); [1991] 2 SCC 580 squarely affirms the decision in Goodyear [1990] 76 STC 71 (SC). For this reason, it is submitted, these matters must be placed before a larger Bench to resolve the conflict between Hotel Balaji [1993] 88 STC 98 (SC) and Mukerian Papers [1991] 81 STC 152 (....
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....9. The sole basis of the attack on the said provisions is the reasoning in and ratio of Goodyear [1990] 76 STC 71 (SC). No separate arguments are addressed each provision-wise. Even so, it would be appropriate to notice briefly the relevant provisions in each State enactment. Section 4-B of the Punjab General Sales Tax Act, 1948 reads thus: "4-B. Levy of purchase tax on certain goods.-Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule 'B' from any source and- (i) uses them within the State in the manufacture of goods specified in Schedule 'B', or (ii) uses them within the State in the manufacture of any goods, other than those specified in Schedule 'B', and sends the goods so manufactured outside the State in any manner other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, or (iv) sends them outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, and no tax is payable on the purchase of such goods under any other provisions of this Act, ther....
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....y dealer who in the course of his business purchases from a registered dealer or from any other person, any goods, (the sale or purchase of which is liable to tax under this Act) in circumstances in which no tax is payable under section 3, 4 or 5 as the case may be and either, (a) consumes such goods in the manufacture of other goods for sale or otherwise or (b) disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall pay tax on the turnover relating to the purchase as aforesaid at the rate mentioned in section 3, 4 or 5 as the case may be, whatever be the quantum of such turnover in a year: Provided that a dealer (other than a casual trader or agent of a non-resident dealer) purchasing goods the sale of which is liable to tax under sub-section (1) of section 3 shall not be liable to pay tax under this sub-section, if his total turnover for a year is less than one lakh of rupees." [Sub-sections (2) and (3) are omitted as unnecessary.] It is evident that section 7-A(1) of the Tamil Nadu Act is si....
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....0 STC 356.-Ed. stepped in and amended the said provisions by the West Bengal Taxation The Tribunal rejected further arguments on behalf of the department and followed its earlier decision in Rasoi [1991] 80 STC 356.-Ed. The Amendment Ordinance and the Amendment Act replacing it were passed even prior to the decision of the W.B.T.T. and the Tribunal held the provisions both before and after amendment to be bad-Ed. Laws (Amendment) Act, 1990 amending the said provisions. By the said Amendment Act, in section 4(6)(ii) of the 1941 Act, the words beginning with "and used by him directly in the manufacture" and ending with "by way of sale in West Bengal" were omitted with retrospective effect from October 10, 1977. The said (Amendment) Act also substituted clause (i) in sub-section (2) of section 4 of 1954 Act. The substituted clause (i) reads as follows: "(i) on all such purchases of goods against the declaration issued or to be issued by him." [It is not necessary to notice the other amendments in section 4 for the purpose of this case.] The amended provision was again challenged in a batch of writ petitions Chloride Industries Ltd. v. Commissioner of Commercial Taxes, Gove....