1985 (9) TMI 313 - SC - VAT and Sales Tax

Whether the movement of the goods from the registered office at Hyderabad is occasioned by the order placed by the buyer or is an incident of the contract? Whether the sale is one which occasions the movement of goods from one State to another? Held that - Writ petition dismissed. We direct the Commercial Tax Officer to afford a reasonable opportunity to the company to collect C forms and furnish them to the assessing authority before making an assessment against the company in respect of such transactions. We understand that so far as the turnover for the assessment year 1979-80 is concerned the assessment order has been set aside in appeal and the case has been remanded to the assessing authority for granting sufficient time to the company to file the C forms in order to enable it to avail of the concessional rate of tax. The petitioners have prayed for the further relief that as the aforesaid transactions have been held to be inter-State sales their inclusion in the assessment made under the corresponding State Sales Tax Acts should be deleted. We give liberty to the petitioner-company to make an application to the assessing authority concerned for the grant of such relief and if the application is made within two months from today we direct the said assessing authority to entertain the application notwithstanding any period of limitation prescribed for such a proceeding and to dispose of the claim in accordance with law.

Summary

Issues Involved:
1. Liability of Central Sales Tax on non-standard goods transferred from the registered office to branch offices.
2. Reopening of past assessments for including stock transfers in the assessable turnover.
3. Opportunity to collect C forms for concessional tax rates.
4. Deletion of transactions from State Sales Tax assessments.

Issue-wise Detailed Analysis:

1. Liability of Central Sales Tax on non-standard goods transferred from the registered office to branch offices:
The primary issue revolves around whether the transfer of non-standard goods from the registered office in Hyderabad to branch offices in other states constitutes inter-State sales liable to Central Sales Tax. The Commercial Tax Officer assessed the turnover of such goods as inter-State sales, arguing that the movement of goods from Hyderabad to branches was an incident of the contract with customers. The petitioners contended that these were mere stock transfers, not sales. The Court concluded that the movement of goods was occasioned by the orders placed by buyers, making it an inter-State sale under section 3(a) of the Central Sales Tax Act. The Court emphasized that the registered and branch offices are not separate juridical entities, and the goods' movement from Hyderabad to branches was integral to fulfilling the sales contracts.

2. Reopening of past assessments for including stock transfers in the assessable turnover:
The petitioners challenged the Commercial Tax Officer's notices to reopen assessments for the years 1977-78 and 1978-79 to include the disputed transactions in the assessable turnover. The Court did not provide a detailed analysis on this issue but implied that the reopening was justified based on the finding that these transactions were indeed inter-State sales.

3. Opportunity to collect C forms for concessional tax rates:
The petitioners requested time to collect C forms from customers to avail of the concessional tax rate under section 8(1) read with section 8(4) of the Central Sales Tax Act. The Court acknowledged the petitioners' request, noting the long-standing doubt regarding the nature of these transactions. It directed the Commercial Tax Officer to provide a reasonable opportunity for the company to collect and submit C forms before making an assessment for the disputed transactions.

4. Deletion of transactions from State Sales Tax assessments:
The petitioners sought relief from the inclusion of these transactions in the assessments under the State Sales Tax Acts. The Court granted liberty to the petitioner-company to apply to the assessing authority for this relief. It directed the assessing authority to entertain such applications made within two months, notwithstanding any limitation period, and to dispose of the claims in accordance with the law.

Conclusion:
The Supreme Court upheld the Commercial Tax Officer's decision that the disputed transactions were inter-State sales liable to Central Sales Tax. It directed the provision of time for collecting C forms for concessional rates and allowed the petitioners to seek deletion of these transactions from State Sales Tax assessments. The writ petition was dismissed with these directions, and no order as to costs was made.