1959 (10) TMI 19 - HC - VAT and Sales Tax

Summary

Issues:
Validity of provisional and final sales tax assessments under Andhra Pradesh General Sales Tax Act, 1957 for petitioners claiming immunity as residents of Yanam, part of Pondicherry administered by the Union Government.

Analysis:
The judgment addresses challenges to provisional and final sales tax assessments under the Andhra Pradesh General Sales Tax Act, 1957. The petitioners, claiming to be permanent residents of Yanam, seek immunity from sales tax as citizens of a foreign country. The petitioners argue that their sales and purchases in Andhra Pradesh are in the course of import or export, thus protected under Article 286 of the Constitution and section 38 of the Act. The respondent disputes the petitioners' residency status, asserting they reside within Andhra Pradesh. The department contends that all transactions within Andhra Pradesh are subject to sales tax unless proven to be in the course of international trade.

The judgment highlights that the Constitution and the Act provide exceptions for transactions, not individuals. The petitioners failed to produce their accounts for examination, leading to best judgment assessments by the department. The court notes that remedies through appeals under the Act were available to the petitioners, suggesting they should have pursued them instead of seeking relief under Article 226. The Supreme Court's decisions in previous cases define the scope of exemption, emphasizing that sales or purchases must be in the course of export or import to qualify for immunity from sales tax.

The court emphasizes the importance of distinguishing between transactions subject to tax and those exempt based on the nature of trade. It states that the burden of proof lies with the parties to establish the immunity of their transactions. The judgment concludes that the petitioners' argument that all transactions within Andhra Pradesh should be exempt from tax is unsustainable. The court dismisses all petitions, holding that the transactions' immunity from tax is a factual determination that must satisfy the assessing authorities. The petitioners' general contention that all transactions should be tax-exempt regardless of their nature is rejected, and the petitions are dismissed with costs.