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1970 (12) TMI 73 - HC - VAT and Sales Tax
Issues:
- Assessment of sales tax on moong dal sale - Interpretation of sales on consignment basis Assessment of sales tax on moong dal sale: The case involved a petition challenging the assessment of sales tax on the sale of moong dal. The petitioner, a manufacturer of moong dal, purchased moong and converted it into dal for sale. The Assessing Authority assessed the sale of moong dal to sales tax, claiming that the transaction did not constitute a sale due to no transfer of property in the goods. The basis for this assessment was a previous judgment by Shamsher Bahadur, J., which was in conflict with the views of Harbans Singh, J., and another judgment. The conflict of opinion led to the petition being admitted to a Division Bench for review. The Division Bench reviewed the judgments and concluded that the view taken in the other two decisions was correct, supporting the position that the sale of goods on consignment basis does amount to a sale. Interpretation of sales on consignment basis: The petitioner argued that the goods were not sold at all and that there was no proof of sale. However, it was established that the goods were sent on consignment basis for sale outside the State of Punjab through commission agents. The Assessing Authority and the Appellate Authority both maintained that the despatch of goods on consignment basis did not constitute a sale due to the lack of transfer of property in goods for a valuable consideration. The Division Bench disagreed with this interpretation, affirming that the correct view is that the sale of goods on consignment basis does amount to a sale. As a result, the petition was allowed, and the orders assessing the sales tax were quashed, with a direction for the refund of the tax amount if already deposited by the petitioner.
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