1973 (5) TMI 81 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of whether there is a sale in the course of inter-State trade in respect of sales to the joint Director of Food liable to Central sales tax.
2. Interpretation of provisions under the Orissa Rice Procurement (Levy) Order, 1964 in relation to the sales in question.
3. Analysis of the applicability of Supreme Court decisions in determining the nature of the transactions as sales for tax purposes.
4. Examination of whether the sales in question qualify as inter-State sales exigible to Central sales tax.

Analysis:
1. The case involved a question referred by the Member, Sales Tax Tribunal, Orissa, regarding the determination of whether the sales to the joint Director of Food constituted a sale in the course of inter-State trade liable to Central sales tax. The assessee contended that the despatches were made under the Orissa Rice Procurement (Levy) Order, 1964, and therefore, did not amount to a sale. However, the Tribunal, relying on a decision of the Allahabad High Court, held that these transactions amounted to sales. The assessee's counsel argued that the transactions did not constitute sales, citing a Supreme Court decision in a similar matter. The court analyzed the provisions of the Orissa Rice Procurement (Levy) Order, 1964, and the Supreme Court decision, ultimately affirming the Tribunal's finding that there was a sale in this case.

2. The court considered the applicability of the Supreme Court decision in Chittar Mal Narain Das v. Commissioner of Sales Tax in determining whether the transactions in question qualified as sales. The counsel for the assessee argued that the transfer of title under the Orissa Rice Procurement (Levy) Order, 1964, did not amount to a sale, drawing parallels with the U.P. Wheat Procurement (Levy) Order, 1959. However, the court noted that the Supreme Court had previously held that transactions under statutory orders regulating supply and distribution of goods could still constitute sales if certain criteria were met, such as defined parties, transfer of property, consideration, and mutual consent. Based on this analysis, the court concluded that the transactions in question did indeed constitute sales.

3. The court also addressed the contention raised by the assessee regarding the nature of the sales in relation to Central sales tax. The assessee argued that there could only be intra-State sales, and therefore, no Central sales tax should be exigible. However, the court rejected this argument, noting that the sale from the licensee to the joint Director of Food led to export, thereby qualifying as an inter-State sale under the Central Sales Tax Act. The court upheld the Tribunal's finding that the sales were in the course of inter-State trade and exigible to Central sales tax.

4. In conclusion, the court answered the question referred by the Tribunal by affirming that there was a sale in the course of inter-State trade in respect of the sales to the joint Director of Food, which was liable to Central sales tax. The court based its decision on the analysis of relevant statutory provisions and Supreme Court decisions, ultimately upholding the Tribunal's finding in this matter.