1972 (9) TMI 118 - HC - VAT and Sales Tax

Issues Involved:
1. Entitlement to benefits under Section 10 of the Central Sales Tax (Amendment) Act, 1969.
2. Collection of Central Sales Tax by the petitioner.
3. Interpretation and application of Section 10 of the Central Sales Tax (Amendment) Act, 1969.
4. Validity of the conduct and certificates issued by the petitioner.
5. Burden of proof regarding non-collection of tax.

Detailed Analysis:

1. Entitlement to Benefits under Section 10 of the Central Sales Tax (Amendment) Act, 1969:
The core issue is whether the petitioner-assessee is entitled to the benefits of Section 10 of the Central Sales Tax (Amendment) Act, 1969. The court noted that for the year 1965-66, the petitioner, a dealer in butter and ghee, had filed monthly returns and paid sales tax to the State Government. The petitioner claimed exemption on the grounds that it had not collected tax from its buyers. The Commercial Tax Officer and the Sales Tax Appellate Tribunal rejected this claim, asserting that the petitioner had included the turnover in its returns and issued certificates indicating liability to pay tax.

2. Collection of Central Sales Tax by the Petitioner:
The petitioner argued that no tax had been collected from the buyers, whereas the State contended that the petitioner's conduct and the certificates issued implied that tax had been collected. The court examined the certificates and the inclusion of turnover in returns and concluded that these actions were referable to local sales, not inter-State sales. The court emphasized that mere conduct or erroneous impression by the dealer cannot justify the levy of sales tax if it is not assessable under the statute.

3. Interpretation and Application of Section 10 of the Central Sales Tax (Amendment) Act, 1969:
Section 10 exempts dealers from liability to pay tax on inter-State sales made between 10th November 1964 and 9th June 1969, provided no tax was collected on the ground that it could not have been levied or collected. The court highlighted that the burden of proof lies on the dealer to establish that no tax was collected. The petitioner met all the conditions specified in Section 10(1), including the period of sales, non-collection of tax, and the ground that no tax could have been levied if the amendments had not been made.

4. Validity of the Conduct and Certificates Issued by the Petitioner:
The court scrutinized the certificates issued by the petitioner, which stated that the turnover was liable to tax and included in the returns. The court found that these certificates pertained to local sales and were not indicative of tax collection on inter-State sales. The court rejected the State's argument that the petitioner's conduct implied tax collection, stressing that the basis for tax levy must be the statutory provisions, not the dealer's conduct.

5. Burden of Proof Regarding Non-Collection of Tax:
The court reiterated that the burden of proof under Section 10(2) lies on the dealer to show that no tax was collected. The Sales Tax Appellate Tribunal had found that the petitioner did not collect Central sales tax from its customers. The court upheld this finding, noting that the petitioner could not have collected tax during the specified period due to the Supreme Court's judgment in Lakshminarasimhiah Setty's case, which clarified that such taxes could not be levied.

Conclusion:
The court concluded that the petitioner satisfied all the requirements of Section 10(1) of the Central Sales Tax (Amendment) Act, 1969, and was entitled to the exemption. The revision case was allowed, setting aside the orders of the Sales Tax Appellate Tribunal and the sales tax authorities. The petitioner was awarded costs, including an advocate's fee of Rs. 100.

Result:
Petition allowed.

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