TMI Blog1962 (8) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to sales tax and the reasons for which the High Court quashed the said assessment. The respondent carried on the business of importing and selling different types of footwear in the State of Madhya Pradesh under the name and style of Munvar Shoe Company, Indore. During the assessment year 1956-57 the taxable turnover of the goods sold by the respondent was determined to be a little over Rs. 60,000. and he was assessed to sales tax on his taxable turnover in accordance with item 32 of Schedule 3 of the notification dated October 24, 1953, issued under section 5 of the Madhya Bharat Sales Tax Act, 1950 (Act 30 of 1950) (hereinafter referred to as the Act). Section 3 of the Act is the charging section which imposes the tax. Section 4(3) empowers the Government to grant exemption by means of a notification in respect of the sale of any goods or class of goods. Section 5 of the Act fixes the rate of tax and states that the tax payable by a dealer under the Act shall be at single point. It permits the State Government to notify the goods and the point of their sale at which the tax is payable. Item 32 of Schedule 3 of the notification referred to above was in these terms: "S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the family of the manufacturer, he was not entitled to claim any exemption under the notification in question. Consequently, the Sales Tax Officer passed an order assessing sales tax on the total turnover of the respondent. The respondent then moved the High Court of Madhya Pradesh by means of a petition under Article 226 of the Constitution and in that petition the respondent said that the notification dated January 28. 1956, exempted from tax all sales of footwear which fulfilled the following two conditions, viz., (a) such footwear was hand-made and not manufactured on power machine, and (b) the sale price whereof did not exceed Rs. 12-8 0 per pair. The respondent further averred that if the exemption were held to be in favour of sales by a manufacturer or a member of his family and not on sales by an importer, then the notification would be discriminatory in nature and would contravene the provisions of Article 304(a) of the Constitution. On these grounds the respondent prayed that the assessment order dated March 25, 1958, be quashed and the Sales Tax Officer be directed to exempt from tax such sales by the respondent as were covered by the exemption granted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must not exceed Rs. 12-8-0; and the third condition is that the sale must be by the manufacturer or any member of his family. The notification when it uses the expression "in case of sale" must refer to the sale which is being exempted from tax in the State; in other words, it has reference to the taxable event in the State as per Schedule 3 of the notification dated October 24, 1953. That notification makes it clear that the tax is a single point tax, and the taxable event is the sale by the importer or manufacturer in the State. Therefore, the expression "in case of sale", in the exemption notification can have no reference to a sale outside the State. The High Court was in error when it said that it made no difference whether the sale was by the manufacturer within the State directly to the purchaser or whether the sale was by the manufacturer outside the State to the importer who then sold the shoes to the purchaser in the State. When a manufacturer sells shoes outside the State to an importer and the importer again sells shoes in the State, there are really two sales, one outside the State and one inside it. The sales outside the State are not taxable under the Act and the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all leather goods and all footwear are made liable to a tax at the point of sale in the State by an importer or manufacturer. Learned counsel has submitted that the respondent is an importer who sells footwear in the State, and he will be liable to tax on all footwears sold by him and will not be entitled to claim any exemption if the exemption notification is bad; in other words, the assessment will be the same as has been found by the Sales Tax Officer by his order dated March 25, 1958, and in that view also, the order of the High Court quashing the assessment will be erroneous. We now proceed to consider these alternative submissions of learned counsel for the appellants. We do not think that the notification dated January 28, 1956, makes any such discrimination between footwear manufactured or produced in the State of Madhya Pradesh and footwear imported from other States as is prohibited by Article 304 (a) of the Constitution. We have already pointed out that the exemption granted by the notification in question depends on the fulfilment of three conditions and all the three conditions are equally applicable to footwear manufactured or produced in the State and footwear imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en urged by learned counsel for the respondent. Learned counsel has pointed out that the word "himself" used in the earlier notification of May 27. 1955 in connection with the word "manufacturer" has been omitted from the later notification of January 18, 1956, and he has contended that by reason of the omission of the word "himself" the benefit of the later notification may be available to a servant or an agent of the manufacturer. We do not think that this question falls for decision in the present appeal. The respondent in the present case is neither a servant nor an agent of the manufacturer. It is admitted that he is merely an importer and in his case nothing turns upon the omission of the word "himself" from the later notification. We also agree with the alternative submission of learned counsel for the appellants that if the notification dated January 28, 1956, is bad, then the respondent stands to gain nothing. If the exemption notification is struck down as invalid, that will not affect the validity of the notification of October 24, 1953, particularly of item 32 of Schedule 3 thereof. Learned counsel for the respondent has submitted that the two notifications must be re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
