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TMI Blog2006 (11) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act, 1993 (hereinafter referred to as "the Act"). The appellant-company has been engaged in the business of sale and supply of petroleum products in the country including the State of Assam. The appellant-company has been purchasing various petroleum products from Bongaigaon Refinery and Petrochemicals Ltd. (hereinafter referred to as "the BRPL") on payment of sales tax as per the provisions of the Act. On the recommendation of the Oil Prices Committee set up by the Government of India, Resolution dated December 16, 1977 was adopted by the Government which required a dealer to sell its products at the prices fixed by the Central Government and the prices so fixed by the Central Government included surcharge to be collected from the buyers and deposited to the "Oil Pool Account". The appellant-company a dealer, therefore, had no alternative but to sell the products at the prices so fixed inclusive of surcharge and transfer the surcharge to the said "Oil Pool Account". The appellant-company was entitled to retain only the basic price, the sales tax paid at the time of purchase of the products in Assam from the BRPL and the profit margin specified by the Central Government. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first point of sale within the State and the rates of tax shall be as specified in Schedule II for such items" Section 2(34)(d) of the Act defines the "sale price" as under: "2(34) 'Sale price' means (d) in respect of a sale under any other sub-clause of clause (33), the amount received or receivable by a dealer as valuable consideration for the sale of goods including any sum charged, whether stated separately or not for anything done by the dealer in respect of the goods at the time of or before delivery thereof or undertaken to be done after the delivery whether under the contract of sale or under a separate contract but excluding- (i) the cost of outward freight, delivery or installation or interest when such cost or interest is separately charged, subject to such conditions and restrictions as may be prescribed, and (ii) any sum allowed as a cash discount according to ordinary trade practice: Provided that in a case where there is no bill of sale or the sale bill is, in the opinion of the assessing authority, for an amount substantially lower than the market price of the goods, the valuable consideration receivable by the dealer shall be taken to be the market price dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without giving adjustment of Rs. 3,245.38 paid for the same goods to the BRPL on which tax was already paid. According to the appellant, the respondents were bound to give adjustment of the amount of sales tax paid to the BRPL at the time of purchase of petroleum products and can, at the most, levy sales tax on the differential amount of Rs. 7,463.56. According to the appellant, in the impugned judgment, the High Court completely ignored and overlooked this aspect of the matter though specifically pleaded and argued. The grievance of the appellant was that the Revenue, subsequent to the impugned order of the High Court, had passed ex parte assessment orders and raised demand of Rs. 303.98 crores retrospectively from the years 1994-95 to 1997-98 and levied tax on the entire amount collected by the appellant from its customers without giving any adjustment of the sales tax paid by the appellant to the BRPL on which tax had already been levied treating the same as first sale under section 8(1) of the Act and also levied huge amount of Rs. 158.12 crores by way of interest. According to the appellant, the question which arose for consideration was - whether the "sale price" was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1996, asked the appellant-company about details of the "purchase" and "sale price" of various products dealt with by the appellant-company and was of the view that since the "sale price " of the appellant-company is more than 40 per cent of the purchase price, as per the Explanation to section 8(1)(a) of the Assam General Sales Tax Act, 1993 read with rule 12 of the Assam General Sales Tax Rules, 1993, the second sale was to be treated as the first sale and the appellant-company was liable to pay tax on the second sale considering it to be the first sale in the State of Assam. The appellant-company pointed out to the Senior Superintendent of Taxes, respondent No. 3, that the "sale price" of the appellant-company included an amount of "surcharge" collected on behalf of the Central Government and in that view of the matter the "sale price" for the purpose of the Act should be determined after reducing the amount of "surcharge" collected by the appellant-company on behalf of the Central Government which had to be contributed to the "Oil Pool Account". The Senior Superintendent of Taxes, on February 17, 1996, directed the appellant-company to produce the accounts and records relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant aggrieved by the impugned judgment has preferred this appeal before this court. The appellant-company, though reiterated all the grounds challenged before the High Court but during the course of arguments Mr. G.E. Vahanvati, the learned Solicitor General, laid emphasis on the following submissions: (a) That, according to the provisions of the Act, particularly sub- section (1) of section 8 read with Explanations 1 and 2 did not envisage double taxation. (b) That, the appellant on purchase of petroleum products from the BRPL had already paid sales tax construing the same as the first point of sale in the State. The question of levying tax on the very same goods again in the State in the hands of IOC cannot arise because Explanation 1 merely contemplated shifting of first point of sale in the State on the happening of certain contingencies stipulated therein but did not contemplate double or multi-point taxation by levying tax in the hands of two dealers in the State in respect of sale of the very same goods. (c) According to Mr. Vahanvati, the High Court, in the impugned judgment, ought to have held that the sales tax would be leviable only on the difference of the resale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited the sales tax with the State Government. Mr. C.A. Sundram, the learned Senior Counsel appearing for the respondents, submitted that the definition of "sale price" includes every amount received by the appellant-company from the buyers as consideration for the sale of the goods. As per the sub-clause (d) of section 2(34), the amount received or receivable by the dealer as the valuation of the consideration in the sale of goods including any sum charged whether stated separately or not for anything done in respect of the goods at the time of or before delivery comes within the definition of "sale price". Mr. Sundram stated that a bare reading of section 8(1)(a) of the Act and rule 12(1) of the Rules makes it abundantly clear that the provisions of the Act stipulate in no unambiguous term that the levy of tax was on the second sale, treating the same to be the first sale, if the difference of the original purchase price and the resale price was more than 40 per cent. It was further submitted by Mr. Sundram that it was unfair to suggest that contribution to the "Oil Pool Account" should not be taken into account for determining the sale price, when the appellant itself had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess amount collected by it. In the additional affidavit filed by Mr. Ajay Sinha, Deputy Manager (Finance), on September 21, 2006 stated that the company had not collected any amount by way of sales in their invoices and sale made by them out of the purchases made from the BRPL. In case what is stated in the counter- affidavit is correct then the appellant-company cannot be permitted to retain the amount collected towards sales tax from the consumers on the entire sales. The amount, if any, collected had to be deposited with the State Government. It is not possible for this court to resolve this factual controversy whether in fact the appellant-company had collected sales tax on the entire amount from the consumers. In view of the conflicting averments in the counter-affidavit and the additional affidavit, we deem it appropriate to remit this matter to the Senior Superintendent of Taxes, Gauhati Unit "A" for ascertaining the fact whether the appellant-company had in fact collected sales tax on the entire sales as alleged by the respondents in the counter-affidavit. If necessary, the said Senior Superintendent of Taxes may give opportunity to the parties to submit relevant docum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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