TMI Blog1982 (3) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... right in law in holding that the order of assessment passed by the assessing authority, in order to levy tax on the sales of the above goods as effected by the opponent's vendor-M/s. Hindustan Steel Limited-at the earlier stage, under the Bombay Sales Tax Act, 1959, on the basis that they were local sales, was legally binding upon the department in the present case while assessing the opponent to tax in respect of its sales of the same goods at the subsequent stage? When our pointed attention was invited by Mr. R.P. Bhatt, the learned Advocate for the revenue, we told Mr. Bhatt that the questions which were formulated by the Tribunal were not properly framed, and hence, we requested Mr. R.P. Bhatt, the learned counsel for the revenue, and Mr. S.L. Modi, the learned Advocate for the respondent-assessee, to formulate the questions of law in a proper manner, and accordingly, both the learned counsel agreed that we should concentrate on the following two questions only: "(1) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the department had no right to levy any tax under the Bombay Sales Tax Act, 1959, upon the opponent' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler under the Bombay Sales Tax Act, 1959, as well as the Central Sales Tax Act, 1956. During the year of account, the respondent-assessee had locally sold pig iron worth Rs. 27,66,908/by giving delivery of the goods to its customers at its warehouse or godown in the city of Ahmedabad. A dispute had arisen in the course of the respondent's assessment proceedings, whether the above sales which the respondent-assessee had effected were liable to tax locally under the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Bombay Act") or not. On behalf of the respondent-assessee, it was urged, that the respondentassessee had purchased the aforesaid goods in question from the local branch office of M/s. Hindustan Steel Limited and that pig iron was "declared goods" as defined under the Bombay Act and the Central Act. It was also urged on behalf of the respondent-assessee that when the assessment of the taxation liability of the local branch of M/s. Hindustan Steel Limited was determined, it was decided by the department that M/s. Hindustan Steel Limited had already collected sales tax at 3 per cent under the Bombay Act from the respondent-assessee on the basis of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sales tax at 3 per cent under the Bombay Act from the respondent-assessee on the basis of the aforesaid sales of "declared goods" as local sales at the earlier stage. It appears that the Sales Tax Officer as well as the Assistant Commissioner of Sales Tax, Ahmedabad, did not accept the case of the respondent-assessee, and hence, the respondent-assessee had preferred Second Appeal No. 454 of 1976 before the Gujarat Sales Tax Tribunal at Ahmedabad, and the Tribunal having considered the grievances of the respondent-assessee came to the conclusion that the subsequent sales of the same goods worth Rs. 27,66,908 as made by the respondent-assessee were local sales, and not in respect of inter-State purchases as erroneously found by the Sales Tax Officer and the Assistant Commissioner of Sales Tax, Ahmedabad. As a result of the aforesaid conclusion, the Sales Tax Tribunal set aside the orders passed by the learned Assistant Commissioner and the Sales Tax Officer, and took the view that the subsequent goods worth Rs. 27,66,908 were local sales, and hence the respondent-assessee cannot be saddled with any taxation liability as held by the Sales Tax Officer and the Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in the Act to expire, and when this reference was being heard, Mr. Bhatt, the learned Advocate for the revenue, frankly stated having regard to the provisions contained in the Bombay Sales Tax Act, 1959, and the Central Sales Tax Act, 1956, an impossible situation has arisen for the department to pass a reassessment order correcting the assessment order already made by the department against M/s. Hindustan Steel Limited. Once again it may be emphasised that when an assessment order was made against M/s. Hindustan Steel Limited the Sales Tax Officer and the Assistant Sales Tax Commissioner had taken the view that the aforesaid sales were "local sales" and not transactions of inter-State trade and commerce. It is at this stage that Mr. Bhatt, the learned Advocate for the revenue, had to face an additional difficulty in order to succeed in this reference as mentioned below. Sub-section (4) of section 9 of the Gujarat Sales Tax Act, 1969, is in the following words: "(4) If under this Act or any earlier law, any tax has been levied or is leviable on the sale or purchase of any declared goods, at any stage, then no further tax shall be levied under this Act at any subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h we have set out hereinabove confers absolute exoneration in regard to the taxation liability in regard to the respondentassessee, when it sells the aforesaid declared goods to its various constituents subsequent to the purchase of the very goods from M/s. Hindustan Steel Limited. But Mr. Bhatt, the learned Advocate for the State, made a valiant and desperate effort to persuade us to take the view that at least we must give an opportunity to the State to prove that the sales of the aforesaid declared goods were not local sales as held by the officers of the department. It is not possible for us even to countenance the said submission of Mr. Bhatt for the simple reason that for the apparent and obvious negligence on the part of the department, the department should not be given any protection or premium, particularly when it allowed the long period of limitation to expire during which the error could have been corrected by the department. Mr. Bhatt did his best to persuade us to take such a view but to no useful purpose. As a result of our aforesaid discussion, we must say that the reasoning of the Tribunal and the ultimate conclusion in favour of the respondent-assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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