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Hindustan Petroleum Corporation Ltd. Versus State of Assam And Others

2015 (6) TMI 80 - GAUHATI HIGH COURT

Review order - Determination of sale price - "First sale" - Assam Board of Revenue originally held that in view of the explanation 1 of section 8(1) of the Assam General Sales Tax Act 1993 the sale made by the petitioner cannot be construed as a first sale made by the petitioner to its dealers and is not taxable - Held that:- Quantity of goods sold to the petitioner by the IOC accounts for only 4.5 per cent of its total production, therefore the said quantity cannot be considered as a “a substan .....

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he Assam Board of Revenue in review is untenable. - Decided in favour of assessee. - WP (C) 432/2008, 433/2008 and 436/2008. - Dated:- 11-3-2015 - Hon ble The Chief Justice (Acting) And Hon ble Mr Justice P. K. Saikia,JJ. For the Petitioner : Sri AK Saraf For the Respondents : Sri S Saikia JUDGMENT Heard the petitioner and the respondents. 2) The petitioner purchased petroleum products from the Indian Oil Corporation(IOC) and thereafter sold it to several dealers across Assam. The sale price col .....

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that in view of the explanation 1 of section 8(1) of the Assam General Sales Tax Act 1993 the sale made by the petitioner cannot be construed as a first sale made by the petitioner to its dealers and is not taxable. 5) The tax department subsequent to the order of the Assam Board of Revenue made an application for review of its order on the ground that the decision in appeal is contrary to the ratio laid down by the Supreme Court in civil appeal 6619/2001 between the Indian Oil Corporation and .....

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an application for review was filed. Accordingly the Assam Board of Revenue allowed the review petition and held that the sale effected by the petitioner to its dealers amounts to a first sale, since the sale price collected by the petitioner from its dealers is above 40 per cent of the sale price paid by the petitioner to the IOC, aggrieved by which this petition was filed by the Hindustan Petroleum Corporation Ltd, the petitioner. 7) At the outset it is to be noted that section 7 of the Assam .....

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cts from the Bongaigaon Refinery and Petrochemicals Ltd(BRPL) and effected the sale and while collecting the sale price from dealers the IOC also collected surcharge to be payable towards the oil-pool account to the Central Government. The question arose whether the surcharge collected should form part of the sale price or should that component be excluded from assessing the sale price? The next proposition under consideration was whether the IOC would be liable to pay tax on the entire sale pri .....

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between the purchase price and the sale price and not on the entire sale amount. 9) On close scrutiny of the said decision it discloses that the ratio laid down in the said decision does not appear to have any bearing on the question and issue involved in this petition. 10) In order to appreciate the facts and issue involved in this case it is necessary to advert to the provisions of section 8(1)(explanation 1) of the Assam General Sales Tax Act, 1993, which read as follows. 8. (1) The tax levi .....

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bjecting the goods to any other process not amounting to manufacture and the price charged on re-sale exceeds the sale price by more than such percentage as may be prescribed in respect of such goods or class of goods, the re-sale by such other person shall subject to rules if any, framed in this behalf, be deemed to be at the first point of sale within the State . 11) The counsel for the petitioner has strenuously contended that the second sale effected by the purchaser from the manufacturer wi .....

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ously contended that both the conditions are cumulative in effect and both the conditions have to be fulfilled. Even if any one of the conditions is absent, the liability to pay tax does not arise under the explanation 1 despite the fact that the sale price may exceed 40 per cent of the purchase price. In this regard the counsel referred to the assessment order to show that the IOC had sold only 4.5 per cent of its total manufactured product to the petitioner. Therefore the quantity sold does no .....

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substantial portion of the goods and the sale price collected in the second sale exceeds 40 per cent indeed it exceeded 40 per cent in the instant case it would attract tax. The decision of the Supreme Court has no application to the facts of the case in assessing the sale price. At the time when the decision in appeal was reserved for judgment and before the judgment was pronounced the decision of the Supreme Court was rendered. It is contended that by ignoring the ratio laid down by the Suprem .....

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