COMMISSIONER OF SALES TAX Vs. DAYALAL MEGHJI
LAWS(CHH)-2010-2-4
HIGH COURT OF CHHATTISGARH
Decided on February 05,2010

COMMISSIONER OF SALES TAX Appellant
VERSUS
DAYALAL MEGHJI Respondents

JUDGEMENT

- (1.)The Board of Revenue (for short, "the Board") has made this reference under Section 44 of the M.P. General Sales Tax Act, 1958 (for short "the Act, 1958") and has referred following questions of law along with statement of case arising out of the order dated October 20, 1998 passed by the Board for our opinion:
Whether, under the facts and circumstances of the case, the Tribunal was justified in holding that the gunny bags sold along with exempted bidi is also exempted from tax under Section 8(2A) of the Central Sales Tax Act, 1956, read with Explanation annexed to the definition of 'sale price' defined under Section 2(o) of the M.P. General Sales Tax Act

Whether, under the facts and circumstances of the case, the Tribunal was justified to the above in the light of the fact that for inter-State sale the definition of 'sale' as defined under Section 2(g) of the Central Sales Tax Act shall be applicable

(2.)Briefly stated, the facts of the case, as projected in the statement of case, are that during the year 1985-86 the respondent-dealer in the process of inter-State trade of tax-free bidi had also sold gunny bags. The assessing officer allowing tax exemption in the sale of bidi imposed Central sales tax at 11 per cent on the sale proceeds of gunny bags. In the first appeal, the Appellate Deputy Commissioner, Sales Tax, Raipur vide its order dated July 11, 1989 confirmed the order of the assessing officer. However, the Board allowing the appeal of the assessee held that in view of the Explanation to Section 2(o) of the Act, 1958 since the bidi is a tax-free commodity, therefore, gunny bags is also tax-free. However, the instant reference has been made at the instance of the Revenue for our opinion on the questions of law referred above.
(3.)Mr. Deo, learned Government Advocate, submitted that definition of "sale price" given in Section 2(o) of the Act, 1958 is to be considered in the light of Section 2(g) of the Central Sales Tax Act, 1956 (for short, "the Act, 1956") keeping in view the liability to tax for inter-State sale, as provided under Sections 6(1A) and 8(2A) of the Act, 1956. Section 6(1A) of the Act, 1956 clearly stipulates that the dealer shall be liable to pay tax in the course of inter-State trade or commerce notwithstanding that no tax would be leviable under the sales tax law of the appropriate State if that sale had taken place inside the State. Section 8(2A) only provides that Section 6(1A) would not be applicable and exemption from payment of sales tax may be given where goods are tax-free under the Schedule I to the State Act or by notification under Section 12 of the Act.


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