S MOHAMED IBRAHIM HADHEE Vs. STATE OF MADRAS

JUDGEMENT

(1.) WE have in this case come to the conclusion, for the reasons which will presently appear, that it should be allowed to the extent of a turnover of Rs. 27, 735.58 and that the assessing authority will consider afresh whether this part of the turnover was included in a turnover of Rs. 80, 615 brought to tax as constituting inter-State sales for which declarations in Form C have not been filed.

(2.) THE matter relates to the assessment year 1958-59. THE assessee during the relevant period was a registered dealer both in the State of Kerala and this State, carrying on business in arecanut seeval. He had his head office at Pattambi in the State of Kerala. THE course of his business was, he brought arecanuts from the State of Kerala to Kuniamuthur in the State of Madras, converted the same into seevals, and effected inter-State sales by despatching the goods by rail. He filed a return in Form I and his accounts which were checked, disclosed a turnover of Rs. 86, 929.25. THE eventual finding of the Tribunal is that out of this figure, a turnover of Rs. 80, 615 related to inter-State sales, part of which occasioned the movement of the goods from the State of Madras, and the rest were first sales effected by transfer of documents in the course of movement of the goods, commencing from this State. THE assessee failed to file declarations in Form C with the result the entire turnover of Rs. 80, 615 has been brought to charge under section 8(2) of the Central Act at 7 per cent. THE assessee's case was that this turnover was included in the turnover for the assessment year 1958-59 returned to the Kerala Sales Tax Authorities and charged to tax there under the Central Act on production of declarations in Form C. This contention did not prevail with the revenue authorities and also the Tribunal and in their view the appropriate State that could properly charge the turnover is the State of Madras, and that the declarations in C Form covering the turnover not having been filed in the prescribed manner and before the prescribed authority the turnover would be liable to tax in Madras at 7 per cent. In the course of his order, the Appellate Assistant Commissioner stated that it was likely that the transactions referred to by the Sales Tax Officer, Perintalmanna, in respect of which C Forms were produced before that officer were quite different from those effected from Kuniamuthur in Madras State.

(3.) WE are unable to countenance counsel's submissions except that there can only be one charge under the Central Act on an identical inter-State turnover. Section 6 which is the charging section, is subject to the other provisions of the Act. Before and after the amendment by Act 31 of 1958 that State, from which the goods moved pursuant to a sale, is an appropriate State. Section 9(1) as amended by Act 31 of 1958 says that the Central tax shall be levied and collected by the Government of India in the manner provided in sub-section (3) in the State from which the movement of the goods commenced. That will also be the appropriate State in respect of the first sales effected by transfer of documents during movement of goods. Under section 8(4) the benefit of the rate at 1 per cent. will be available to inter-State sales of declared goods only if the conditions prescribed thereunder are complied with and one of them is that a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority is furnished to the prescribed authority in the prescribed manner. Sub-section (3) of section 9 applies to the Central assessment proceedings, the statutory procedure obtaining in the appropriate State, for purposes of its local Act. What clearly emerges from these provisions is that, although except where the multi-point tax is attracted under section 6, there can only be a single levy in the prescribed manner on identical turnover of inter-State sales. But the levy and collection will have to be made by the appropriate State which is the State from which the goods have moved pursuant to the sale, and where a concessional rate under section 8(1) is claimed, the conditions therefor have to be fulfilled which include filing of declarations in C Form in the prescribed manner and before the prescribed authority in the appropriate State. In view of this scheme of charge, assessment and collection, section 9(4) enacts that the proceeds in any financial year of the tax levied and collected on behalf of the Government of India shall be assigned to the appropriate State which levied and collected the same and that State shall retain such proceeds. It follows, therefore, that a plea that a wrong State has already assessed will be no answer to an appropriate State bringing to tax transactions liable to be brought to charge by that State.