(1.) THIS tax revision case by the petitioner-assessee under section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957, gives rise to the following question of law : "whether, on the facts and in the circumstances of the case, the petitioner-assessee is or is not entitled to the benefits of section 10 of the Central Sales Tax (Amendment) Act (28 of 1969) (hereinafter referred to as 'the Act') ?"
(2.) IN order to appreciate the scope of the question, it is necessary to briefly refer to the admitted facts and circumstances that led to the filing of this revision by the assessee. For the year 1965-66 ending with 31st March, 1966, the assessee, a dealer in butter and ghee, whose turnover was taxable at the point of last purchase under the provisions of the Andhra Pradesh General Sales Tax Act, filed returns every month under rule 14 (a) of the Central Sales Tax (Andhra Pradesh) Rules, 1957, in respect of the turnover of inter-State sales. The total turnover of inter-State sales of butter and ghee for that year was Rs. 2,15,902. 34. In the sale bills, the assessee certified that "the turnover mentioned in item 's' of this bill is liable to tax at our end and will be included in the return of turnover due to be submitted by us to the commercial tax authorities". The assessee, at the time of filing the monthly returns, remitted the sales tax to the State Government along with C forms. In the course of the assessment proceedings, the assessee claimed the exemption of the turnover of its inter-State sales in respect of butter and ghee on the ground that it had not collected tax from its buyers. The Commercial Tax Officer, relying upon the conduct of the assessee in the returning the turnover and paying the tax thereon and in issuing certificates to the effect that the turnover of the goods in the bills are liable to tax at their end and will be included in the return of turnover due to be submitted by them to the commercial tax authorities, rejected the claim of the assessee holding that the non-collection of tax from the buyers was not on the ground that no tax could have been levied and collected. The appeal preferred by the assessee against the order of the Commercial Tax officer was without success. On further appeal, the Sales Tax Appellate Tribunal, on a consideration of the facts and circumstances, found that the assessee had, in fact, not collected the Central sales tax from its buyers but, however, agreeing with the sales tax authorities, it dismissed the appeal holding that the conditions specified in section 10 of the Act were not satisfied. Hence this tax revision case by the assessee.
The contention of Sri S. Dasaratharama Reddy, counsel for the assessee, that his client is entitled to the benefits of section 10 (1) of the Act as no tax had, in fact, been collected from the purchasers, was resisted by Sri Mahadev, counsel appearing for and on behalf of the State on the following grounds :
(i) The conduct of the assessee in issuing certificates that it is liable to pay Central sales tax in respect of the transactions in question, in returning the turnover and paying the tax would establish that the assessee was of the view that Central sales tax was payable on those transactions. (ii) The circumstances of the case would show that it had collected the Central sales tax from the buyers and had not shown the same in the bills.
The answer to the question mainly turns upon the provisions of section 10 of the Central Sales Tax (Amendment) Ordinance, 1969, which has been replaced by the Central Sales Tax (Amendment) Act, 1969 (which came into force on 30th August, 1969), which reads as follows :
" 10. Exemption from liability to pay tax in certain cases.- (1) Where any sale of goods in the course of inter-State trade or commerce had been effected during the period between the 10th day of November, 1964, and the commencement of this Ordinance, and the dealer effecting such sale has not collected any tax under the principal Act on the ground that no such tax could have been levied or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have been levied or collected if the amendments made in the principal Act by this Ordinance had not been made, then, notwithstanding anything contained in section 9 or the said amendments, the dealer shall not be liable to pay any tax under the principal Act, as amended by this Ordinance, in respect of such sale or such part of the turnover relating to such sale. (2) For the purposes of sub-section (1), the burden of proving that no tax was collected under the principal Act in respect of any sale referred to in sub-section (1) or in respect of any portion of the turnover relating to such sale shall be on the dealer effecting such sale. "
(3.) BEFORE examining the scope and application of section 10 of the amending Act, it is profitable to indicate the scheme and object of the amending Act. Prior to the decision of the Supreme Court in State of Mysore v. Lakshminarasimhiah Setty and Sons ( 16 S. T. C. 231 (S. C.)), there was a conflict of opinion amongst several High Courts about the liability of inter-State sales to be taxed under the Central Sales Tax Act. Such controversy was put an end to by the Supreme Court in Lakshminarasimhiah Setty's case ( 16 S. T. C. 231 (S. C.) ). Therein the transactions in respect of powerloom and handloom textiles not liable to be taxed under the Mysore sales tax law were held to be also not liable to be assessed under the Central Sales Tax Act. The expression "levied" in section 9 (1) of the Central Act and in section 5 (3) (a) of the State Act was given one and the same interpretation on the ground that no departure in the manner of levy of tax on the specified goods liable to be taxed at single point under the State Act was made in the Central Act.;