KUMARDHUBI ENGINEERING WORKS LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) This application arises out of a reference made by the Board of Revenue, Bihar, under Section 21 (3) of the Bihar Sales Tax Act of 1944 read with Section 25 (3) of the Bihar Sales Tax Act, 1947. The reference has been made in pursuance of an order of this Court, dated the 13th of February 1950, under which the Board of Revenue was asked to state a case in regard to certain questions formulated in that order.

(2.) The facts giving rise to this application are as follows: The petitioner, Messrs. Kumardhobi Engineering Works, Ltd., thereinafter called the Limited Company) has been assessed to Sales Tax on a total taxable turnover of Rs. 23,88,707 for the year ending the 31st of March, 1947. The Limited Company returned a gross turnover of its business at Rs. 57,40,630/4/-, out of which, after claiming certain deductions, its return showed a taxable turnover of Rs. 4,22,356/4/3- only. One of the deductions claimed was a sum of Rs. 27,51,510/12/9-under Section 5 (2) (a) (ii) of the Act which included a sum of Rs. 19,61,529/12/0, on account of sales of ropeways and their parts to collieries which were registered under the Bihar Sales Tax Act 1944. As the assessment period relates to 1946-47, we are concerned in this case mainly with the provisions of the Bihar Sales Tax Act of 1944. The Sales Tax Officer refused to allow the deduction on the ground that the articles on account of which deduction was claimed were not shown in the certificate of registration of the purchasing dealers. The assessee then appealed to the Commissioner of Sales Tax, Chota Nagpur, who dismissed the appeal, and finally it moved the Board of Revenue with a similar result. It then applied to the Board of Revenue for a reference to this Court on certain questions of law which it alleged arose out of the order of the Board, but the Board refused to make a reference until this Court at the instance of the assessee called upon the Board to state a case. It would appear from the facts narrated above that the dispute between the assessee and the Sale Tax Department is now confined merely to a claim for deduction in respect of a sum of Rs. 19,61,529/12/0 on account of sales and installations of ropeways and ropeways parts to collieries registered under the Act; and this deduction is claimed out of the gross turnover on the ground that it fell within the provisions of Section 5 (2) (a) (ii) of the said Act.

(3.) This Court in its order dated the 13th of February, 1950, formulated the following points on which the Board of Revenue was directed to state a case: