INDIA COPPER CORPORATION LIMITED Vs. STATE OF BIHAR
LAWS(SC)-1960-11-17
SUPREME COURT OF INDIA (FROM: PATNA)
Decided on November 07,1960

INDIA COPPER CORPORATION Appellant
VERSUS
STATE OF BIHAR Respondents





Cited Judgements :-

GILLANDERS ARBUTHNOT AND CO LTD VS. COMMERCIAL TAX OFFICER [LAWS(CAL)-1962-7-20] [REFERRED TO]
COMMISSIONER OF SALES-TAX VS. SAKHIGOPAL COCOANUT GROWER CO-OPERATIVE SOCIETY [LAWS(ORI)-1961-3-4] [REFERRED TO]
C P TIMBER WORKS VS. COMMISSIONER OF SALES TAX [LAWS(MPH)-1964-3-16] [REFERRED TO]
GANPAT PANNALAL VS. COMMISSIONER OF SALES TAX [LAWS(MPH)-1967-1-11] [REFERRED TO]
ASSOCIATED CEMENT CO LTD VS. COMMISSIONER OF SALES TAX [LAWS(MPH)-1975-10-9] [REFERRED TO]
S RAMASWAMI MUDALIAR AND CO VS. STATE OF MADRAS [LAWS(MAD)-1962-1-5] [REFERRED TO]
A V THOMAS AND CO LIMITED OUTCHERLONEY VALLEY ESTATES 1938 LIMITED COIMBATORE VS. DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX TRIVENDRUM:DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX TRIVENDRUM [LAWS(SC)-1962-11-28] [FOLLOWED]
BUJARANG JUTE MILLS LIMITED GUNTUR VS. STATE OF ANDHRA PRADESH [LAWS(SC)-1964-2-24] [REFERRED]
MALAYALAM PLANTATIONS LIMITED QUILON VS. DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX SOUTH ZONE QUILON [LAWS(SC)-1964-3-11] [FOLLOWED]
KURAPATI VENKATASATYANARAYANA VS. STATE OF ANDHRA PRADESH [LAWS(SC)-1969-8-7] [REFERRED TO]
20TH CENTURY FINANCE CORPORATION LIMITED VS. STATE OF MAHARASHTRA [LAWS(BOM)-1989-9-80] [REFERRED TO]
DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX VS. MALAYALAM PLANTATION, LTD [LAWS(KER)-1961-4-20] [REFERRED TO]
CALTEX INDIA LTD VS. EXCISE AND TAXATION OFFICER [LAWS(J&K)-1962-1-3] [REFERRED TO]
B G EXPLORATION AND PRODUCTION INDIA LIMITED VS. STATE OF GUJARAT [LAWS(GJH)-2015-5-78] [REFERRED TO]
XXTH CENTURY FINANCE CORPORATION LIMITED VS. STATE OF MAHARASHTRA [LAWS(SC)-2000-5-99] [REFERRED]
ASSOCIATED AGENCY VS. STATE OF KERALA [LAWS(KER)-1961-3-28] [REFERRED TO]
STANDARD MOTOR PRODUCTS OF INDIA LTD. VS. THE STATE OF MADRAS, REPRESENTED BY THE JOINT COMMERCIAL TAX OFFICER [LAWS(MAD)-1972-8-46] [REFERRED TO]


JUDGEMENT

Ayyangar, J. - (1.)The sole question which arises in this appeal, which comes by way of special leave is as to whether sales under which goods were delivered outside the State of Bihar for the purpose of consumption but not within the State of first delivery or first destination, are exempt from the levy of sales-tax by the Bihar State by virtue of Art. 286(1)(a) of the Constitution as it stood before the recent amendment.
(2.)The India Copper Corporation Ltd. (referred to hereafter as the assessee-company) carries on business in copper and various other materials and mineral products and the office of its General Manager is in the district of Singhbuhum in Bihar. The period covered by the assessment now in dispute is January 26, 1950 to March 31, 1950. The normal practice of the assessee-company was to deposit sums of money from time to time provisionally towards payment of sales-tax in advance and have the amount finally adjusted after the completion of the assessment of each year. The assessee-company followed this practice in respect of the amount of sales-tax due by it for the year 1949-50. For the financial year April 1, 1949 to March 31, 1950, the Superintendent of Sales-tax, Singhbhum, computed the tax liability of the company in the sum of Rs. 3,60,703-4-0 by an order of assessment dated November 13, 1950 and the company made payment of the amount due by it beyond the sums already paid. It would be noticed that this financial year comprised two periods-(1) before the Constitution, viz., April 1, 1949 to January 25, 1950, and (2) the post-Constitution period from January 26, 1950 to March 31, 1950. There is now no controversy as regards the sales-tax payable in respect of sales affected during the pre-Constitution period. The assessee-company however raised a dispute that in respect of the post-Constitution period, it was not liable to pay any sales-tax in respect of sales to buyers, under which though the property in the goods passed within the State, delivery of the goods was effected outside the State of Bihar for consumption outside that State on the ground that such sales were exempted from tax by Art. 286(1)(a) of the Constitution as it originally stood. It addressed a formal letter to the Commissioner of Commercial Taxes, Bihar, on December 30, 1952, making this demand enclosing a statement showing full particulars of the goods sold, the bill numbers, the date and the amount etc., to enable the refund claimed to be calculated. The assessee-company followed it up by a formal petition for review of the assessment order by filing a revised return under S. 12(2) of the Bihar Sales-tax Act together with an application for refund. The departmental authorities rejected those application by order dated July 20, 1953. Further proceedings before the department by way of revision etc. failed to secure to the assessee-company the relief which it claimed and thereafter it filed an application under Arts. 226 and 227 of the Constitution before the High Court of Patna praying for the issue of a writ to quash the order of assessment dated November 13, 1950 and the orders rejecting the prayers for review, reassessment and refund and for a direction to the departmental authorities to refund the sum realised by them in so far as the tax related to sales as a result of which goods were delivered outside the State of Bihar for consumption outside the State of Bihar.
(3.)The learned Judges of the High Court held that the order of the Superintendent of Sales-tax, Singhbhum, dated November 13, 1950, should be set aside and that the matter should go back to the Superintendent to make a reassessment according to law for the post-Constitution period. A further direction was added requiring the respondent to refund to the assessee so much of the tax as had been paid in excess of the amount of reassessment to be made by the Superintendent in accordance with the law as laid down by the Court. In formulating the law applicable, the learned Judges drew a distinction between sales as a direct result of which goods were delivered in a State outside the State of Bihar and consumed in that State and those cases in which the goods thus delivered, were not consumed in the State of first destination but were re-exported from the State of first destination to other States. They held that the first category of sales were covered by the Explanation to Art. 286 (1) (a) of the Constitution and were "inside" the State of first delivery and consequently "outside" the State of Bihar within the meaning of the Article and therefore exempt from tax by the Bihar State. In regard, however, to the second category of sales, it was held that they were not within the Explanation and were therefore outside the constitutional exemption under Art. 286(1)(a).
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