- (1.) This trade tax revision has been filed by the assessee against the order of the Trade Tax Tribunal passed in Second Appeal No. 88 of 1998. The second appeal was directed against the order of the Deputy Commissioner (Appeals), Trade Tax, Allahabad, wherein it was held that since the transaction was covered by section 6(2) of the Central Sales Tax Act, the assessee was exempted from payment of tax thereon. The Tribunal under the impugned order allowed the appeal of the Department. It has recorded that since there was an agreement between the assessee and the Ganga Pollution Control Unit qua the goods in question being supplied at Allahabad. The goods were purchased by the assessee from a dealer outside the State of U.P., the transfer of title during transit was in breach of the terms and conditions of the agreement between the parties and, therefore, violative of section 23 of the Indian Contract Act being opposed to public policy as it was so done for evading the tax. It has also been recorded that the transfer was in violation of section 34 of the Trade Tax Act. Consequently such transfer by endorsement has been held to be null and void. The second appeal of the Department has been accordingly allowed.
(2.) Challenging the order so passed counsel for the assessee submits that if there is an alleged breach of terms and conditions of contract between the assessee and the Ganga Pollution Control Unit, the same has absolutely no bearing on the exemption as provided under section 6(2) of the Central Sales Tax Act. He explains that section 34 of the Trade Tax Act applies to movable properties only.
(3.) Shri B. K. Pandey, counsel for the Department, disputes the contention so raised. He submits that there was a written agreement between the assessee and the Ganga Pollution Control Unit for supply of goods at Allahabad. The assessee made purchases from a dealer outside the State of U.P. Such goods during transit could not have been transferred to Ganga Pollution Control Unit by endorsement during transit. The purpose is to avoid the tax liability. He submits that in the facts of the case section 6(2) had no application. The Tribunal has rightly come to a conclusion that the order of the first appellate authority granting the exemption was unsustainable. However he could not dispute that section 23 of the Contract Act and section 34 of the U.P. Trade Tax Act, 1948, had no application in the facts of the case.;