SUKHDEV SINGH KANG, J. - (1.) M /s. Mehta Group of Industries, Bahadurgarh, the applicant herein, is engaged in the manufacture and sale of saccharin (a substitute for sugar), colours - which are mixed in eatables and drinks, and straws. It got itself registered as a dealer with liability to pay tax with effect from November 4, 1970. For the assessment year 1970-71, it filed two quarterly returns for the 3rd and 4th quarters. It claimed that goods worth Rs. 99,641. 65 had been transferred to its head office at Delhi and as such they were not exigible to tax. The Assessing Authority classified these goods, which had been avowedly transferred to the Delhi office, in two categories. In the first category were put those sales which were made to buyers outside the Union Territory of Delhi. In all these cases, the goods received from the factory at Bahadurgarh were despatched to the purchasers in various States on the very day they were received at Delhi. In one or two cases they were despatched a day or two later. The Assessing Authority concluded that the movement of the goods from Bahadurgarh in Haryana had been occasioned by prior orders. The Assessing Authority included the goods sold to the customers at Delhi in the second category. He observed that there was a numerical similarity between the goods despatched from Bahadurgarh and those sold at Delhi on a particular day. Generally, the goods had been sold in bulk on the same day. Sales were in favour of three customers. He concluded that these goods had also been moved in pursuance of pre-existing orders. The applicant-dealer had also claimed that sales amounting to Rs. 6,687 were made against 'c' forms and were liable to tax at the rate of 3 per cent and not 10 per cent. This contention was accepted. However, regarding the remaining sales an additional demand was created. Aggrieved, the applicant-dealer went up in appeal and contended that the goods had been only transferred from the factory at Bahadurgarh in Haryana to its head office at Delhi, and these were not inter-State sales. The goods were manufactured in the ordinary course and not to the specifications of the buyers. The Deputy Excise and Taxation Commissioner was informed by the applicant-dealer that it had no documentary evidence to show as to how the goods had moved from Delhi to various places in other States. He was also not satisfied with the plea of the applicant-dealer that the various sales at Delhi had not resulted from any specific orders. The appeal was declined.
(2.) IN the second appeal before the learned Tribunal, the applicant-dealer raised the very same pleas, i. e. , that the goods had been transferred from its factory at Bahadurgarh (Haryana) to its head office at Delhi and sold to various customers. There was no previous order. It was further pleaded that though before the Assessing Authority the orders of the sales tax authorities of the Union Territory, Delhi, levying tax at the rate of 3 per cent on inter-State sales were produced, yet he had levied tax on those sales at the rate of 10 per cent. It was contended that onus of proving that the sales in question were exigible to tax lay heavily on the department and they had miserably failed to discharge that onus. These submissions did not find favour with the learned Tribunal. Taking into account the facts and circumstances of the case, the learned Tribunal recorded a finding of fact that there were prior contracts between the buyers and the dealer and in pursuance of those contracts, the goods moved from Bahadurgarh in the State of Haryana to its head office at Delhi. He was particularly impressed by the numerical similarity between the goods transferred from Bahadurgarh to the parties in Delhi and the fact that the goods had been sold either on the very same day when they arrived at Delhi or within a day or two thereof and that too in most cases in the same quantities which were received from the factory.
(3.) ON the application of the applicant-dealer under section 42 of the Haryana General Sales Tax Act, 1973, the learned Tribunal has stated the case and referred the following two questions for our opinion : " (1) Whether, in the facts and circumstances of the case, the movement of goods constitutes sale in the course of inter-State trade and commerce warranting imposition of tax under section 3 (a) read with section 9 of the Central Sales Tax Act, 1956 ? (2) Whether, in the facts and circumstances of the case, sales effected by the firm at Delhi in the course of inter-State trade and commerce and tax paid thereon at 3 per cent against 'c' form could be assessed at 3 per cent or 10 per cent ?" ;