- (1.) AS directed by the Full Bench of this Court by its order dated 25th of january, 1974, passed under Section 15 (3) of the Rajasthan Sales Tax Act, 1954, hereinafter called the Act, in F. B. Civil Sales Tax Reference Application no. 31 of 1969, the Board of Revenue has referred the following question of law to this Court:- "whether when a registered dealer sells to another registered dealer and the first registered dealer is exempt from payment of sales tax, the sale by the second registered dealer is deemed to be sale at the first point and the sale by the first registered dealer exempted from payment of tax would not be taken into consideration for the purpose of sales tax?" as the question referred to us is a question of law, we need not give the facts leading to this reference in detail. It will suffice to mention material facts which are necessary for the decision of the question referred to us.
(2.) THE applicant a registered dealer was assessed on sales worth Rs. 6906. 26 in respect of the spare cycle parts purchased from another registered dealer exempted from payment of tax under a Government Notification No. F. (134)Es 58-1 dated 1-1-60 in the assessment year 1960-61 by the Sales-tax Officer jaipur City Circle A. The Sales-tax Officer was of the view that the manufacturer-dealer alone could claim exemption under the aforesaid government Notification dated 1-1-60 and the first point of tax devolved upon the applicant-assessee. The applicant being aggrieved, went in appeal before the learned Deputy Commissioner Commercial Taxation (Appeals) who held that the first point in series of sales was in the hands of the manufacturer registered dealer and so no sales-tax could be charged on the sales effected by him. It was now the turn of the Department which took the matter by way of revision before the Board of Revenue. The Board of Revenue accepted the revision and set aside the order of the Deputy Commissioner, Commercial Taxation (Appeals) and restored that of the assessing authority. The Division Bench of the Board of Revenue relied upon a Division Bench decision of this Court, namely, Nagaur Sahar Kendriya Sahakari Kar Vikraya Sangh v. The State of rajasthan, ( (1968) 21 STC 114) (Raj ). The applicant thereupon moved an application under Section 15 (1) of the Act before the Board of Revenue requiring it to refer the question of law mentioned in his application to this court. The Board of Revenue, however, did not accede to the request of the applicant as in its view the question proposed to be referred to this Court was already settled in Nagaur Sahar Kendriya Sahakari Kar Vikraya Sangh's case. The assessee therefore moved an application under Section 16 (2) of the Act in this Court whereupon Full Bench of this Court directed the Board of Revenue to state the case and refer the question of law as stated above. The Board of revenue in compliance with the above direction has referred the above-mentioned question for our decision.
(3.) MR. S. M. Mehta learned counsel for the assessee contends before us that the tax payable by a dealer under Section 5 of the Act is at a single point in the series of sales by successive dealer as may be prescribed by the Rules. He submits that under Rule 15 of the Rajasthan Sales Tax Rules, hereinafter called the Rules, the tax payable under the Act is at the first point in series of sales and the first point in series of sales having exhausted in the hands of the manufacturer-seller no sales-tax could be charged from the assessee as his sale was a second point in the series of sale.;