UNION OF INDIA Vs. K G KHOSLA AND COMPANY LIMITED

JUDGEMENT

(1.) This appeal by certificate raises an interesting controversy between the sales tax authorities in the Union Territory of Delhi and those in Haryana, the question being as to which of the two authorities can asses respondent 1 to sales tax. One of the reliefs sought by respondent 1 is that until the sales tax authorities of the two territories settle their differences, no sale tax should be levied or recovered from it since, it does not know to whom to pay the tax. This controversy arises on the following facts.

(2.) Respondent 1 is a private limited company called K.G. Khosla and Co. (P.) Ltd, having its head office in the Union Territory of Delhi, at 1, Deshbandhu Gupta Road, New Delhi. The company carries on business in Air Compressors and garage equipment which it manufactures in its factory at Faridabad, which was formerly in the State of pubjab and is now a part of the State of Haryana.

(3.) For the purposes of sales tax, respondent 1 is registered as a dealer both in the Union territory of Delhi and in the State of Haryana. If filed returns of sales tax with the Sales Tax Authorities in Delhi, since, according to it, the sale of goods manufactured in the factory at Faridabad was being effected from Delhi by its head office. The sales tax was being paid by the company under the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi, on the basis that the sales effected by the company were intra-States sales within the territory of Delhi. On November 24, 1965, however, the Sales Tax Assessing Authority at Gurgaon, which was then in the State of Punjab but which subsequently became a part of the State of Haryana, sent a notice to the company under sections 11 and 14 of the East Punjab General Sales Tax Act, 1948 and Rule 33 made thereunder that, in respect of the period commencing on April 1, 1961 and ending with the year 1964-65, the sales made by the company were liable to assessment in Haryana. On March 13, 1968 an assessment was made by the Assessing Authority at Faridabad on the basis that the sales effected by the company were inter-State sales liable to be assessed to sales tax under the Central Sales Tax Act, 74 of 1956. An appeal against the order of assessment is said to be pending.