PETITIONER:
MANGANESE ORE (INDIA) LTD. A
Vs.
RESPONDENT:
THE REGIONAL ASSISTANT COMMISSIONER OF SALES TAX,JABALPUR
DATE OF JUDGMENT19/12/1975
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
KHANNA, HANS RAJ
CITATION:
1976 AIR 410 1976 SCR (3) 99
1976 SCC (4) 124
CITATOR INFO :
RF 1980 SC2056 (61)
ACT:
Central Sales Tax Act, 1956-S. 5(1) read with Art.
286(1)(b) of the Constitution of India-Contract of sales
occasioning export are eligible to tax under s. 5(1) of the
Central Sales Tax, 1956-Sales through an intermediary
buyer does not “occasion export”.
“Stare decisis” doctrine of, is a valuable principle of
precedent requiring special or extrodinary reasons to depart
from.
Central Sales Tax Act, 1956 Sec. 3(a), 4(2)(b) and 9
Sale in the course of inter-state trade or commerce
conditions to be satisfied before a sale can be said to take
place. Central Sales Tax Act, 1956-Sec. 3(a)-”Movement of
goods”-Whether it makes a distinction between unascertained
goods and future good-scope of s. 3(a).
Penalties for belated return under the Central Sales
Tax Act when not provided for, the State cannot take
recourse to under the State Sales Tax Act- Sec. 10 (a) of
the Central Sales Tax Act, 1956.
“oriental mixture-term used in the contract of sale,
whether “manganese ore” and liable to tax.
HEADNOTE:
The appellant-Manganese ore (India) Ltd. (a commercial
venture where the Government of India, Government of
Maharashtra and Government of Madhya Pradesh hold shares in
the ratio of 17 per cent each) entered into four types of
“contracts of sale” with buyers in India and outside India
for selling the manganese ores extracted from the mineral
mines leased out to it and situated li in the States of
Madhya Pradesh and Maharashtra. They were (a) category I are
the contracts where the appellant directly sent the ores to
two foreign companies on f.o.b. terms; (b) category II
represents contracts which were entered into by the
appellant with tho Mineral and Metals Trading Corporation of
India Ltd., under which the appellant despatched manganese
ore of varying percentage to the M.M.T.C., f.o.b. Bombay and
the M.M.T.C. in turn exported the goods to foreign buyers;
(c) category III relates to the sales to M/s. Ram Bahadur
Thakur & Co., Bombay and other buyers who in their turn sold
the goods to M.M.T.C. for export; and (d) category IV
relates to the sales in favour of the buyers within the
territories of India, but outside the State.
According to s. 3(a) ant 9 of the Central Sales
Tax Act, the State of Madhya Pradesh was competent to levy
tax on the sales in the course of inter-state trade or
commerce. Under s. 5(1) of the Central Sales Tax Act, sales
occasioning export or in the course of export are exempt
from the purview of the Act.
In respect of categories II to IV, the Sales Tax
Authorities levied tax under the Central Act, holding that
they were in the course of inter-State trade or commerce and
imposed a penalty of Rs. 1,000/- under the Madhya Pradesh
General Sales Tax Act for belated filing of returns. The
writ petition filed by the assessee in the Madhya Pradesh
High Court failed.
Dismissing the appeal by special leave and quashing the
penalty imposed, the Court.
^
HELD: As no export was involved so far as the buyers in
India are concerned, s. 5(1) of the Central Sales Tax Act
has no application at all. This
100
point is no longer “res integra” in view of the Constitution
Bench division of this Court in Md. Serajuddin and others v.
State of Orissa, [1975] 2 SCR 47 Where the sale Y/as not
directly and substantively connected with export, and where
between the seller and ultimate buyers intermediaries are
involved, such a sale would not occasion any export and
would not fall within the purview of s. 5(1) of the Central
Sales Tax Act. [102 G, 103 C-D]
Md. Serajuddin & others v. State of Orissa, [1975] 2
SCR, 47, applied.
(2) The doctrine of “Stare Decisis” is a very valuable
principle of precedent which cannot be departed from unless
there are extraordinary or special reasons to do so, and
more so to reconsider a recent constitutional decision. [103
G]
(3) Before a sale can be said to take place in the
course of inter-state trade or commerce, the following
conditions must be satisfied: (1) that there is an agreement
to sell which contains a stipulation express or implied
regarding the movement of the goods from one State to
another. (ii) that in pursuance of the said contract the
goods in fact moved from one State to another. and (iii)
that ultimately a concluded sale takes place in the State
where the goods are sent which must be different from the
State from which the goods move. If these conditions are
satisfied, then by virtue of s. 9 of the Act, it is the
State from which the goods move which will be competent to
levy the tax under the provisions of the Act. [104 D-F]
Balabhgas Hulsachand and others v. Stare of Orissa,
[1976] 2 SCR, 939 relied on.
(4) So far as s. 3(a) of the Central Sales Tax Act is
concerned, there is no distinction between unascertained and
future goods and goods which are already in existence, at he
time when the sale takes place these goods have come into
actual physical existence. [108 Bl
Balabhgas Hulsachand and others v. State of Orissa,
[1976] 2 S.C.R., 939 applied.
(5) In the absence of any provision for penalty under
the Central Sales Tax Act itself it is not open to the Sales
Tax Authorities to press into the service the provisions of
the State Sales Tax. [108 G]
(6) In the instant case, a careful perusal of the
agreements would clearly show that what the buyers wanted
and what was actually sold to them was manganese are and
after all the goods were stocked together, the required
percentage under the contracts of sale automatically come
into existence. The word “oriental mixture” is merely a
technical terminology or just another name for what is known
in the commercial world as manganese ore. therefore, It is
clear that it was manganese ore and manganese ore alone
which was sought to be sold by the appellant to various
buyers in India. The mere fact that certain specific
contracts have been mentioned does not alter the character
and quality of the goods that are actually supplied by the
appellant to its various purchasers. In these
circumstances, therefore, the theory of the ore supplied by
the appellant being only one constituent and not the entire
goods sold is illusory. [105 D-F, 107 B-D]
Central Provinces Manganese ore Co., Ltd. v. The State
of Maharashtra, S.T. Ref. 17-20/1964 decided on 7-4-1969 by
Bombay High Court, Commissioner of Sales Tax, Eastern
Division Nagpur v. Hussenali Adamji and company and
another, 10 S.T.C. 297, (Distinguished).
JUDGMENT:
CIVIL APPELLATE JURISDICTION: :Civil Appeal No. 599 of
1975. (Appeal by special leave from the judgment and order
dated the 23-4,1974 of the Madhya Pradesh High Court at
Jabalpur in MiSC. Petition No. 542 of 1971.
S. V. Natu, D. K. Kambarkar and V. N. Ganpule, for the
appellant.
Ram Panjwani and H. S. Parihar, for the respondent.
101
The Judgment of the Court was delivered by
FAZAL ALI, J.- This is an appeal by special leave
against the judgment and order of the Madhya Pradesh High
Court dated April 23, 1974 dismissing the writ petition
filed by the appellant before the High Court for quashing
the order of the Assessing Authorities imposing tax under
the Central Sales Tax Act, 1956 on the basis of a number of
sales made by the appellant Company in pursuance of
multifarious contracts of sale. The appellant Company was
formed in pursuance of an agreement dated June 8, 1962
between the President of India and the Central Provinces
Manganese ore Company Limited. Before this agreement the
said Company which will be hereafter referred to as the
‘C.P.M.O.C.’ was a private company incorporated in the
United Kingdom and carried on the business of extracting
manganese ore from several mines in the erstwhile States of
C.P. & Berar and Bombay. By virtue of the agreement referred
to above a new Company was formed under which the Government
of India, the Government of Maharashtra and the Government
of Madhya Pradesh held shares in the ratio of 17% each
whereas the original Company C.P.M.o.C. retained shares to
the extent of 49%. Thus the position was that in the present
commercial venture the Central Government had preponderance
of share. The appellant, after the formation of the new
Company, was known as Manganese ore (India) Ltd. which will
hereafter be referred to as the M.O.I.L.. Fresh leases. to
extract the minerals from the various mines were issued by
the Government in favour of the M.O.I.L.. and the Company
entered into contracts with buyers in India and outside for
selling the manganese ore extracted from the various mines
situated in the States of Madhya Pradesh and Maharashtra.
A close analysis of the contracts entered into by the
appellant Company and the business carried on by it would
manifestly reveal that the contracts may be divided into
four separate and clear categories.
Category-I are the contracts by which the manganese ore
extracted by the appellant company is sent directly to a
foreign company known r as M/s. Philips Brothers on f.o.b.
terms. Another such contract was entered into by the
appellant with B.I.S.C.(Ore) Ltd., London for sale of
oriental manganese ore f.o.b. Visakhapatnam. Copies of these
contracts were filed before the High Court as Annexures Q &
R. The Regional Assistant Sales Tax Commissioner accepted
the contention ,. . Of the appellant that so far as the
sales under these contracts were concerned, they occasioned
export and were clearly exempt from the Central Sales Tax
Act as they fell within the purview of s. 5(1) of the said
Act. We might also mention here that the main dispute
between the parties is regarding the applicability of ss.
3(a), 4(2) (b) and 9 of the Central Sales Tax Act,
according to which the State of Madhya Pradesh was
competent to levy tax on the sales made by the appellant in
the course of which the manganese ore moved from the State
of Madhya Pradesh to other States in India. The main
contention of the appellant before the High Court as also
before the Sales Tax Authorities was that all these sales
were outside sales and not in the course of
102
inter-State trade or commerce and therefore the provisions
of the Central Sales Tax Aat did not apply. The Assistant
Sales Tax Commissioner negatived the contention of the
appellant and hence a writ petition was filed before the
High Court. We might also mention that the writ petition was
filed by the appellant company before the High Court even
before taking recourse to the normal procedure laid down
under the Madhya Pradesh General Sales Tax Act, 1958. This
was obviously done because the appellant chose to assail the
levy of tax on the ground that the Sales Tax Authorities did
not possess any jurisdiction to impose the tax inasmuch as
the sales were not at all covered by the Central Sales Tax
Act. We have stressed this fact particularly because before
the High Court the appellant raised some questions relating
to the merits of the matter which could be properly agitated
before an Appellate or Revisional authorities under the
Madhya Pradesh General Sales Tax Act. Thus so far as the
sales in Category-I are t. concerned, the Assistant Sales
Tax Commissioner accepted the plea of the appellant and did
not levy any tax on those sales. These sales, therefore, did
not form the subject matter of the present appeal before us.
This position was conceded by both sides.
Category-II represents contracts which were entered
into by the appellant company with the Minerals and Metals
Trading Corporation of India Ltd.- hereinafter referred to
as MMTC under which the appellant despatched manganese ore
of varying percentage to the MMTC f.o.b. Bombay. After
having received the goods from the appellant the MMTC
exported the goods to foreign buyers. The copies of the
contracts comprising these sales are Annexures N, O and P,
before the High Court.
Category-III relates to sales as per agreements copies
of which are Annexures S, T and U by which the appellant
sold to M/s Ram Bahadur Thakur & Company, Bombay and other
buyers which in turn sold the goods to the MMTC.
As regards these two categories, Category II and
Category III, the appellant advanced two-fold contentions
before us. In the first place it was argued that as the
goods were eventually exported by the buyers from India to
foreign countries, therefore, the sales made by the
appellant were not inter-State sales but sales which
occasioned exports and, therefore, fell within s. 5(1) of
the Central Sales Tax Act. The High Court after
consideration of various aspects of the matter overruled the
contention of the appellant and held that as no export was
involved so far as the sales made by the appellant to the
buyers in India were concerned, therefore, s. 5(1) had no
application at all. This matter need not detain us further,
because it is no longer res integra and is now completely
concluded by a Constitution Bench decision of this Court in
Md. Serajuddin and others v. State of Orissa(1) where Ray,
C.J., speaking for the majority observed as follows:
“To establish export a person exporting and a
person importing are necessary elements and the course
of export is
(1) [1975] 2 S.C.R. 47
103
between them. Introduction of a third party dealing
independently with the seller on the one hand and with
the importer on the other breaks the link between the
two for then there are two sales one to the
intermediary and the other to the importer. The first
sale is not in the course of export because the export
commences with the intermediary. The tests are that
there must be a single sale which itself causes the
export or is in the progress or process of export.
There is no room for two or more sales in the course of
export.
x x x x x
The expression “occasions” in Section S of the Act
means the immediate and direct cause. But for the
contract between the corporation and the foreign buyer,
there was no occasion for export. Therefore, the export
was occasioned by the contract of sale between the
Corporation and the foreign buyer and not by the
contract of sale between the Corporation and the
appellant.”
The Court clearly held that where the sale was not directly
and substantially connected with export, and where between
the seller and ultimate buyers intermediaries were involved,
such a sale would not occasion any export and would not fall
within the purview of s. 5(1) of the Central Sales Tax Act.
It is not disputed that all the sales covered by Category II
and Category III were actually made by the appellant not to
any foreign exporter but to buyers inside India whether it
was MMTC or whether they were other private firms. In these
circumstances, therefore, the sales mentioned above could
not be said to be sales which occasioned any export. The
High Court, therefor, rightly found that these sales were
completed within the territory of India when the goods
passed to the buyers. The High Court further found as
follows:
“For these reasons, it cannot be held that these
sales occasioned the export within Section 5(1) of the
Central Sales Tax Act and were sales in the course of
export.”
The High court relied on a number of authorities, but in
view of the decision of this Court in Md. Serajuddin’s
(supra) case it is not necessary for us to consider those
authorities at all, because the matter has now been
concluded by a decision of this Court. In fact this position
was conceded by Mr. Natu appearing for the appellant but he
tried to persuade us to refer the case to a larger Bench for
reconsidering Md. Serajuddin’s (supra) case. We are,
however, unable to agree with the prayer made by the learned
counsel for the appellant because this Court has given its
decision recently and the doctrine of stare decisis is a
very valuable principle of precedent which cannot be
departed from unless there are extra ordinary or special
reasons to do so. We are unable to find any special reasons
for reconsidering Md. Serajuddin’s case (supra),
particularly when this Court has laid down the rule, namely,
that where the sale is in fact and in law a pure inter State
sale, it cannot be treated to be a sale occasioning export.
This, therefore, disposes of the first plank of attack made
by the appellant
8-390SCI/76
104
on the judgment of the Madhya Pradesh High Court so far the
sales contained in Categories II and III are concerned.
Category-IV is in respect of contracts of sale, copies
of which are Annexures 1 to 7 before the, High Court. These
sales were admittedly made by the appellant in favour of the
buyers within the territory of India but outside the State.
It was, however, contended that as the goods purported to
have been sold to the buyers did not in fact move from the
State of Madhya Pradesh, therefore, there was no inter-State
sale, but only an inside sale in the State where the goods
were delivered, and therefore the State of Madhya Pradesh
had no jurisdiction to levy tax under the Central Sales Tax
Act. The same arguments were applied to Categories II and
III on the ground that if the sales comprised in Categories
II and III were not sales in the course of export they also
were not inter-State sales, because the goods which moved
from the State of Madhya Pradesh were not actually the goods
which were sought to be sold to the buyers in other States
in India. The High Court has considered this matter at great
length and has relied on a number of authorities. In a
recent judgment of this Court in Balabhgas Hulaschand and
ors. v. State of orissa(1), after review of all the
authorities on the point, this Court held as follows:
“That the following conditions must be satisfied
before a sale can be said to take place in the course
of inter-State trade or commerce:
(1) that there is an agreement to sell which
contains a stipulation express or implied
regarding the movement of the goods from one
State to another;
(ii) that in pursuance of the said contract the
goods in fact moved from one State to
another; and
(iii)that ultimately a concluded sale takes place
in the State where the goods are sent which
must be different from the State from which
the goods move.
If these conditions are satisfied then By virtue
of s. 9 of the Central Sales Tax Act it is the State
from which the goods move which will be competent to
levy the tax under the provisions of the Central Sales
Tax Act.”
On a careful consideration of the facts and circumstances of
the present case we are satisfied that the present case is
directly covered by the decision of this Court in Balabhgas
Hulaschand’s case(1).
The learned counsel for the appellant sought to
distinguish Balabhgas Hulaschand’s case(1) on the ground
that what was despatched from Madhya Pradesh was merely
managanese ore of a particular percentage but that was not
the property which was sought to be purchased by the buyers
in other States. It was contended that under the
(1) [1976] 2 S.C.R. 939.
105
contracts or sale the property which was to be sold was
continental A mixture which consisted of various kinds of
rocks or manganese ore which were mixed together. What
therefore was actually despatched, according to counsel for
the appellant, was merely one of the constituents of the
goods purported to be sold and not the goods which were ores
purchased by the buyers. The High Court in its well reasoned
judgment has fully considered this aspect of the matter and
has rightly pointed out that there is no mechanical or
scientific process by which the continental mixture is made.
According to the appellant itself the mixture comes into
existence automatically by piling up manganese ore
despatched from various States one after the other. In other
words, the position is that suppose 1000 tons of manganese
ore is sent from Madhya Pradesh and another thousand tons
from various mines from Maharashtra, when these ores are
stocked at one place by being piled up one upon another they
automatically produce continental mixture with various
constituents properties and percentages required.
Mr. B. Sen appearing for the respondent submitted that
what was I actually sold was manganese ore of an average
percentage and it was not right to say that actually one of
the constituents of the manganese ore was despatched by the
appellant from various mines situated in the State of Madhya
Pradesh. In fact, manganese ore like iron or coal is a
special type of commodity which is not capable of undergoing
any scientific process of mixing up resulting in an end
product. We find ourselves in complete agreement with the
argument of the learned counsel for the respondent. It seems
to us that the word ‘oriental mixture’ which has no doubt
been used in some of the agreements produced by the
appellant is a misnomer, because this is merely a technical
terminology or just another name for what is known in the
commercial world as manganese ore of an average or standard
percentage of about 49%. A careful perusal of the agreements
would clearly show that what the buyers wanted and what was
actually sold to them was manganese ore and after all the
goods were stocked together the required percentage under
the contracts of sale automatically came into existence. For
instance, the relevant provisions of one of the contracts,
which has been quoted by the High Court, runs thus
“QUALITY: The average quality of the ore to be
supplied by sellers should be, without guarantee,
49.25% Manganese, 0.15% Phosphorus, 9% Silica and 7.5%
Iron PROVIDED ALWAYS that as such supplies are
furnished by mixtures of ores from the sellers’ several
mines the aver age quality of the samples taken from
deliveries from. each mine shall from the basis of
settlement.”
It would be seen that what was to be supplied was only
manganese ore of the percentage of 49.25%. Properties like
Phosphorus, Silica and Iron are inherent constituents of
manganese ore and are bound to. be found in every manganese
ore. Similarly in another contract
106
which appears at p. 117 of the Paper Book and which was
entered into by the appellant with the MMTC the relevant
passage runs thus:
“The execution of this Sale Agreement is dependent
on the sellers being able to rail the ores from the
mines to the port for shipment and also of the grant of
any necessary export permit.
1. QUALITY: 30,000 (Thirty thousand tonnes(1) of 1000
kgs. each, 5% more or less at Buyers’ option.
2. SPECIFICATIONS:
Mn. basis 48 %
rejection below 46%
Fe. 10% maximum
Silica+Alumina 14% maximum
Phos. 0.18 % maximum”
Here also it would appear that the agreement is only for
sale of manganese ore. Although a certain percentage is
mentioned but that percentage is derived automatically when
the manganese ores are stocked together. In most of the
other contracts which have been filed- by the appellants,
for instance, in another contract which has been entered
into between the appellant and the MMTC on February 22, 1968
what is sold is ‘oriental grade manganese ore’. Similarly in
another contract between the appellant and Ms Ram Bahadur
Thakur & Company dated February 28, 1968 the property sold
is about 25,000 Metric Tonnes of oriental Mixture of
Manganese ore. In another contract which appears at p. 147
of the Paper Book and which is between the appellant and the
Universal Ferro & Allied Chemicals Ltd., Tumsar Road, what
is sold is 12,000 metric tonnes of Manganese ore. There was
another stipulation as to delivery in respect of this
contract as follows:
“The sellers will load the component ores from
their mines into the wagons which will be arranged for
by the buyers who shall be the consignors, in the name
of the sellers, who shall be the consignors, at such
mines’ sidings and for such quantities as may be
declared from time to time by the sellers’ Managing
Director, the destination of all the ,, wagons being
Tumsar in the State of Maharashtra and the railway
freight being payable by the buyers at the destination.
As aforesaid, after the loading of the component ores
into wagons the buyers shall be responsible in all
respects in respect of the goods so loaded into the
wagons.”
The stipulation in this contract that after loading the
component ores into the wagons the buyers shall be
responsible in respect of the goods
107
is a clear pointer to the fact that the manganese ores that
were loaded into the wagons were undoubtedly the goods
which were purported to be sold under the contract of sale,
otherwise the buyers would not have taken the responsibility
for the ores loaded into the wagons if it was really not the
ores which the appellant were to supply but merely a
constituent thereof.
A close perusal of the various contracts of sale
entered into by the appellant would, therefore, clearly
disclose that it was manganese ore and manganese ore alone
which was sought to be sold by the appellant to various
buyers in India. The mere fact that certain specifications
have been given or certain percentages have been mentioned
does not change the character or the quality of the goods
that are actually supplied by the appellant to its various
purchasers.
Another important feature of the contract of sale is
that a certain amount of tonnage of manganese ore is to be
supplied by the appellant which is stretched over a period
of few months which shows that the appellant was to supply
the ore in instalments. In these circumstances, therefore,
the theory of the ore supplied by the appellant being only
one constituent and not the entire goods sold appears to be
purely illusory and is not at all supported even by the
contracts of sale filed by the appellant. For instance, if a
firm placed an order for 1000 bales of cloth to be supplied
to it by the seller in the course of five months and in
pursuance of this contract if the seller supplies 200 bales
every month it cannot be said that the first instalment of
200 bales is not the goods sold but only a constituent of
the same. On a parity of reasoning, therefore, the manganese
ores loaded by the appellant in the railway wagons in the
State of Madhya Pradesh, are clearly included in the
contract of sale which itself provides that the supply has
to be made within. a specified period of few months.
Learned counsel for the appellant placed great reliance
on a judgment of the Bombay High Court, a certified copy of
which has been filed in this Court in the Central Provinces
Manganese ore Company Ltd. v. The State of Maharashtra(1).
In the first place this judgment is not at all applicable to
the facts of the present case, because the Bombay High Court
was not dealing with a sale under the Central Sales Tax Act.
The High Court was pre-eminently concerned with the
provisions of the C.P. and Berar Sales Tax Act, 1947 and
there is nothing to show that the provisions of that Act
were in pari materia to the provisions of the Central Sales
Tax Act. More than this, we do not want to say about the
judgment of the Bombay High Court.
Reliance was also placed by the appellant on a decision
of this Court in Commissioner of Sales Tax, Eastern
Division, Nagpur v. Husenali Adamji and Company & Another(2)
which also does not appear to be applicable to the facts of
the present case, because the Supreme Court in that case was
dealing with the question as to when the title in the goods
passes.
(1) Sales Tax Reference Nos. 17, 18, 19 and 20 of 1964
decided on April 7, 1969.
(2) 10 S.T.C. 297.
108
Lastly it was contended by counsel for the appellant
that as the manganese ores despatched by the appellant were
unascertained or future goods which would come into
existence only after the manganese ores extracted in various
mines in Madhya Pradesh and Maharashtra were stocked and
piled up one after the other the provisions of s. 3(a) of
the Central Sales Tax Act would not apply. This contention
is completely without substance in view of the decision of
this Court in Balabhgas Hulaschand’s case, (supra) where it
was pointed out that so far as s. 3(a) of the Central Sales
Tax Act is concerned there is no distinction between
unascertained and future goods and goods which are already
in existence, if at the time when the sale takes place these
goods have come into actual physical existence. In the
instant case also it was never disputed before the High
Court or before us that the manganese ore was loaded into
the wagons after being extracted from the mines and that the
sales of these manganese ores despatched from Madhya Pradesh
to various States actually took place and the goods were
ultimately accepted by the buyers in other States. In these
circumstances, therefore, it is quite clear in this case
that the movement of the goods took place in pursuance of
the contracts of sale which ultimately merged into actual
sales and it was only there after that the tax was sought to
be levied by the State of Madhya Pradesh. It was also not
disputed that the tax has been levied only on such sales of
the manganese ore despatched from the State of Madhya
Pradesh which came from the mines situated in the State of
Madhya Pradesh. Thus all the incidents of an inter-State
sale are pre sent in the instant case and the view taken by
the High Court that the sales were covered by s. 3(a) of the
Central Sales Tax Act is absolutely correct and we fully
endorse the same.
These were the main arguments advanced before us by
counsel for the appellant. Apart from these, some small
points were also argued by the learned for the appellant. In
the first place it was submitted that the Sales Tax
Authorities had no jurisdiction to impose a penalty of Rs.
1,000/- for the delay in filing the return under the Central
Sales Tax Act, because there was no provision in the Central
Act making a dealer liable to pay penalty for filing belated
returns and recourse could not be taken to the provisions of
the State Act on the subject. The High Court negatived this
plea following two Division Bench judgments of the Madhya
Pradesh High Court. The view taken by the High Court on this
point is legally erroneous be cause this Court in M/s.
Khemka & Co. (Agencies) Pvt. Ltd. v. State of Maharashtra(1)
has pointed out that in the absence of any provision for
penalty under the Central Sales Tax Act itself it is not
open to the Sales Tax Authorities to press into service the
provisions of the State Sales Tax Act. In this connection,
this Court observed as follows .
“It is only tax as well as penalty payable by a
dealer under the Central Act which can be assessed,
re-assessed, collected and enforced in regard to
payment. The words
(1) [1975] 3 S.C.R. 753.
109
as if the tax or penalty payable by such a dealer
under the A Central Act is a tax or penalty payable
under the general sales tax law of the State” have
“origin and root in the words” payment of tax including
any penalty payable by dealer under the Central Act”.
x x x x x x
For the foregoing reasons we are of opinion that the
provisions in the State Act imposing penalty for non-payment
of income-tax within the prescribed time is not attract ed
to impose penalty on dealers under the Central Act in
respect of tax and penalty payable under the Central Act. x
x x x x The Central Act contains specific provisions for
penalty. Those are the only provisions for penalty available
against the dealers under the Central Act. Each State Sales
Tax Act contains provisions for penalties. These provisions
in some cases are also for failure to submit return or
failure to register. It is rightly said that those
provisions cannot apply to dealers under the Central Act
because the Central Act makes similar provisions.
In this view of the matter, therefore, this part of the
order of the High Court must be set aside and the penalty
imposed by the Assist ant Sales Tax Commissioner must be
quashed.
It was then submitted that a purchase tax on a turnover
of Rs. 748/- has been levied under s. 7(1) of the Madhya
Pradesh General Sales Tax Act. It was, however, pointed out
by the respondent that the tax was actually lev ed on the
purchases made by the appellant from unregistered dealers
and is a very petty amount. In view of this concession,
learned counsel for the appellant did not press this matter.
The finding of the High Court on this point is, therefore,
affirmed. F
Lastly it was submitted that the Assistant Sales Tax
Commissioner was wrong in holding that the turnover in
respect of inter-State sales was not supported by ‘C’ Forms.
This is also a matter which relates to the merits of the
case which could be properly agitated before the Appellate
or Revisional authorities under the State Sales Tax Act.
The result is that the penalty of Rs. 1000/- imposed by
the Assist- ant Sales Tax Commissioner is quashed. All other
contentions raised by the appellant fail and the judgment of
the High Court on those points is hereby affirmed. The
appeal is accordingly dismissed with the modification
indicated above, but- in the circumstances without any order
as to costs.
S.R. Appeal dismissed. H
110