Additional Commissioner of Sales Tax vs Dancal Indian Pvt. Ltd.

This sales tax application invokes section 61(1) of the Bombay Sales Tax Act, 1959 and seeks the relief that the Tribunal be directed to forward to this court a question of law and particularly the one formulated at para 5 of the memo of appeal for opinion and answer by this court. It is submitted that the order dated December 23, 2011 passed by the Tribunal refusing to make the reference is erroneous. The order passed by the Tribunal dated December 23, 2011 squarely raised the above two questions and therefore the Tribunal erred in law in passing the order on September 14, 2012 in Reference Application No. 40 of 2012. In other words, the Tribunal was in complete error in refusing to make a reference to this court and for seeking this court''s opinion and answer on the questions of law formulated above.

Ms. Helekar, learned Additional Government Pleader, appearing in support of the application submitted before us that the Tribunal held that section 41 of the Bombay Sales Tax Act, 1959 and particularly sub-section (2) thereof is applicable. It should have considered as to whether the product is plant and machinery and conforms to the description given in the notification entry A-88. She submits that the product sold by the respondent is pneumatically operated filling head for LPG, tee connector with suspension arrangement, control panel for filling of LPG and pneumatically operated cut-off valve for LPG. Ms. Helekar submits that this is not plant and machinery and hence does not answer the description given in the notification entry A-88. The Tribunal, therefore, seriously erred in refusing to consider the matter from this angle, namely, whether the product is plant and machinery and falling within the entry so as to be entitled to any exemption. For all these reasons and particularly when the Tribunal does not indicate as to how in the facts and circumstances of the present case, the judgment of this court in the case of The Commissioner of Sales Tax Vs. M.R.F. Limited, would apply, that this application deserves to be granted.

After having perused section 41 of the Act together with its sub-section and the judgment of the Division Bench of this court in the case of The Commissioner of Sales Tax Vs. M.R.F. Limited, , we are of the opinion that there is no merit in this application. The Tribunal on facts found that the respondent before us is a dealer and manufacturer of machinery items. He sold goods worth Rs. 57,419 against form A. The sales were disallowed by the assessing authority on the ground that machinery parts do not find place in notified entry A-88 and the notification entry A-88 is for plant and machinery. As the goods sold are not plant and machinery, the claim against Form-A was disallowed and the sale was taxed at 13 per cent.

Against this order, the respondent preferred an appeal before the Joint Commissioner of Sales Tax which appeal was partly allowed. The respondent was not satisfied with this order and preferred a second appeal being Second Appeal No. 780 of 2008 and 781 of 2008 and the Tribunal accepted the argument of the respondent-assessee. That argument was that the respondent had sold the above items against form A. It was submitted that it was not open for the authorities at this stage to probe and investigate the matter because the requisite form was filled and considering the express language of section 41(2) the burden of tax is on the purchaser. The respondent could not have questioned the contents of form A and if at all the Department/Revenue was of the opinion that the goods in question do not qualify for exemption, then, it could have proceeded against the purchaser. The question of the seller being under an obligation to pay the tax does not arise. The Tribunal in its detailed order has agreed with the respondent-assessee and in doing so it has placed reliance upon the judgment in the case of The Commissioner of Sales Tax Vs. M.R.F. Limited, . The Division Bench has held that the section as amended (section 41) makes it clear that if the dealer was not entitled to issue the declaration, then, he would be liable to pay the tax. The express language of section 41(2) puts the burden on the purchaser and hence the seller could not be cast with the duty to pay the tax or satisfy the authorities that the goods qualify and are eligible for the exemption. In the light of the clear pronouncement of this court in the above judgment and nothing contrary being brought to our notice or the Tribunal that we are of the opinion that the order passed in the reference application does not suffer from any error of law apparent on the face of the record or perversity warranting our interference therewith. The sales tax application is devoid of any merits and is, therefore, dismissed but with the clarification that the authorities can proceed in terms of section 41 if it is of the opinion or view that the declaration and the contents of the form do not satisfy the requirement of the notification in question and goods are, therefore, not entitled for any exemption. Keeping open all such avenues and the powers in that behalf, we, dismiss this application. No costs.