# Sl'ATE OF MYSORE v. YADDALAM LAKSHMINARASIMHAIAH SETIY AND SONS

- **Citation:** [1965] 2 S.C.R. 129
- **Court:** Supreme Court of India
- **Decided:** 1964-11-10
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sl-ate-of-mysore-v-yaddalam-lakshminarasimhaiah-setiy-and-sons-3299
- **Pages:** 10

## Headnote

A
B
c
D
E
G
H
129
Sl'ATE OF MYSORE
v.
YADDALAM LAKSHMINARASIMHAIAH SETIY AND SONS
November 10, 1964
[K. SUBBA RAO, J. C. SHAH ANDS. M. Srroo, JI.]
Celflral Saks Tax Act (74 of 1956), ••· 6, 8(2) and 9 and Mysore
Sales I'ax Act (25 of 1957), s. 5(3)(a)-lnter-State sale of power/oom
textllu-A.ssessee rwt the first or earliest deakr in Stato--Liability to
tax.
'The MSessec wa. a dealer in Mysore dealing in powerloom textiles.
HiJ turnover in the course of inter-state trade was assessed and taxed by
the Commercial Tax Officer, under s. 9 of the Central Sales Tax Act,
1954, before its amendment in 1958.
The order was upheld by the
Deputy Commissioner of Commercial Taxes and the Sales Tax Appellate
Tribunal.
The High Court, in revision, held that the sales were not
"first sales" within the State, and that not being exigible to tax under
the State Sales Tax Act (Mysore Act 25 of 1957), no tax was payable
under the Central Act.
The State appealed to the Supreme Court and
contended that the asscssee was liable to be taxed because of s. 6 of tho
Central Act.
HELD : (Per Subba Rao and Sikri, JJ.) Though s. 6 of the Central
Act is the charging section the liability to pay tax is subject to the other
provisions in the Act. Section 8(2) provides that tax shall be calculated
at the same rates and in the same manner as would have been done if
the sale bad in fact, taken place inside the appropriate State, and s. 9
proyides that, under the Central Act, tax shall be levied in the same
manner as the tax on the sale or purchase of goods, under the general
sales tax law of the State is assessed, paid and collected.
The word
"levied" means "impooed" and since s. 5(3) (a) of the Mysore Sales Tax
Act, read with Schedule II of that Act provides that the tax shall be
levied, in the case of powerloom goods on the first or tho earliest of
auccessive dealers in the State, and tho assessee was not such a dealer,
oo tax could be levied on him in respect of the disputed turnover. Such
a construction avoids the anomaly of tho State collecting tax on powerloom
textiles only at a single point and the Centre, through the agency of the
State authorities, collecting the said tax for and on behalf of the State
at multi-points. [131 A; 132 G; !33 B, D-F, H]
Per Shah, J. (dissenting) : Tho High Court was in error in regardins
saleo other than the first sales as exempted from liability to pay tax under
the Central Act, when the sales sought to be taxed, were in the course of
inter-91ate trade or commerce.
[138 C-D]
Section 6 of the Central Act charges inter .. tato transactions to tax.
The function of a. 8 ( 2) is to prescribe the rate and the manner of calculation ot tax : it i.o not intended to incorporate the entire procedural and
wbotantive State law relating to tax. Section 9(1) and (2) establish that
the machinery of assessment, collection and enforcement of liabilitv prescribed by the State statute alone is incorporated in the Central Act.
Neither 1. 8(2) nor 1. 9 cut down the plenary charge impOl!cd by 1. 6, nor
130
SUPREME COURT REPORTS
[1965] 2 s.c.
do they attract any exemptions from tax prescribed by the State law. [136
A
B-E]
CML APPELLATE JURISDICTION: Civil Appeal No. 165 of
1964.
Appeal by special leave from the judgment and order dated
B
January 22, 1962, of the Mysore High Court in Civil' Revision
Petition No. 964 of 1961.
S. V. Gupte, Solicitor-General, M. S. K. Sastri and
B. R. G. K. Achar, for the appellant.
R. Gopa/akrishnan, for the respondent.
The Judgment of Sobba Rao and Sikri 11. was delivered by
Sikri J. Shah J. delivered a dissenting Opinion.
c
Sikri, 1.
This is an appeal by special leave directed against
D
the judgment of the Mysore High Court accepting the revision
petition of the respondent before us, hereinaftet referred to as the
assessee.
The relevant facts are these. The assessee is a dealer in powerE
loom and handloom textiles, both within the Mysore State and in
the course of inter-State trade. For the year 1957-58, the Commerical

## Text

A
B
c
D
E
G
H
129
Sl'ATE OF MYSORE
v.
YADDALAM LAKSHMINARASIMHAIAH SETIY AND SONS
November 10, 1964
[K. SUBBA RAO, J. C. SHAH ANDS. M. Srroo, JI.]
Celflral Saks Tax Act (74 of 1956), ••· 6, 8(2) and 9 and Mysore
Sales I'ax Act (25 of 1957), s. 5(3)(a)-lnter-State sale of power/oom
textllu-A.ssessee rwt the first or earliest deakr in Stato--Liability to
tax.
'The MSessec wa. a dealer in Mysore dealing in powerloom textiles.
HiJ turnover in the course of inter-state trade was assessed and taxed by
the Commercial Tax Officer, under s. 9 of the Central Sales Tax Act,
1954, before its amendment in 1958.
The order was upheld by the
Deputy Commissioner of Commercial Taxes and the Sales Tax Appellate
Tribunal.
The High Court, in revision, held that the sales were not
"first sales" within the State, and that not being exigible to tax under
the State Sales Tax Act (Mysore Act 25 of 1957), no tax was payable
under the Central Act.
The State appealed to the Supreme Court and
contended that the asscssee was liable to be taxed because of s. 6 of tho
Central Act.
HELD : (Per Subba Rao and Sikri, JJ.) Though s. 6 of the Central
Act is the charging section the liability to pay tax is subject to the other
provisions in the Act. Section 8(2) provides that tax shall be calculated
at the same rates and in the same manner as would have been done if
the sale bad in fact, taken place inside the appropriate State, and s. 9
proyides that, under the Central Act, tax shall be levied in the same
manner as the tax on the sale or purchase of goods, under the general
sales tax law of the State is assessed, paid and collected.
The word
"levied" means "impooed" and since s. 5(3) (a) of the Mysore Sales Tax
Act, read with Schedule II of that Act provides that the tax shall be
levied, in the case of powerloom goods on the first or tho earliest of
auccessive dealers in the State, and tho assessee was not such a dealer,
oo tax could be levied on him in respect of the disputed turnover. Such
a construction avoids the anomaly of tho State collecting tax on powerloom
textiles only at a single point and the Centre, through the agency of the
State authorities, collecting the said tax for and on behalf of the State
at multi-points. [131 A; 132 G; !33 B, D-F, H]
Per Shah, J. (dissenting) : Tho High Court was in error in regardins
saleo other than the first sales as exempted from liability to pay tax under
the Central Act, when the sales sought to be taxed, were in the course of
inter-91ate trade or commerce.
[138 C-D]
Section 6 of the Central Act charges inter .. tato transactions to tax.
The function of a. 8 ( 2) is to prescribe the rate and the manner of calculation ot tax : it i.o not intended to incorporate the entire procedural and
wbotantive State law relating to tax. Section 9(1) and (2) establish that
the machinery of assessment, collection and enforcement of liabilitv prescribed by the State statute alone is incorporated in the Central Act.
Neither 1. 8(2) nor 1. 9 cut down the plenary charge impOl!cd by 1. 6, nor
130
SUPREME COURT REPORTS
[1965] 2 s.c.
do they attract any exemptions from tax prescribed by the State law. [136
A
B-E]
CML APPELLATE JURISDICTION: Civil Appeal No. 165 of
1964.
Appeal by special leave from the judgment and order dated
B
January 22, 1962, of the Mysore High Court in Civil' Revision
Petition No. 964 of 1961.
S. V. Gupte, Solicitor-General, M. S. K. Sastri and
B. R. G. K. Achar, for the appellant.
R. Gopa/akrishnan, for the respondent.
The Judgment of Sobba Rao and Sikri 11. was delivered by
Sikri J. Shah J. delivered a dissenting Opinion.
c
Sikri, 1.
This is an appeal by special leave directed against
D
the judgment of the Mysore High Court accepting the revision
petition of the respondent before us, hereinaftet referred to as the
assessee.
The relevant facts are these. The assessee is a dealer in powerE
loom and handloom textiles, both within the Mysore State and in
the course of inter-State trade. For the year 1957-58, the Commerical Tax Officer, Bangalore, assessed and taxed the turnover
relating to powerloom textiles under s. 9 of the Central Sales Tax
Act (LXXIV of 1956), hereinafter referred to as the.Central
Act, as it stood before its ;imendment by the Central Sales Tax F
(Second Amendment) Act, 1958 (XXX of• 1958).
This was
upheld by the Deputy Commissioner of Commercial Taxes. The
Mysore Sales Tax Appellate Tribunal also affirmed the order. The
High Court, in revision, accepted the plea of the assessee that its
turnover consisting of sales of textiles manufactured by means of
G
powerlooms in the course of inter-State trade is liable to be taxed
at the same rate and exactly in the same manner as they would
have been taxed if they had been intra-State transactions.
The
High Court arrived at this conclusion because, according to it,
the true construction of s. 8 ( 2) of the Central Act is that any
exemption given by a State Sales Tax Act or the point determined
ff
by it at which a sale is to be taxed applies to assessments under
the Central Act.
STATE V. Y. L. SETTY & SONS (Sikri, /.)
131
A
The assessee's plea, in brief, is that he is not the first or earnest
of the successive dealers of the disputed turnover, and, therefore,
if he had sold the goods intra-State, no tax would have been levied
on him. The reply of the Department is that this is true but, under
the Central Act he is liable to be taxed because of s. 6, and the
point at which a turnover is taxed has nothing to do with the manB
ner of calculation of tax.
c
D
E
F
G
H
The relevant sections of the Central Act are as follows ·:
"6. Liability to tax on inter-State sales :-Subject to the
other provisions contained in this Act, every dealer shall,
with effect from such date as the Central Government
may,· by notification in the Official Gaiette, appoint, not
being earlier than thirty days from the date of such
notification, be liable to pay tax under this Act on all
sales effected by him in the course of inter-State trade or
commerce during any year on and from the date so
notified.
8. Rate of tax on sales in the course of inter-State
trade or commerce :-
( 1) Every dealer who, in the course of inter-State
trade or commerce sells to a registered dealer goods of
the description referred to in sub-section ( 3) shall be liable to pay tax under this Act, which shall be ~ne per
cent of his turnover :
Provided that, if under the sales tax law of the appropriate State, the sale or purchase of any goods by a dealer
is exempt from tax generally and not in specified cases
or in specified circumstances or is subject to tax (by
whatever name called) at a rate or rates which is or are
lower than the rate specified in sub-section ( 1 ) , the tax
payable under this Act on the turnover in relation to sale
of such goods in the course of inter-State trade or commerce shall be nil or shall be calculated at the lower rate,
as the case may be.
(2) The tax payable by any dealer in any case not
falling within sub-section ( 1 ) in respect of the sale by
him of any goods in the course of inter-State trade or
commerce sha)l be calculated at the same rates and in
the same manner as would have been done if the sale had,
in fact, taken place inside the appropriate State; and for
132
SUPRBMB COUl.T llPOR.TS
(1965) 2 S.C.R.
the purposes of roiling any such calculation any such
dealer shall be deemed to be a dealer liable to pay tax
under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under
that law.
9. Levy and collection of tax.-( 1) The tax payable
by any dealer under this Act shall be levied and collected in the appropriate State by the Government of India
in the manner provided in sub-section (2).
(2) The authorities for the time being empowered to
assess, collect and enforce payment of any tax under the
general sales tax law of the appropriate State shall, on
behalf of the Government of India and subject to any
rules made under this Act, assess, collect and enforce
payment of any tax payable by a dealer under· this Act
in the same manner as the tax on the sale or purchase of
goods under the general sales tax law of the State is
assessed, paid and collected; and for this purpose they
may exercise all or any of the powers they have under the
general sales tax law of the State; and the provisions of
such law,
including provisions relating to returns,
appeals, reviews, revisions, references, penalties and
compounding of offences, shall apply accordingly.
(3) The proceeds (reduced by the cost of collection) in any financial year of any tax levied and collected
under tl1is Act in any State on behalf of the Government
of India· s!iall, except insofar as those proceeds represent proceeds attributable to Union territories, be assigned to that State and shall be retained by it; and the proceeds attributable to Union territories shall form part
of the Consolidated Fund of India."
Section 6. of the Central Act is the charging section.
SubA
B
c
D
E
F
ject to the other provisions contained in the Act, every dealer is
liable to pay tax under the Act on all sales effected by him. It G
will be notked that the liability is not absolute but subject to
the other provisions of the Act. If the effect of another provision
is to take away the liability, effect will have to be given to it.
Section 8 orescribes the rates of tax to be levied. It is common
ground th~t s. 8 ( 1) does not apply to the facts of the case, bot
the provi0-0 is imoortant as it indicates that in some cases falling
H
within the proviso the rate may be nil.
In other words, notwithstanding s. 6, the dealer may not be liable to pay any tax if
STATE v. Y. L. SBTTY & SONS (Sikri, /.)
133
A.
he comes within the pwriso co s. 8 ( 1). It follows that the scheme
of the Act is not tha& every transaction in inter-State trade must
bear some tax.
Section 8(2) provides for the method of calculating the tax;
under that sub-section, the tax shall be calculated at the same
B
rates and in the same manner as would have been done if the sale
had, in fact, taken place inside the appropriate State.
The expression "in the manner" may give rise to two conflicting views,
namely, (i) it is concerned only with the calculation of the UIX,
and (ii) it deals not only with the calculation of the rates but
also the manner of levy of the tax.
But s. 9 ( 1) dispels the
C
ambiguity for 'it says that the tax payable by any dealer under the
Central Act shall be levied and collected in the appropnate State
by the Government of India in the manner provided in sub-sect1on
(2); and sub-s. (2) of s. 9 empowers the appropriate State authorities to assess, collect and enforce payment of any tax payable by
D any dealer under the Central Act in the same manner as the tax
on the sale or purchase of goods under the general sales tax law of
the State is assessed, paid and collected. The expression "levy"
means "impose".
Under s. 5 (3 )(a) of the Mysore Sales Tax
Act, 1957, hereinafter called the State Act, tax shall be levied
in the case of the sale of any of the goods mentioned in col. (~)
1:
of the Second Schedule by the first or the earliest of successiw
dealers in the State, who is liable to tax under that section, a tax
at the rate specified in the corresponding entry of Col. (3) of the
said Schedule on the turnover of sales of such dealer in ear.h year
relating to such goods. When s. 9 (1) says that under the Central
Act tax shall be levied in the same manner as the tax on the ,ale
F or purcjwe of goods under the general sales tax law of the State
i, assessed, paid and collected, it is reasonable to bold that the
expression "levied" in s. 9 ( 1 ) of the Central Act refers to the
expression "levied" in s. 5(3)(a) of the State Act. There is no
rea,on why the Central Act made a departure in the manner of
levy of tax on the specified goods which are taxed only at a single
G point llnder the State Act : if any such radical departure was intended, the Central Act woul'il have expressly stated so.
The
Central Act was passed to levy and collect sales-tax on interstate sales to avoid confuSi.on and conflict of jurisdictitins; the
tax if also collected only for the benefit of the States. Therefore,
H
the construction we ~ept avoids the anomaly of the State collecting tax on powerloom t~es only at a sin~e point and the
Centre, through the agency of the State authorities, collecting the
said tax for and on behalf of lhe State at muki-points.
SUPllBME COUil T llBPOll TS
[1965) 2 S.C.IL
There has been considerable difference of opinion Rmong the
A
High Courts about the true construction of s. 8 ( 2), but none of
them have relied on s. 9 of the Central Act, Therefore, it is not
necessary to refer J.O cases cited before us.
For the foregoing reasons we hold, though for different reasons, that the order of the High Court is correct. Jn the result,
B
the appeal is dismissed with costs.
Shah, J.
The High Court of Mysore has held that sales which
were not "first sales" within the Mysore State being not exigible to
tax under .the Mysore Sales Tax Act, no tax was payable thereon
under the Central Sales Tax Act, 1956.
C
The provisions of the Central Sales Tax Act in force at the
relevant time may be briefly referred to. Section 6 imposes upon
every dealer, subject to the other provisions contained in the Act,
liability to pay tax under the Act on all sales effected by him in
the course of inter-State trade or commerce during any year. SecD
tion 7 provides for registration of dealers.
Section 8 deals with
the rates of tax on sales in the course of inter-State trade or commerce.
By sub-s. (2), as it stood at the relevant time, it was
provided:
"The tax payable by any dealer in any case not falling within sub-section ( 1) in respect of the sale by him
of any goqils in the course of inter-State trade or commerce sha1I be calculated at the same rates and in the
same manner as would have been done if the sale had, in
fact, taken place inside the appropriate State and for the
purpose of making any such calculation any such dealer
shall be deemed to be dealer liable to pay tax under the
sales tax law of the appropriate State, notwithstanding
that he, in fact, may not be so liable under that law."
: Section 9 provided for levy and collection of tax. It provided :
"(1) The tax payable by any dealer under this Act
shall be levied and collected in the appropriate State by
the Government of India in the manner provided in subsection (2).
(2) Tiie authorities for the time ~ing empowered to
assess, collect and enforce payment of any tax under
the general sales tax law of the appropriate State shall,
on behalf of the Government of India and subject to an)'
r
G
H
A
B
c
D
STATE V. Y. L. SETTY & SONS (Sikri, /.)
135
rules made under this Act, assess, collect and enforce
payment of any tax payable by a dealer under this Act in
the same manner as the tax on the sale or purchase of
goods under the general sales tax law of the State is
assessed, paid and collected; and for the purpose they
may exercise all or any of the powers they have under the
general sales tax law of the State; and the provisions
of such law, including provisions relating to returns, appeals, reviews, revisions, references, penalties and compounding of offences, shall apply accordingly.
(3)
"
The turnover of the respondents sought to be taxed arises out
of transactions of sale of handloom and powerloom cloth effected
by them in the course of inter-State trade or commerce. Under
the Mysore Sales Tax Act, 1957, sale of these goods was liable
to tax under s. 5(3)(a) read with Entry 7 in Sch. II of the Act,
at a single point on sale by the first or the earliest of successive
dealers in the State.
It is common ground that the respondents
are not the first or the earliest of successive dealers in the State
in respect of the transactions sought to be taxed. Section 6 charges to tax sales in the course of inter-State trade or commerce of
every dealer, but the Act does not prescribe the rates at which tax
E
is to be levied, nor does it set up machinery for assessment, collection and enforcement of liability to pay tax, charged upon
inter-State sales of dealers. Bys. 8(2) tax payable by the dealer
in respect of his sales not falling within sub-s. ( 1 )-and the turnover in the present case is not in respect of sales falling within
sub-s. (1 )-has to be calculated at the same rates and in the same
F . manner as would have been calculated, if the sale had taken place
inside the appropriate State. The clause in terms only deals with
calculation of the tax-the rate at which and the manner in which
the tax has to be calculated-under the State law : it does not
attract any exemptions from tax prescribed by the State law.
Use of the expression "in the same manner" in s. 8 (2) has not
G the effect of assimilating the procedural and the substantive provisions relating to the imposition, levy and collection of tax as are
provided by the State law in the matter of collection of tax under
the Central Sales Tax Act. The Legislature has not said so in
expl'Cis terms, and there is no implication to that effect in the
H
scheme of the Act.
Section 9 (1 ) invests the appropriate State
Government with authority to levy and collect tax, in the manner
provided by sub-s. (2). By sub-s. (2) of s. 9 the Legislature has
expressly provided that the tax has to be assessed, collected and
136
SUPIU!:U:B COUllT llEPOl'lTS
(19115] 2 S.C.R.
payment has to be enforced under the general sales tax law of A
the appropriate State on behalf of the Government of India. The
scheme devised by the Legislature is fairly clear. Section 6 char-
, ges inter-State transactions to tax. The function of s. 8 (2) is to
prescribe the rate and the manner of calculation of tax : it is not
intended to incorporate the entire procedural and substantive State
law relating to tax. By sub-s. (2) of s. 9 the machinery for asses!-
B
ment, collection and enforcement of liability to pay tax is set up.
Neither s. 8 (2) nor s. 9(2) cuts down the plenary charge imposed
by s. 6. It is true that s. 9 (1) directs that the tax payable by a
dealer shall be levied and collected, in the manner provided in that
sub-section. The sub-section, however, does not charge turnover
to tax : the turnover stands already charged by s. 6. Again the C
inter-relation of the two sub-sections of s. 9 clearly establishes that
the machinery of assessment, collection and enforcement of liability prescribed by the State statute alone is incorporated in the
Central Sales Tax Act. I am, therefore, unable to hold that under
sub-sections ( 1) and ( 2) of s. 9, the power conferred upon the D
authority competent to assess the tax in the same manner as the
tax on the sale or purchase of goods under the general sales tax
law includes the power to admit to exemptions provided by the
State law, inter-State sale&-taxable under the Central Sales Tax
Act.
This view has been taken in several cases which have come E
before the Madras. Kerala and ,Andhra Pradesh High Courts, in
S. Mariappa Nadar and others v. The State of Madras(') it was .
held by the Madras High Court that tax leviable under s., 8(2)
was on the turnover under the Central Sales Tax Act, and not
under the Madras General Sales Tax Act. There was, in the view
of the Court, nothing in s. 8 (2) which provided that the interF
State nature of the transaction was taken away and the transaction
became intra-State. The Act did not .declare that the transaction
shall be deemed to be one inside the ·state. The local sales tax
law applied to it only to the extent to which it was specifically
directed.
Therefore by the terms of s. 8 the assessee was not G
entitled to exclude from the turnover the inter-State sales.
The
Court also held that the phrase "in the same manner" in s. 9(3)
[which was substituted for the original sub-s. (2) of s. 9, by the
Central Sales Tax (Second Amendment)· Act, 1958] did not make
applicable all the incidents of the local sales tax law to the assessment under the Central Sales Tax Act.
The phrase merely conH
templated that the procedure of making an assessment, collection
(ll [1962) 13 S.T.C. 371.
STATE v. Y. L. SETTY & SONS. (Shah, /.)
137
A of tax, and the provisions relating to the determination of turnover
shall be the same as laid down in the local Sales Tax Act.
In M. Abbas and Company v. The State of Madras(1) it
was held by the Madras High Court that for the purpose of attacl!.-
ing liability to sales tax under s. 8 ( 2) the fact that in respect of
B that transaction the dealer may not be liable under the local salea
tax law (goods sold being subject only to a single point levy under
the local sales tax law) is of no consequence.
The principle of Mariappa's case(2 )
was applied by the
Kerala High Court in Parvathi Mills (Private) Ltd v. The Stat•
C of Kerala('), in which excise duty paid to the Central Government by a' dealer and collected from his customers was not permitted to be excluded from the turnover by the application of
rule 7 (1) of the General Sales Tax Rules, 1950, framed under the
local Sales Tax Act. It was observed in that case that the expression "in the same manner'' ins. 9(2) of the Central Sales Tax Act
D did not attract the application of the rule which justified the exemption.
The Andhra Pradesh High Court in Sri Surya Trading Firm
and others v. The State of Andhra Pradesh(') held that an assessce dealing in handloom cloth and whose inter -State sales fell under
s. 8(2) of the Central Sales Tax Act, 1956, was not entitled to the
r. benefit of the exemption granted to handloom cloth under the notification issued by the State Government on December 13, 1951,.
in exercise of th~ powers conferred under s. 9 (1 ) of the Andhra
Pradesh General Sales Tax Act, 1957. The fiction created by
s. 8(2) of the Central Sales Tax Act, 1956, was only for the limited
purpose of calculating the rate, and the position of a dealer under
F s. 8 ( 2) could not be equated with that of a dealer governed by the
Andhra Pradesh General Sales Tax Act, 1957, for every purpose.
In The State of Mysore and another v. Mysore Paper Milu
Ltd(') the Mysore High Court also approved of the principle of
Mariappa's case(') and Parvathi Mills' case( 8)
and held that
G by the use of the expression ''in the same manner" ins. 9(3) [which
was substituted for the original s. 9(2) by the Central Sales Tax
(Second Amendment) Act, 1958] all the incidents of the local
sales tax law to the assessment under the Central Sales Tax Act
are not applied: what is contemplated by that phrase is that the
procedure of making an assessment and collection of tax is the
H same as in the local Sales Tax Act
(1) (1962) 13 S.T.C. 433.
(3) (t962) 13 S.T.C. 9J7.
(2) (1962) 13 S.T.C. 371.
t4) (5964) 15 S.T.C. 176.
(5) (1964) 15 S.T.C. 176.
L3Sup./6'-10
138
SUPREME COURT REPORTS
(1965) 2 S.C.I..
In my view these cases correctly interpret the words of s. 8 (2)
and s. 9(2) of the Central Sales Tax Act as they stood befOn: its
<1I11endment in !he year 19 5 8.
These cases, it is true, did not
expressly deal with the_ interpretation of s. 9 (I ) of the Central
Sales Tax Act, but in my judgment, for reasons already stated,
the machinery incorporated by sub-ss. (1) & (2) of s. 9 of the
Central Sales Tax Act from the State statute only relates to asse&-.,
ment, collection and enforcement of liability to' tax.
In my view the High Court was in error in regarding sales other
than the first sales exempt from liability to pay tax under the
Central Sales Tax Act when the sales sought to be taxed were in
the course of inter-State trade or commerce.
ORDER
In accordance with the Opinion of the majority this Appeal is
dismissed with costs.
A
•
c
D