Gujarat High Court
State Of Gujarat vs Zalawar Petroleum Co. on 11 November, 1992
Author: M.B. Shah
Bench: M.B. Shah
JUDGMENT B.S. Kapadia, J.
1. The following question is referred to this Court at the instance of the State (Revenue) by the Gujarat Sales Tribunal, Ahmedabad, under section 69 of the Gujarat Sales Tax Act, 1969 ("the Act", for short) :
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the motor vehicle sold by the opponent on December 31, 1974, was in the same form in which it was originally purchased in the year 1968 from the registered dealer and, therefore, its sale constituted 'resale' under section 7(ii) of the Gujarat Sales Tax Act, 1969 ?".
2. The brief facts relevant for the purpose of deciding the question involved in the matter can be stated as under.
3. The opponent, M/s. Zalawar Petroleum Company, is a dealer carrying on business of reselling petrol, diesel oil, kerosene, petroleum products, etc., at Surendranagar. In the year 1968 the opponent purchased a motor vehicle chassis from a registered dealer. After purchasing the same it mounted a tank and used the vehicle as tanker for carrying goods sold by it. Subsequently, on December 31, 1974, the opponent sold the said vehicle for an amount of Rs. 40,000. The Sales Tax Officer, Surendranagar, who assessed the opponent included the sale price of the vehicle in the taxable turnover of sales of samvat year 2031 and levied tax thereon and also imposed penalty. Against the said levy of tax and penalty the opponent preferred first appeal before the Assistant Commissioner of Sales Tax but the opponent was not successful in the said first appeal except by way of getting partial relief in the amount of penalty. The opponent therefore preferred second appeal No. 178 of 1979 before the Tribunal. In the said second appeal, by the judgment and order dated July 13, 1981, the Tribunal had come to the conclusion that the Assistant Commissioner of Sales Tax had not dealt with an alternative plea raised by the opponent that it was entitled to deduction from the turnover liable to tax, of the amount of sale price of the vehicle since the sale in question constituted resale of goods purchased from registered dealer. The Tribunal therefore, directed that the Assistant Commissioner should given a fresh hearing to the opponent on that alternative contention and give his decision and thereafter sent the matter to the Tribunal.
4. Accordingly, the Assistant Commissioner of Sales Tax after giving fresh hearing to the opponent gave finding dated April 1, 1982, that the opponent's sale of the vehicle did not constitute a resale of goods purchased from registered dealer for the reason that it was proved that the vehicle sold by the opponent was not at the time of sale by it in the same form in which it was originally bought by the opponent in the year 1968. Thereafter the matter was heard afresh by the Tribunal and it came to the conclusion that the opponent had in fact sold the chassis of the motor vehicle bearing No. GTX 5785 to Shri Gafarbhai Yunusbhai and had made resale and therefore, sale price of Rs. 40,000 in respect of the disputed motor vehicle does not attract any tax. It was further held by the Tribunal that penalty of Rs. 1,200 imposed under section 45(6) of the Act by the Sales Tax Officer ceased to be leviable and that as penalty of Rs. 100 imposed under section 45(8) of the Act has been removed by the Assistant Commissioner of Sales Tax, no further order was required to be passed thereon.
5. Accordingly, in the result the Tribunal allowed the second appeal and set aside the order dated April 27, 1979, passed in the first appeal by the learned Assistant Commissioner of Sales Tax, Bhavnagar, and his subsequent order dated April 1, 1982, passed after remand of the matter by the Tribunal. The levy of tax on the sale amounting to Rs. 40,000 of motor vehicle chassis No. GTX 5785 is removed and penalty of Rs. 1,200 imposed under section 45(6) of the Act is also removed. The Tribunal also directed that amounts of tax and penalty, if recovered from the appellant shall be refunded.
6. In view of the aforesaid decision of the Tribunal the State of Gujarat has made an application under section 69 of the Act for making a reference and after making some change in the formation of the question reference has been made by the Tribunal under section 69 of the Act referring the aforesaid question.
7. It may be stated that the Tribunal has rightly considered the reasoning given by the Assistant Commissioner of Sales Tax and in our view rightly held that the Assistant Commissioner of Sales Tax has acted erroneously in disregarding the evidence produced in support of the opponent's contention that what was sold by it was only the chassis after having taken down the oil tank from the vehicle on which it was originally mounted. The Tribunal has rightly approached the question from practical point of view. It may be that under the provisions of the Income-tax Act or any other law when an assessee is entitled to get certain depreciation he would put the valuation of the goods, property, machinery or vehicle accordingly in his books of accounts. With the passage of time the depreciated value of such goods, property or machinery or vehicle may be very meagre, but that does not mean that factually the said vehicle does not exist. On the question whether the vehicle exists or not, the opponent-assessee has relied on the affidavit filed by Shri Gafarbhai Yunusbhai and that has been also supported by the correspondence exchanged between the opponent-assessee and the Senior Inspector of Factories, Rajkot. These two pieces of evidence have been totally disregarded by the Assistant Commissioner of Sales Tax on the ground that depreciated book value of the vehicle in question was absolutely meagre. Factually when the vehicle exists and when it is sold as per the affidavit of said Shri Gafarbhai Yunusbhai by the opponent-assessee, it cannot be said that the said vehicle namely, the chassis was not sold to said Gafarbhai.
8. In that view of the matter Mr. K. M. Mehta, learned Assistant Government Pleader appearing for the State also did not press this point seriously.
9. However, Mr. Mehta, learned Assistant Government Pleader has pointed out that the said chassis was purchased in the year 1968 and it was sold in the year 1974 and therefore, it cannot be in the same condition in which it was originally purchased. It is true that it cannot be in the same condition as per the definition of the word "resale" given under section 2(26) of the Act wherein it is provided that "resale" means a sale of purchased goods in the same form in which they wee purchased. When the chassis purchased by the opponent-assessee is sold to said Shri Gafarbhai Yunusbhai it is in the working order. Merely because some time has elapsed between the date of purchases and the date of resale it cannot be said that the said chassis is not in the same form. No time-limit is prescribed under the Act that goods should be resold within a particular time. In that view of the matter we do not find any merit in the contention raised by Mr. K. M. Mehta, learned Assistant Government Pleader and we fully agree with the findings given by the Tribunal that the chassis was sold by the opponent-assessee to said Shri Gafarbhai Yunusbhai in the same form in which it was purchased and therefore it amounts to resale of the vehicle for the purpose of section 7(ii) of the Act.
10. In result we answer the question in the affirmative in favour of the assessee and against the Revenue. Accordingly, the reference stands disposed of with no order as to costs.
11. Reference answered in the affirmative.