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PETITIONER:

ASHOK LEYLAND LIMITED

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT: 20/02/1997

BENCH:

B.P. JEEVAN REDDY, S.B. MAJMUDAR

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

B.P. JEEVAN REDDY, J.

Leave granted.

Ashok Leyland Limited, the appellant herein, * is

* Though several other dealers are the

petitioners/appellants herein, We shall refer to Ashok

Leyland as a representative dealer. The discussion and

directions made in this judgment shall, however, govern all

the petitioners/appellants herein. one of the major

manufacturers of trucks and other motor vehicles in India.

Its registered office is at Madras [Chennai]. The plants

manufacturing trucks and motor vehicles are situated in

the state of Tamil Nadu as well as in other States. The

trucks and vehicles manufactured by it are sold all over the

country. For its business purposes, it maintains Regional

Sales officers [R.S.Os.] in different parts of the country

like, Bangalore, Trivandrum, Vijayawada, Pune, Nagpur,

Indore, Calcutta, Bhuvaneshwar, Gauhati, Pondicherry, and

so no. The appellant says that each of these R.S.Os.

maintains an office, a stock yard and other necessary

paraphernalia for receiving, stocking, repairing and

delivering motor vehicles to their customers. The appellant

says that almost seventy percent of its sales are to parties

other than state Transport Undertakings [S.T.Us.]. The sales

to S.T.Us. are in the region of thirty percent of its

production. The R.S.Os., the appellant says, contact the

local purchasers and the S.T.Us., book the orders and also

deliver the vehicles to the pursuant to sales effected by

them. The appellant always keeps the R.S.Os. well stocked

having regard to their requirements. By way of

illustrations, it is stated, the R.S.O. at Hyderabad

receives vehicles from Tamil Nadu from time to time. In

respect of vehicles sold in Andhra Pradesh - whether to

Andhra Pradesh State Road Transport Corporation or to other

parties - sales tax is levied and collected by the State of

Andhra Pradesh inasmuch as they are intra - State sales for

the purpose of the Andhra Pradesh General Sales Tax Act.

Over the years, the appellant says, it has been sending the

trucks, chassis and other vehicles to R.S.Os. all over the

country under `F' Forms produced by it questioned by any

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one. However, the State of Tamil Nadu has been seeding, in

the recent times, to reopen the concluded assessments

contending that the transfer of vehicles from Tamil Nadu to

other States was not mere consignments [without effecting

sales] but constitute inter-state sales within the meaning

of clause (a) of Section 3 of the Central Sales Tax Act,

which are taxable in the State of Tamil Nadu by virtue of

the provisions of the Central Sales Tax Act. The attempt of

the State of Tamil Nadu is to treat the said movement of

vehicles as inter-State sales and tax them which would

ultimately go back to that State by virtue of the provisions

contained in Articles 269 and 286 of the Constitution and

the Central Sales Tax Act. The appellant says that it did

not effect any inter-State sales and that there was only one

sale in the other State which has already been taxed under

the sales tax law of that other State. The appellant

complains that the same transaction cannot be taxed twice,

once as an intra-State sale by one State and again by the

State of Tamil Nadu as an inter-State sale. The appellant

complains that the reopening of assessments - in some cases,

even the re-assessment has been made and Central sales tax

levied - and taxing the same transaction once again [by the

State of Tamil Nadu] is causing serious harassment to the

appellant, making it impossible for it to carry on its

business operations in a smooth and orderly manner. It

approached the Madras High Court with the said grievance.

Thought a number of factual issues were also raised in the

writ petitions filed by the appellant, it was stated by

their counsel at the time of hearing that they do not

propose to invite the decision of the High Court on these

factual issues and that they would be confining their

submissions only to the questions of law, viz., the

interpretation of Section 6-A of the Central Sales Tax Act

and the power to reopen the orders accepting `F' Forms. In

certain other writ petitions filed by the appellant, several

State governments were impleaded as respondents. The prayer

in these writ petitions was that inasmuch as sales to S.T.Us

of those States are being treated and taxed as inter-State

sales by the State of Tamil Nadu, the levy of tax under the

other State sales tax enactments treating the very sales as

inter-State sales within those respective States is

unsustainable, and therefore, those State governments should

be directed to refund the tax collected by them to the

appellant. The High Court had dismissed to writ petitions

holding that (i) the Madras High Court cannot direct the

other State governments to refund the tax levied and

collected under their respective State sales tax enactments.

The appellant has to approach the authorities under those

Acts or the courts in those States for such relief, if they

are so advised. (ii) the provisions contained in Section 6-A

have no special status or content and cannot be elevated to

the status of a constitutional provision; it is like any

other provision under the Central Sales Tax Act. The order

accepting Form `F' is nothing more than a step-in-aid of,

or a part and parcel of, the assessment proceedings. (iii)

an order passed by the assessing authority accepting Form

`F' cannot be reopened except in accordance with Section 16,

32 and 55 of the Tamil Nadu General Sales Tax Act read with

sub-sections (2) and (2A) of Section 9 of the Central Sales

Tax Act. A mere change of opinion is not sufficient to

reopen the order accepting Form `F'. Having declared the law

thus, the High Court directed the appellant to prefer

appeals before the appropriate appellant authority where an

order of assessment has been made and to go and show cause

to the assessing authority where the appellant has

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approached the High Court at the sate of show-cause notice.

Sri K. Parasaran, learned counsel for the appellant,

urged the following contentions :

(1) Section 6-A creates a conclusive presumption which come

into play on proof of the truth of facts stated in Form `F'.

This conclusive presumption cannot be defeated by resorting

to the power of reopening conferred upon the authorities by

Section 16 of the Tamil Nadu General Sales Tax Act read with

Section 9(2) of the Central Sales Tax Act. The order

accepting Form `F' as true cannot also be reopened for the

reason that such order of acceptance gives rise to certain

consequences which cannot be rectified even if the order

accepting Form `F' is reopened and revised. The vehicles

have been transferred/consigned to the appellant's R.S.Os.

in various States which R.S.Os. have issued Forms `F' in

that behalf and which, on being produced by the appellant

before its assessing authority, have been accepted as true.

This means that the sale of the said vehicles in the other

State is an intra-State sale in that State and has in fact

been taxed as such. Now if the Tamil Nadu Sales Tax

authorities propose to reopen the said orders accepting the

said Forms `F' and levy Central sales tax treating the said

movement of vehicles to other States as inter-State sales,

the consequence would be that though there is only one sale,

it is being taxed by two different States under two

different State sales, the consequence would be that though

there is only one sale, it is being taxed by two different

States under two different enactments. This cannot be. The

cannot be. The show-cause notices issued by the Tamil Nadu

authorities do not say that there was a sale by the

appellant to its R.S.O. and another sale by the R.S.O. to

the State Transport Undertakings. Indeed, there cannot be a

sale between the appellant and its own R.S.O. A person

cannot sell to himself.

(2)(a) Section 6-A is an independent provision. An order

passed thereunder is not a part of the assessment order. An

order under Section 6-A has an independent existence of its

own. It is neither subject to appeal nor is it amenable to

power of revision. The order under Section 6-A is the result

of a conscious adjudication. For all these reasons too, it

must be held that an order accepting Form `F', once made, is

conclusive and is not liable to be reopened.

(b) even if it is held by a process of reasoning that an

order accepting Form `F' as true is amenable to power of

reopening under Section 16 of the Tamil Nadu General Sales

Tax Act read with Section 9(2) of the Central Sales Tax Act,

even then it must be held that until and unless reasonable

grounds exist for doubting the truth of the statements

contained in Form `F', it cannot be reopened. Merely because

an assessment is reopened, the orders accepting Forms `F'

cannot automatically be held amenable to the power of

reopening.

(3) All the sales effected by R.S.Os. in various other

States are all of the same pattern, whether the sale is to

S.T.U. or to any other person. Curiously enough, the

impugned reopening notices are confined only to sales

effected in favour of various State Transport Undertakings

in several States. No such attempt to reopen is made in

respect of sales effected to persons other than S.T.Us. As a

matter of fact, the S.T.Us. are nothing but manifestations

of their respective State governments. Since the

S.T.Us./State governments purchase vehicles in bulk, they

insist that the sale of vehicles should take place within

their respective State so that they may be able to derive

income in the shape of sales tax on those sales. Unless the

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sales are effected within their State and tax is paid

thereon under the sales tax enactment of that State, that

State government or S.T.U. is not prepared to purchase

vehicles from the appellant. Indeed, it is for this reason

also that the appellant maintains R.S.Os. almost in all the

States in the country. Simply because the orders are booked

by the R.S.Os. and sent to Head Offices, it does not follow

that the movement of vehicles is in pursuance of or is an

incident of a contract of sale.

(4) Section 4 of the Central Sales Tax Act provides

clearly that (a) in the case of specific or ascertained

goods, the sale of goods shall be deemed to take place

inside a State if the goods are within that State at the

time of the contract of sale and (b) in the case of

unascertained or future goods, the sale of goods should be

deemed to take place inside a State when the goods are

appropriated to the contract of sale by the seller or by the

buyer, whether the assent of the other party is prior or

subsequent to such appropriation. This principle is at

variance with the general principle contained in the Sale of

Goods Act. It must, therefore, be held that sale of vehicles

takes place only when they are appropriated towards their

order and the appropriation is only when the vehicles are

earmarked for delivery to the S.T.Us. The vehicles so

appropriated are always in the State to the S.T.U. of which

the vehicles are earmarked and delivered.

(5) in the absence of any Central machinery which can

decide disputes between the State, viz., where one State

claims that a particular transaction is an inter-State sale

and the other State claims that it is an intra-State sale

[within that State, i.e., itself], an order once made

accepting Form `F' as true must not be allowed to be

reopened. If it is allowed to be reopened, this Court may

provide that the appellant-assessee is entitled to implead

the other State [which has levied tax upon the same

transaction treating it as an intra-State sale within that

State] as a party-respondent before the assessing

authorities in Tamil Nadu [acting under Central Sales Tax

Act] so that an effective adjudication can be made as to the

true nature of the transactions/sale. This Court may also

consider whether a direction should be given to the Union of

India to create such a machinery in the interest of inter-

State trade and commerce and to ensure that the assessees

are not harassed and prejudiced by taxing the same

transaction twice over.

Sri A.K. Ganguly, learned counsel for the State of

Tamil Nadu, disputed the correctness of the various

submissions put forward by Sri Parasaran. He supported the

reasoning and conclusion of the Madras High Court and

submitted that an order under Section 6-A accepting Form `F'

as true will ordinary be passed in the course af assessment

proceeding and as part of the assessment order. There is no

reason to treat an order under Section 6-A as something

different from any other order under the Act. It is as much

amenable to power of reopening as nay other order under the

Act. Whether a particular movement of goods across the

boundaries of one State to another is a mere movement [i.e.,

in this case, a consignment of goods by the Head Offices to

its R.S.O.] or whether the movement is occasioned by a

contract of sale, is a question of fact and is not a

question of law. The said question has to be decided by the

appropriate authority in each case having regard to the

relevant facts and circumstances. The appellant was ill-

advised to approach the Madras High Court by way of writ

petitions at the initial stage of proceedings. Nothing

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prevented the appellant to satisfy the Tamil Nadu

authorities that it has effected no inter-State sales and

that the transfer of vehicles was only a transfer without

effecting a sale. If it succeeds in establishing the said

fact, it is obvious that no Central sales tax will be levied

by the Tamil Nadu authorities.

Article 269 of the Constitution says that "taxes on the

sale or purchase of goods other than newspapers, where such

sale or purchase takes place in the course of inter-State

trade or commerce", among other taxes, shall be levied and

collected by the Government of India but shall be assigned

to the States in the manner provided in clause (2) of the

said Article [vide Article 269(1)(g)]. "Taxes on the

consignment of goods (whether the consignment is to the

person making it or to any other person) where such

consignment takes place in the course of inter-State trade

of commerce" is one of the taxes mentioned in clause (1) of

Article 269. The power to levy consignment tax, however, is

conferred upon the Parliament by virtue of Entry 92-B of the

Union List. So far no such tax has been levied by the

Parliament. Clause (2) of Article 269 provides that the net

proceeds in any financial year of any duty or tax mentioned

in clause (1) shall not form part of the Consolidated Fund

of India but shall be assigned to the States within which

that duty or tax is leviable in that year and that the same

shall be distributed among those States in accordance with

such principles of distribution as may be formulated by

Parliament by law. Clause (3) further provides that

"Parliament may by law formulate principle for determining

when a sale or purchase of, or consignment of, goods takes

place in the course of inter-State trade of commerce".

By virtue of clause (1) of Article 286 of the

Constitution, the State legislature has no power to levy tax

on a sale which takes place outside that State or which

takes place in the course of import of goods into or export

of goods out of the territory of India. Clause (2) empowers

the Parliament to formulate, by making a law, principles for

determining when a sale or purchase of goods takes place

outside the State or in the course of import or export, as

the case may be. Clause (3) of Article 286 need not be

noticed for the purposes of this case.

It is well-known that Article 286 has been thoroughly

recast by the Constitution [Sixth Amendment] Act, 1956 which

also amended Article 269 substantially. It is in pursuance

of the said Articles, as recast/amended by Constitution

[Sixth Amendment] Act, that the Parliament enacted the

Central Sales Tax Act, 1956. Section 3 defines an "inter-

state sale". Section 4 sets out when a sale or purchase of

goods can be said to have taken place outside a State and

Section 5 provides when a sale or purchase of goods can be

said to have taken place in the course of import or export.

It is evident that these provision have been made pursuant

to Article 286 as well as clause (3) of Article 269. Section

6 of the Central Sales Tax Act is the charging section.

Section 6-A has been inserted by the Amendment Act 61 of

1972 with effect from April 1, 1973. This provision appears

to have been enacted in the light of the judgment of this

Court in Tata Engineering and Locomotive Company Limited v.

Assistant Commissioner of Commercial Tax, Jamshedpur & Anr.

[(1970) 20 S.T.C. 354]. Section 6-A provides that where any

dealer claims that he is not liable to pay tax under the

Central Sales Tax Act in respect of any goods on the ground

that the movement of such goods from one State to another

was occasioned by reason of transfer of such goods by him to

any other place of his business or to his agent or

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principal, as the case may be, not by reason of sale, the

burden of proving the said fact shall be upon him. For that

purpose, he may furnish to the assessing authority, within

the prescribed time, a declaration duly filled and signed by

the principal officer of the other place of business or by

his agent or principal, as the case may, be containing the

prescribed particulars, along with the evidence of despatch

of such goods Form `F' have to be obtained from the

prescribed authority. The section further provides that if

the assessing authority is satisfied after such enquiry as

he may deem necessary, that the particulars contained in the

declaration furnished by the dealer ar true, he may, at the

time of or at any time before the assessment af the tax

payable by the dealer under the Central Sales Tax Act, make

an order to that effect. Thereupon, the movement of goods to

which the declaration relates shall be deemed, for the

purpose of this Act, to have been occasioned other wise than

as a result of sale. It would be appropriate to set out the

section in its entirety:

"6A. Burden of proof, etc., in case

of transfer of goods claimed

otherwise than by way of sale-- (1)

Where any dealer claims that he is

not liable to pay tax under this

Act, in respect of any goods, on

the ground that the movement of

such goods from one State to

another was occasioned by reason of

transfer of such goods by him to

any other place of his business or

to his agent or principal, as the

case may be, and not be reason of

sale, the burden of proving that

the movement of those goods was so

occasioned shall be on that dealer

and for this purpose he may furnish

to the assessing authority, within

the prescribed time or within such

further time as that authority,

within such further time as that

authority may, for sufficient

cause, permit, a declaration, dully

filled and signed by the principal

officer of the other place of

business, or his agent or

principal, as the case may be,

containing the prescribed

particulars in the prescribed

particulars in the prescribed form

obtained from the prescribed

authority, along with the evidence

of despatch of such goods.

(2) If the assessing authority is

satisfied after making such inquiry

as he may deem necessary that the

particulars contained in the

declaration furnished by a dealer

under sub-section (1) are true he

may, at the time of, or at any time

before, the assessment of the tax

payable by the dealer under the

Act, make an order to that effect

and thereupon the movement of goods

to which the declaration related

shall be deemed for the purpose of

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this Act to have been occasioned

otherwise than as a result of sale.

Explanation -- In this section,

`assessing authority', in relation

to a dealer, means the authority

for the time being competent to

assess the tax payable by the

dealer under this Act."

The Central Sales Tax Act has not created a machinery

of its own to assess and collect the tax levied thereunder.

Probably because the tax will ultimately go to the state in

which the said tax is leviable, sub-sections (2) and (2A) of

Section 9 provide that the machinery provisions under the

respective State sales tax enactment shall be treated as the

machinery provisions under this Act for all purposes. Sub-

section (1) of Section 9 provides that the Central sales tax

shall be levied by the State from which the movement of the

goods commences. This provision is evidently relatable to

clause (2) of Articles 269, Section 13 confers the rule-

making power upon the Central Government for certain

purposes and upon State governments for certain other

purposes. [It is not necessary to refer to the other

provisions of the Act for the purposes of this Case.]

Rule 12 of the Central Sales Tax [Registration and

Turn-Over] Rules, 1957 is the rule made pursuant to Section

6-A among other sections of the Act. Sub-rule (5) of Rule 12

says that the declaration referred to in sub-section (1) of

Section 6-A shall be in Form `F". Sub-rule (6) says that

Form `F' referred to in sub-rule (5) of Rule 12, shall be

the one obtained by the transferee in the State in which the

goods covered by such Form are delivered. Sub-rule (7) says

that the declaration in Form `F' shall be furnished by the

dealer to the prescribed authority upto the time of

assessment by the first assessing authority. Clause (a) of

sub-rule (8) says that only the person referred to in Rule

3(1)(a) shall be competent to sign the declaration/Form `F'.

The Rules also prescribe the form in which Form `F' shall be

issued . It is in triplicate. It is issued by the prescribed

authority and contains his seal. It has to be signed by the

transferee and is addressed to the transferor affirming

that "the goods transferred to me/us as per details below

have been receive and duly accounted for". The person

signing it is obligated to mention his status in relation to

the transferor. In other words, Form `F' in the case before

us has to be issued by the person in charge of the R.S.O.

receiving the vehicles from Tamil Nadu - and sent to the

appellant. The appellant, in turn, has to produce the same

before his assessing authority who shall pass an order

accepting it is he is satisfied, after making the necessary

inquiry that the facts stated in the said Form are true.

Such an order means that the movement of goods mentioned in

the said Form from Tamil Nadu to the other State is not by

reason of sale but a mere transfer - to wit, not an inter-

State sale attracting Central sales tax.

By virtue of sub-section (2) of Section 9, the

machinery provisions under the Tamil Nadu General Sales Tax

Act are imported into the Central Sales Tax Act, as already

noticed. Section 16 of the Tamil Nadu Act provides for

reopening of assessments. It would be sufficient to notice

sub-section (1) of Section 16 which comprises two clauses

(a) and (b). The sub-section reads:

"16. Assessment of escaped

turnover.-- (1)(a) Where, for any

reason, the whole or any part of

the turnover of business of a

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dealer has escaped assessment to

tax, the assessing authority may,

subject to the provisions of sub-

section (2) at any time within a

period of five years from the

expiry of the year to which the tax

relates, determine to the best of

its judgments the turnover which

has escaped assessment and assess

the tax payable on such turnover

after making such enquiry as it may

consider necessary and after giving

the dealer a reasonable opportunity

to show cause against such

assessment.

(b) Where, for any reason, the

whole or any part of the turnover

of business of a dealer has been

assessed at a rate lower than the

rate at which it is assessable, the

assessing authority may, at any

time within a period of five years

from the expiry of the year to

which the tax relates, re-assess

the tax due after making such

enquiry as it may consider

necessary and after giving the

dealer a reasonable opportunity to

show cause against such re-

assessment."

[Emphasis added]

Sub-section (2) provides that where the escapement of

income is due to wilful non-disclosure of the dealer,

penalty can also be levied. Sub-section (3) says that the

power under section (1) can be exercised even if the order

assessment is the subject-matter of revision or appeal. Sub-

section (4), (5) and (6) deal with the manner in which the

period of limitation prescribed by the section should be

computed. Section 32 confers upon the Deputy Commissioner

the power to revise the orders or proceedings of any

subordinate authority made under the provisions specified

therein. This power can be exercised suo moto and only where

the order is prejudicial to the interests of Revenue. This

power has also to be exercised within five years from the

date of the order proposed to be revised. The contentions

urged by Sri Parasaran have to be examined in the light of

the above provisions of law and certain decisions, to which

he has invited our attention.

We find it difficult to agree with Sri Parasaran that

Section 6-A creates a conclusive presumption. It is true

that if the particulars stated in the declaration/Form `F'

are found to be true, the assessing authority shall pass an

order, either at the time of making of the assessment or at

any time before, that the contents of Form `F' are accepted

as true. On such order being made, it shall be deemed that

the movement of goods to which the form relates has been

occasioned otherwise than as a result of sale. But there are

no words in Section 6-A which can be said to create a

conclusive presumption or clothe the "deemed" fact with a

conclusive character. All that it says is that if the

particulars stated in Form `F' are true, certain fact shall

be presumed - or shall be or deemed to have taken place, as

the case may be. It is not possible to agree that the word

"deemed" in sub-section (2) of Section 6-A can be understood

as creating a conclusive presumption nor is it possible to

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agree that the fact "deemed" is final and conclusive.

Section 6-A merely states a rule of evidence. It says that

where a dealer claims that certain goods have been moved

from one State to another and that such movement has

occasioned otherwise than as a result of sale, the burden of

proving the same lies upon him. Besides creating the said

rules of evidence, the section also sets out how the said

burden can be discharged. It can be discharged by producing

Form `F' and on the particulars stated in the said form

being found true on being enquired into by the assessing

officer. From this it does not follow that once order is

made accepting Form `F' as true, it is not subject to the

power of reopening or revision contained in Section 16 and

32 of the Tamil Nadu General Sales Tax Act read with Section

92 of the Central Sales Tax Act. After all, Section 6-A is

also one of the provisions in this Act. There is no reason

to elevate it to a higher status than the rest of the

provisions. If it were the intention of the Parliament to

invest the "deemed" fact with the status of a conclusive

presumption, the Parliament would have said so . The Court

cannot supply that requirement. Ordinarily speaking, an

order accepting - or rejecting - Form `F' as true will be

passed only during the assessment proceedings. There may be

case where such an order is passed earlier to the making of

the assessment. Even so, such an order is incidental to and

integrally connected with the assessment of the dealer. The

High Court has characterised the said provision as a step-

in-aid of assessment. Be that as it may, if the very

assessment is subject to the power of reopening or revision,

it is un-understandable as to how an order under Section 6-

A(2) is not similarly amenable. The power to reopen can

exercise under Section 16 of the Tamil Nadu General Sales

Tax Act "where for any reason the whole or any part of the

turnover of business of a dealer has escaped assessment to

tax". The power is very wide, though it may be that it

should not be mechanically or lightly exercised.

Sri Parasaran has relied upon certain decisions in

support of his contention. The first decision relied upon is

in Izhar Ahmad Khan v. Union of India [1962 Suppl.(3)

S.C.R. 235], which dealt inter alia with Section 9 of the

Citizenship Act, 1955. Sub-section (1) of Section 9 provides

that if any citizen of India voluntarily acquires

citizenship of another country, he shall cease to be a

citizen of India with effect from the date of such

acquisition. Sub-section (2) says that if any question

arises as to whether, when or how any person has acquired

citizenship of another country, it shall be determined by

such authority in such manner and having regard to such

rules of evidence as may be prescribed in that behalf. Rule

30 of the Rules framed under the Act prescribes Central

Government as the authority to decided the said question

while Rule 3 incorporate a conclusive presumption. According

to it, "fact that a citizen of India has obtained on any

date a passport from the government of any other country

shall be conclusive proof of his having voluntarily acquired

the citizenship of the country before that date". The

petitioner challenged the validity of Rule 3 saying that

Rule 3 was not a mere rule of evidence but a rule of

substantive law and, therefore, outside the purview of the

delegated authority conferred by Section 9(2) as well as

general rule-making power conferred upon the Central

Government by Section 18. Indeed, Section 9(2) itself was

impugned on the ground that it purported to deprive the

petitioner of their fundamental right under Article 19(1)(e)

of the Constitution. All these contentions were rejected. We

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are unable to see how the ratio of or discussion in this

decision in this decision is of any help to the appellant

herein. Rule 3 of the Citizenship Act expressly enacts a

conclusive presumption and that called for a discussion as

to the nature of presumptions, the types of presumptions and

their evidentiary value.

Mahant Dharam Das v. State of Punjab [1975 (3) S.C.R.

160] dealt with certain provision of the Sikh Gurudwara Act,

1925. Section 3(4) of the Act made the declaration in the

notification issued under Section 3(2) that a particular

institution is a Sikh Gurudwara conclusive and beyond

challenge. The constitutionality of the said provision along

with certain other provisions was challenged by the

appellants before this Court. This Court examined the

historical background to the said Act, the scheme of the Act

and its object and repelled the challenge to he validity of

its provisions. The court held that the determination under

Section 3(4) is not a judicial determination and that it was

designed to obviate the prospect of a protracted litigation

in a matter involving the religious sentiments of a large

section of sensitive people proud of their heritage.

Creation of the said conclusive presumption by the statute,

the Court held, was neither incompetent nor discriminatory.

We may again point out that this decision also dealt with a

statutory provision which expressly created a conclusive

presumption unlike the case before us.

Section 29-B of the Uttar Pradesh Sales Tax Act,

considered by this Court in Sodhi Transport v. State of

Uttar Pradesh [1986 (1) S.C.R. 939], provided that "when a

vehicle coming from any place outside the State and bound

for any other place outside the State passes through the

State, the driver or other person in charge of such vehicle

shall obtain in the prescribed manner a transit pass from

the officer in charge of the first check post or barrier

after his entry into the State and deliver it to the officer

in charge of the check post or barrier before his exit from

the State, failing which it shall be presumed that the goods

carried thereby have been sold within the State by the owner

or person in charge of the vehicle". It is relevant to

notice that the said provision did not create a conclusive

presumption but only a rebuttable presumption of law. Since

the said provision did not create a conclusive presumption

but permitted the person concerned to rebut the said

presumption by such evidence, as he may place before the

authority, the validity of the said provision was held to be

beyond challenge. This decision, in our opinion, is equally

of no help to the appellant herein.

Sri Parasaran then relied upon the decision in

Balabhagas Hulaschand & Anr. v. State of Orissa [(1976) 37

S.T.C. 207]. At page 214, Fazl Ali, J. set out certain

situations to illustrate when does an inter-State sale take

place or for that matter it does not. Case No.II reads thus:

"Case No.II.--A, who is a dealer in

State x, agrees to sell goods to B,

but he books the goods from State x

to State Y in his own name and his

agent in State Y receives the goods

on behalf of A. Thereafter the

goods are delivered to B in State Y

and if B accepts them a sale takes

place. It will be seen that in this

case the movement of goods is sell

nor is the movement occasioned by

the sale. The seller himself takes

the goods to State Y and sells the

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goods there. This is, therefore,

purely any internal sale which

takes place in State Y and falls

beyond the purview of section 3(a)

of the Central Sales Tax Act not

being an inter-State sale."

Sri Parasaran says that the facts of his case fall

squarely within the said Case No.II. It is, however,

relevant to notice that "Case No.II" in this decision has

been explained in a later decision of this Court in Sahney

Steel and Press Works Ltd. & Anr. v. Commercial Tax Officer

& Ors. [(1985) 60 S.T.C. 301]. This is how the said

illustrative Case No.II in Balabhagas Hulaschand has been

dealt with in Sahney Steel and Press:

"Considerable reliance has been

placed by the petitioners on one of

the illustrations given by this

Court in Balabhagas Hulaschand v.

State of Orissa [1976] 37 STC 207

(SC) where case No.II was set out

as follows:

`Case No.II.--A, who is a dealer in

State z, agrees to sell goods to B,

but he books the goods from State x

to State Y in his own name and his

agent in State Y receives the goods

on behalf of A. Thereafter the

goods are delivered to B in State Y

and if B accepts them a sale takes

place. It will be seen that in

this case the movement of goods is

neither in pursuance of the

agreement to the sell nor is the

movement occasioned by the sale.

The seller himself takes the goods

to State Y and sells the goods

there. This is, therefore, purely

any internal sale which takes place

in State Y and falls beyond the

purview of section 3(a) of the

Central Sales Tax Act not being an

inter-State sale.'

It is not clear from this

illustration whether the goods were

particular and specific goods

earmarked for delivery to the buyer

when they commenced their movement

from State X. Apparently not,

because it is pointed out that the

movement of the goods was neither

in pursuance of the agreement to

sell nor was the movement

occasioned by the sale. The case

is distinguishable from the present

one where particular goods were

manufactured in Hyderabad in

satisfaction of an order placed by

the buyer who desired delivery

outside the State. The goods moved

from the registered office at

Hyderabad as a result of a covenant

in the contract that the goods

manufactured at Hyderabad according

to the specifications stipulated by

the buyer should be the very goods

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delivered to him outside the

State."

Indeed, the decision in Sahney Steel and Press is

precisely, what the Tamil Nadu State says is, the factual

position in cases where notices to reopen the assessments

have been given. The facts of Sahney Steel and Press are the

following: the petitioner-company was engaged in the

manufacture and sale of certain steel products which were

utilised as raw-material for making electronic motors,

transformer etc. The petitioner's registered office and

factory was at Hyderabad in Andhra Pradesh. It had branches

in Bombay, Calcutta and Coimbatore which were engaged in

effecting sales and looking after sales promotion and

liaison work. The branches received orders from customers

within and outside their respective States for the supply of

goods conforming to definite specifications and drawing and

advised the registered office at Hyderabad. The petitioner

thereupon manufactured the goods according to the said

design and specification, at Hyderabad, and despatched them

to the respective branches by way of transfer of stock. Such

goods were booked to "self" and sent by lorries. The goods

received by the branches were entered into the stock account

of the branches and kept in stock for ultimate delivery to

the customers. The customers examined the goods at such

branches and accepted them. The branches raised the bills

and received the sale price. They also furnished Form `F' to

the registered office at Hyderabad. On these facts, the

question arose whether it is an inter-State sale taxable in

the State of Andhra Pradesh or whether it is an intra-State

sale in the other State where the goods are delivered. It

was held that it was a case of an inter-State sale and that

the movement of goods from Hyderabad in Andhra Pradesh to

the other State was as a result of an on incident of the

contract of sale. Of course, it was a case where the goods

were manufactured according to the design and specification

supplied by customers and them despatched from Hyderabad to

such other State. Be that as it may, since we are not

concerned with the facts in these appeals, it is not for us

to say what is the factual situation in the matter now

pending before the assessing authorities and what is the

proper inference to be drawn therefrom.

The last decision relied upon by Sri Parasaran is in

Chunni Lal Parshadi Lal v. Commissioner of Sales Tax,

Lucknow [(1986) 62 S.T.C. 112]. Where a dealer sold the

goods to another registered dealer and if the purchasing

dealer furnished the certificate in Form III-A [which means

that the goods purchased were intended for resale in the

same condition] the selling dealer was not liable to pay tax

under the Uttar Pradesh Sale Tax Act. In that case, the

purchasing dealer furnished Form III-A which was produced by

the assessee-dealer and on that basis, his sale was not

taxed. Subsequently, it was found that the purchasing dealer

did not resell those goods but used them otherwise. On that

basis, the assessment of the selling dealer was sought to be

reopened. It was held by this Court that the reopening of

assessment was incompetent in law inasmuch as there was no

finding that there was collusion between the selling dealer

and the purchasing dealer. It was held that the mere fact

that the purchasing dealer. It was held that the mere fact

that the purchasing dealer is subsequently found to have

issued Form III-A wrongly does not confer upon the assessing

authority the jurisdiction to reopen the assessment of the

selling dealer. The principle of this decision, we find, has

no analogy to the situation in the appeals before us.

We are, therefore, of the opinion that Section 6-A does

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not create a conclusive presumption and that an order

accepting Form `F', whether passed during the assessment or

at any point earlier thereto, is ultimately a part and

parcel of the order of assessment. Its amenability to power

of reopening and revision depends upon the provisions of the

concerned State sales tax enactment by virtue of Section

9(2). It is also not possible to agree that an order under

Section 6-A(2) has an independent existence. It does not

have. An order refusing to accept Form `F' may or may not be

appealable independently depending upon the provisions of

the local sales tax enactment but it is certainly capable of

being questioned in the appeal preferred against the order

of assessment - for the simple reason that an order

accepting or rejecting Form `F' does affect the quantum of

turnover taxable under the Act. So far as the power of

reopening is concerned, it is enough for us to say that if

the order(s) accepting Form(s) `F' is sought to be reopened,

it can be done as part of reopening of assessment or , may

be, independently - that depends upon the language of the

relevant provision in the local sales tax enactment. In the

present case, the provision relevant is Section 16 of the

Tamil Nadu General Sales Tax Act. From the language of

Section 16, it appears that it may be possible to reopen an

order accepting Form `F' as true without, at the same time,

reopening the assessment. Even so, it must be noticed that

such a reopening necessarily leads to revisions/modification

of the assessment order. It is equally obvious that if the

reopening is confined to the order accepting Form `F' as

true, the inquiry shall be confined to the matters relevant

thereto. Whether that power has been exercised validly in

these case does not fall for our consideration. Hence, no

opinion need be expressed on that aspect. The fact that the

assessments are sought to be reopened only in respect of the

turnover relating to sale of vehicles to State Transport

Undertakings in various States but not with respect to

turnover relating to sales to persons other than S.T.Us.

cannot be a ground to invalidate the proceedings taken.

Sri Parasaran laid stress upon the meaning and content

of Section 4 of the Central Sales Tax Act. He submitted that

the law is different in the case of specific or ascertained

goods and unascertained or future goods. According to the

principles of this section, Sri Parasaran says, the sale of

vehicles must be held to have taken place in the State in

which they are delivered [to the S.T.U. concerned]. But this

is again a question of fact upon which no opinion can be

expressed in these proceedings. Whether the contract of sale

was in respect of specific or ascertained goods or whether

it was in respect of unascertained or future goods and if it

is the latter, when did the appropriation of the goods to

the contract of sale take place are all questions of fact

which do not arise for consideration in these appeals. Sri

Parasaran says that even according to the show-cause notices

issued by the Tamil Nadu authorities under Section 16 of the

Tamil Nadu General Sale Tax Act read with Section 9(2) of

the Central Sales Tax Act, there is only one sale, namely,

the sale to the S.T.U. in the other State concerned. This

sale, according to the learned counsel, has taken place in

the other State. May be or may not be According to the

respondents, the sale that has taken place is an inter-State

sale. This is yet again a question of fact.

Having thus disposed of the main contentions of the

appellant, we must yet say that the situation the appellant,

we must yet say that the situation the appellant is facing

is no doubt real, which may indeed put it in good amount of

jeopardy. If the vehicles which have been sold to, say,

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Maharashtra S.T.U. have been moved to the appellant's R.S.O

in Maharashtra and that R.S.O. has issued Form `F' [which

Form `F' has been accepted by the Tamil Nadu authorities

during the course of assessment of the appellant for the

relevant assessment year] reopening the said

assessment/orders accepting Form `F' after a number of

years, seeking to treat the said movement of goods as

consequent upon or incidental to contract(s) of sale [and,

therefore, amounting to inter-State sale taxable in the

State of Tamil Nadu] does present the appellant with a

serious problem inasmuch as it says that it has already paid

tax on sale of said vehicles in Maharashtra under the Bombay

Sale Tax Act. Sri Parasaran submits that unless the sales

are effected within the purchasing State, those States [and

their S.T.Us.] are not willing to purchase from the

appellant. Learned counsel suggests that inasmuch as the

State governments, generally speaking, are strapped for

funds and since sales tax is the major source of revenue for

all of them, every State is trying to derive the maximum

revenue on this account and because the Central sales tax

levied and collected in a State ultimately goes back to that

State, the Tamil Nadu State is anxious to treat the

consignment/transfer of vehicles as inter-State sales. The

learned counsel bitterly complains about the attitude

adopted by the Sale Tax authorities in Tamil Nadu who,

according to him, are pre-determined to treat the

transactions as inter-State sales and levy tax thereon

ignoring the true facts and the correct legal situation.

While we do not express any opinion on the correctness or

otherwise of this submission, this case brings to the fore

the advisability or necessity of having a Central mechanism

which would decide once for all questions of this nature. We

may elucidate the point. The Maharashtra State has levied

tax upon the sale of vehicles by the appellant to

Maharashtra S.T.U. under the Bombay Sales Tax Act treating

them as sales effected in the State of Maharashtra. Those

orders have become final. Now, the Tamil Nadu authorities

are seeking to reopen the assessment and proposing to treat

the said movement of vehicles from Tamil Nadu to Maharashtra

as inter-State sales. Suppose, tomorrow it is held by the

Tamil Nadu authorities that they were indeed inter-State

sales and tax is levied and collected by the Tamil Nadu

State, can the appellant go and legitimately ask the

Maharashtra authorities to refund the tax paid by it on the

sale of vehicles in Maharashtra? It may not be able to do

so, as the law now stands. The Maharashtra authorities may

well tell the appellant that those orders have become final

and their orders cannot be reopened because authorities of

another State have taken a contrary view. We are not sure

whether it is possible to stipulate that while deciding the

question whether the said transfer of vehicles constitutes

inter-State sale or not, the Tamil Nadu authorities shall

give notice to, implead the Maharashtra Sales Tax

authorities, hear them and decide so that their decision

would be binding upon the Maharashtra authorities. The law

as now in force does not appear to permit such a course more

particularly in a situation where the orders of Maharashtra

Sales Tax authorities have become final, as stated above.

The Maharashtra authorities may well refuse to appear before

the Tamil Nadu authorities. They may not accept the

jurisdiction of Tamil Nadu authorities over them or over the

order passed by them. They may also refuse to submit to the

jurisdiction of the Tamil Nadu authorities. On this aspect,

we must, however, notice an observation in a recent decision

of this Court in Bharat Heavy Electricals Limited v. Union

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of India [1996 (4) S.C.C. 230], wherein the following

observation occurs at page 239:

"If a dispute arises in which State

is the tax lawfully leviable, the

authorities under the Act have got

to decide it. If, in a given case,

an assessee says that the

particular transaction which is

sought to be taxed in State `A' has

already been taxed in State `B',

nothing prevents him from

impleading State `B' in proceeding

in State `A' and have the matter

decided in the presence of all

parties. It must be remembered that

while acting under the Central

Government and not as the machinery

of the State Government. This view

of ours get reinforced if one keeps

the provisions in Section 8(2-A) of

the Central Sales Tax Act in view."

The said observation, no doubt, projects a point of

view, but it has to be understood in the particular facts of

that case. In that case, orders of Sales Tax authorities of

any particular State had not become final. When more than

one State sought to tax the same transaction on different

bases, B.H.E.L. came to this Court by way of a writ petition

under Article 32 of the Constitution and certain directions

were made by this Court. Moreover, the matter there was

decided by the High Court and the various State governments

who were impleaded as respondents did not object to the

jurisdiction of the High Court to decide the dispute -

dispute as to the true nature of the transaction and who

should tax it. In this matter, the situation is different.

The orders of several State authorities have become final

and there is no way provided by the Act following which the

finality of those orders can be undone and the question of

the true nature of the transaction decided afresh with

participation of the State authorities of both the States.

There is yet another fact, viz., the State governments are

objecting to the jurisdiction of Tamil Nadu Sale Tax

authorities to summon them and decide the question which may

require them to revise own orders. This situation did not

arise in B.H.E.L. It is in this situation that the idea of a

Central mechanism has come to fore. This does not, of

course, mean that this court cannot devise an appropriate

method to meet the interests of justice. It can Appropriate

directions can always be given to both the concerned States

to submit to the jurisdiction of the particular designated

Court or Tribunal which will decide the questions regarding

the true nature of the transaction after hearing all the

affected parties. The fact that those orders of authorities

in certain proceedings have become final may not stand in

the way of this Court giving appropriate directions under

Article 32 or 136 or 142, as the case may be, but that

situation has not yet arisen in this case. Let the Tamil

Nadu assessing authorities first decide the matter before

them. Thereafter, if the orders are against the appellant,

were permit the appellant to file the appeal (s) directly

before the Tribunal. If the Tribunal decides in favour of

the appellant, no further question would arise. But if it

decides against the appellant, to wit, if it holds that the

scale of vehicles to the S.T.Us. of various State are inter-

State sales and if it is found that those very transaction

have also been taxed as intra-State sales under the State

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sales tax enactments of another State, that would be the

stage for considering the advisability of giving appropriate

directions of the nature contemplated above by the Court -

that is, of course, if by that time, no central mechanism to

meet such a situation comes into existence.

In the interest of inter-State trade and commerce, the

suggestion for creation of a central mechanism to decide

such disputes - which are really in nature of inter-State

disputes - may be well worth considering; every dealer

affected may not be in a position to approach this Court for

appropriate directions. it is for the Government of India to

consider this aspect and take necessary decision in that

behalf.

In the light of the above discussion, we dismiss these

appeals. If the assessing authorities decide against the

appellant, it shall be open to them to file appeal(s) before

the Tribunal directly. [This direction is given to shorten

the litigation and in the interests of justice.] If and when

the Tribunal decides against the appellant, it shall be open

to the appellant to approach this Court for appropriate

directions. In the circumstances of the case, it is further

directed that in case the Tamil Nadu Sale Tax Appellant

Tribunal comes to the conclusion that the transactions in

question are inter-State sales upon which Central sales tax

is leviable in the State of Tamil Nadu, the State of Tamil

Nadu shall not enforce their demand for a period of eight

weeks from the date of the decision of the Tribunal.

Further, till the issue is decided by the Sale Tax Appellate

Tribunal, no Central sales tax shall be demanded from the

appellant, provided it is established by the appellant that

in respect of the transaction, the appellant has paid tax in

another State treating it as an intra-State sale in that

other State.

The appeals are accordingly dismissed. No Costs.