ASHOK LEYLAND LIMITED ETC. versus UNION OF INDIA AND ORS.

Citation: [1997] 2 S.C.R. 224 · Decided: 20-02-1997 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Dismissed

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Judgment (excerpt)

A 
B 
ASHOK LEYLAND LIMITED ETC. 
v: 
UNION OF INDIA AND ORS. 
FEBRUARY 20, 1997 
[B.P. JEEVAN REDDY AND S.B. MAJMUDAR, JJ.] 
Tamil Nadu General Sales TaxAct-Ss. 16(1a & b)(2)(3)(4)(5)(6), 32, 
55-Sales Tax paid in the respective states where the sales took place on sale 
of trucks to State organisations and others through the manufacturing 
C Company's R.S.O. 's in different States after receipt of the vehicles from Tamil 
Nadu-The State under S. 6(A) has power to reopen assessment, even after 
acceptance of Fonn 'F', though this power should not be mechanically exer-
cised-Appeal against assessment order is possible-In the present case, in 
view of practical difficulties, Appellants to apply to Tribunal if assessing 
D authorities hold against them. 
Central Sales Tax Act 1956-Ss. 3,4,5,6(A), 9(1)(2) & (2A)-Question 
whether goods manufactured in one State and sold ·In other States through 
R.S.O.'s is inter-State or Intra-State trade-Question left open. 
E 
Central Sales Tax (Registration and Tum-over) Rules, 1957-Rule 
12(5), (6), (7) & (Ba)-Constitlltion of India-Arts. 269, 286-Cls I & 2; 
Entry 92-B of the Union List. 
Inter-State Trade and Commerce : 
F 
Inter-State disputes-Deciding of-Creation of a Central mechanism--
Worth considerint;-Suggestion given. 
The Appellant have been manufacturing vehicles in Tamil Nadu and 
selling them all over India, in different State, through their R.S.0.'s to 
both State Corporations and others. They had also been supplying 'F' form 
G to the Sale Tax authorities in T.N., if the veh.icle is manufactured in that 
State, and paying sales tax in the State where the vehicle was ultimately 
sold. The T.N. Sale Tax authorities, though they had accepted the 'F' 
forms, sought to reopen concluded assessments on the ground that as per 
S. 3(a) of the Central Sales Tax Act such sales were inter-State trade. The 
H Appellants challenged the action of the T.N. Govt. before the Madras High 
224 
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ASH OK LEYLAND LTD. v. U.O.L 
225 
Court by a writ petition alleging inter alia, that there was no inter-State A 
trade, that the action of the Tamil Nadu Government has resulted in 
double taxation, and that the reopening of assessments after a long gap 
was making it difficult for them to carry on business. They prayed for a 
direction to the various State Govts. to whom they had paid the sales tax 
already to refund the same. The High Court was pleased to dismiss the B 
said Writ Petitions by holding that the appellants have to approach the 
State Govts. in the matter of refund of tax and that the Court cannot give 
directions to State Govts. in this matter; the acceptance of form 'F' is a 
part of the normal assessment proceedings and the provisions of S. 6A 
have no special status and therefore cannot be raised to a constitutional 
position; the reopening of assessment, on mere change of opinion is not C 
sufficient reason, but can be only in accordance with the provisions of Ss. 
16, 32 and 55 of the T.N. Sales Tax Act read with S. 9(2) and (2A) of the 
Central Sales Tax Act. The Appellants were directed to file appeals before 
the appropriate Appellate authority. 
D 
The Appellants thereupon filed an appeal against the order of the 
Hon'bie High Court before this Court contending, inter a/ia, that S. 6A 
creates a conclusive presumption based on the truth of the facts set out in 
Form 'F'. Once the truth of form 'F' is accepted and order is passed, the 
Govt. cannot reopen/revise the assessment since the consequences of ac-
cepting the form cannot be rectified the sale ofvehicle is only an intra-state E 
sale and is taxed on thafbasis. If the T.N. G.ovt. reopens the assessment 
on the basis that it is inter-state sale then there will be double taxation by 
two different States under two enactments though in reality there is only 
one sale. The show cause notice also does not allege two sales, the 
provisions of S. 6-A are independent and is not subject to appeal/revision; F 
even if the Govt. has power to re open the assessment under S. 16 of the 
T.N. General Sales Tax Act read with S. 9(2) of the Central Sales Tax Act, 
they cannot do so unless there is a reasonable ground for doubting the 
facts in facts in form 'F' though the sales are effected to both S.T.U.'s and 
others in the variou_s States, only cases of sale to S.T.U.'s is reopened. The 
States are interested in having the sale conducted in the State in which G 
purchase is made since the orders are large and they sta

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