ONKARLAL NANDLAL versus STATE OF RAJASTHAN & ANR.

Citation: [1985] SUPP. 3 S.C.R. 1075 · Decided: 23-09-1985 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Appeal(s) allowed

Judgment (excerpt)

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1075 
ONKARLAL NANDLAL 
v. 
STATE OF RAJASTHAN & ANR. 
SEPTEMliEK 23, 1985 
[P.N, BHACMATI, C.J., R,S, PATHAK AND A,N, SEN, JJ,] 
Rajasthan Sales Tax Act, 
1954, s.2(o) Explanation II -
Intervretatlon of - Effect of incorporating sub-s.(2) of s.4 of 
Central Sales Tax Act 1956 in the Explanation - l<esale of goods 
in the course of inter-State trade of commerce -
\~hether it can 
still be regarded as resale within the State. 
Interpretation of 
Statutes -
&lle of 
incorporation -
Explained. 
Practice & Procedure - Appeal directly against an order by 
an Officer in the hierarchy·- When can be entertained - Art. 136, 
A 
B 
c 
Constitution of India. 
D 
The Rajasthan Sales Tax Act 1954 (State Act) by Sub-section 
(o) of section 2 defines "sale" to mean inter alia "any transfer 
of property in goods for cash or for def erred payment or for any 
other valuable consideration. Explanation (ii) of section ·2(0) 
provides that "a transfer of property in goods shall be deemed to 
have been made within the State if it fulfils the requirements of 
sub-sec. (2) of s. 4 of the Central Sales Tax Act, 1956 (Central 
Act). Sub-s.(s) of sec.2 defines "taxable turn over" to mean 
"that par~" of turn over which remains after deducting therefrom 
the aggregate amount of the proceeds of sale of goods, which have 
been sold to persons outside the State for consumption outside 
the State. Sub-s.(l) of sec.4 of the Central Act provides that 
subject to the provisions contained in sec.3, when a sale or 
purchase is determined in accordance with sub-s.2 to take place 
inside a State, such sale or purchase shall be deemed to have 
taken place outside all other States. Sub-s.(2) lays down that a 
sale or purchase of goods shall be deemed to take place inside a 
State, if the goods are within the State in the case of specified 
or ascertained goods, at the time the contract of sale is made. 
The appellant-assessee, a registered dealer both· under the 
provisions of the State Act and the Central Act, purchased poppy 
seeds against Declarations in Form No •. s.T.17 furnished to the 
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1076 
SUPR&'!E COURT REPCRTS 
[1985] SUPP.3 s.c.R. 
selling dealers. In the Declarations in Form No. S.T.17 it was 
stated that the assessee was purchasing the poppy seeds for the 
purpose of "resale within the State". The assessee, resold the 
poppy seeds to different buyers under contracts executed by and 
between the assessee and the buyers at Bhawani Mandi. Admittedly, 
when these contracts were made between the assessee and the 
buyers, the poppy seeds forming subject matter of the contracts 
were specific goods in deliverable condition situate in Bhawani 
Mandi and the property in the poppy seeds accordingly passed to 
the buyers under the contracts in Bhawani Mandi. While completing 
the assessment of the assessee to sales tax for the assessment 
years 1975-76 and 1976-77, the Colllllercial Tax Officer included 
the purchase price paid by the assessee for the poppy seeds in 
his taxable turn over under the provisions of second proviso to 
cl.4 of suH.(s) of s.2 of the State Act on the ground that the 
resales of the poppy seeds effected by the assessee were sales in 
the course of inter-State trade and connnerce and were therefore 
not sales within the State and hence the poppy seeds purchased by 
the assessee were used for a purpose other than that mentioned in 
the Declarations. 
Aggrieved by the aforesaid order, the assessee preferred 
civil appeals Nos. 207 and 208 of 1983 by special leave directly 
to Supreme Court. The facts of these appeals are broadly similar 
to the facts of the other appeals comprised in this group. 
Counsel on behalf of the appellant contended (i) that though it 
was true that the resales effected by it were sales in course of 
inter-State trade or connnerce as defined in sub-s.(3) of the 
Central Act, they were still sales within the State in accordance 
with the principles formulated in sub-s.(2) of sec.4 of the 
Central Act; (ii) that the resale by it being sales in the course 
of inter-State trade or connnerce, were not liable to be taxed by 
the State and could be taxed only by the'Central Government under 
the Central Act but that did not deprive the resales of their 
character of sales within the State which character attached to 
them by reason of sub-s.(2) of sec.4 which was incorporated in 
the State Act by Explanation II to suH.(o) of sec.2 of the 
State Act and (iii) that what was incorp

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