THE STATE OF MADRAS versus M/S RADIO AND ELECTRICAL LTD. ETC.

Citation: [1966] SUPP. 1 S.C.R. 198 · Decided: 19-04-1966 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

' 
A 
B 
c 
MADRAS V. RADIO & ELEOT!\ICALS LTD. (Shah, J,) 
199 
It is contemplated in sec. 7 and the Rules that the certificate of 
registration may only be issued after an objective satisfaction by the 
notified authority that the spec1fi0d goods are l!kely to be needed ior 
the purpose of business of the registered dealer, and that satsfac-
tion is open to challenge in an appropnate proceedmg before the 
High Court and even before this Court. Correctness or propriety of 
satisfaction of the notified authority in issuing the certificate in 
Form 'B' that the goods are likely to be required for the purpose of 
the business would not however be again open to challenge before 
another taxing authority in proceedings for assessment of tax. 
[206 G-207 BJ. 
Indian Copper Corporation Ltd, v. Commissioner of Commercial 
Taxes, Bihar & Others 16 S.T.C. 25~ and J.K. Cottoro Spinning 
& 
Weaving Co. Ltd. v. The Sales Tax Officer, Kanpur & Another 16 
S.T.C. 563, referred 1to. 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 334, 
335 and 338 of 1965. 
Appeals by Special Leave from the judgment and orders 
dated January I, 1963, November 7, 1962 and November 4, 1963 
of the Madras High Court in Tax Case No. 170 of 1961 Civil Revi-
sion Petition No. 105 of 1961 and Tax Case No. 153 of 1963 res-
D 
pectively. 
B 
r 
G 
H 
Bishan Narain and A. V. Rang am, for the appellants (in 
C.As. Nos. 334 and 335 of 1965). 
A. V. Rangam, for the appellant (in C.A. No. 338/1965). 
K. R. Chaudhuri, for the respondent (in C. A. No 334/1965). 
N. D. Karkhanis, O.C. Mathur, J.B. Dadachanji and Ravinder 
Narain. for the respondents (in C.As. Nos. 335 and 338/1965). 
The Judgment of the Court was delivered by 
Shah. J. This is a group of appeals filed by the State of 
Madras against orders passed by the High Court of Judicature at 
Madras which raises the following common question as to appli· 
cability of concessional rate of sales tax to transactions of inter-
State sale and taxable under the Central Sales Tax Act, 1956: 
"When a purchasing dealer in one State furnishes in 
Form 'C' prescribed under the Central Sales Tax (Registra-
tion & Turnover) Rules, 1957, to the selling dealer in another 
State a declaration, certifying that the goods ordered, pur-
chased or supplied are covered by the certificate Clf registra-
tion obtained by the purchasing dealer in Form 'B' prescrib-
ed under r. 5(1) of the Central Sales Tax (Registration & 
Turnover) Rules, 1957, and that the goods are intended for 
resale, or for use in manufacture of goods for sale, or for nse 
in the execution of contracts, or for packing of goods for 
resale, and that declaration is produced by the selling dealer, 
is it open to the Sales Tax authority under the Central Sales 
Tax Act to deny to the selling dealer the benefit of conces-
sional rates under s. 8(1) of the Central Sales Tax Act, 19S6. 
J,IS5SCI-15 
200 
SUPREME OOURT REPORTS 
(1966] SL'PP. B.O.R, 
on the view that the certificate in Form 'C' mentions more 
purposes than one for which the goods arc intended to be used, 
or that the goods are incapable of being used for the purpose 
for whic~ they are declared to be purchased, or that the goods 
are applied for some other purpose not mentioned in the certi-
ficate in Form 'C'?'' 
We may briefly set out the facts which give rise to two out of 
the appeals: Civil Appeals Nos. 334 & 335 of 1965. 
Civil Appeal No. 334 of 1965. MI s Radio & Electricals Ltd., 
respondents in this appeal-<:arry on business in the State of 
Madras in electrical equipment and are registered as dealers under 
the Central Sales Tax Act. The Bombay State Electricity Board, 
Saurashtra Division, which is engaged in the production of electric 
energy purchased transformers and other goods of the total value 
of Rs. 1,42,020/- from Mis. Radio & Electricals Ltd. and the 
latter claimed in proceeding for assessment for Central sales-tax for 
the year 1957-58 that they were liable to pay tax at the rate of I 
per cent on the turnover under s. 8(1) of the Central Sales Tax Act. 
The Deputy Commercial Tax Officer rejected the claim on the 
ground that the Bombay State Electricity Board was not a dealer 
engaged in selling goods and merely because they held a registra-
tion certificate, the goods sold to the Board could not be admitted 
to the concessional rate of tax under s. 8(1) of the Act. The Appel-
late Assistant Commissioner of Commercial Taxes confirmed the 
order on the ground that transformers a
Excerpt shown. Read the full judgment & AI analysis in Lexace.