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Karfule Pvt. Ltd. Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMumbai High Court
Decided On
Case NumberSales Tax Applications Nos. 10, 11, 12 and 13 of 1984
Judge
Reported in[1986]61STC216(Bom)
Acts Bombay Sales of Motor Spirit Taxation Act, 1958 - Sections 21(2); Bombay Sales of Motor Spirit Taxation Rules, 1958 - Rule 15 and 15(3)
AppellantKarfule Pvt. Ltd.
RespondentCommissioner of Sales Tax
Excerpt:
sales tax - refund - section 21 (2) of bombay sales of motor spirit taxation act, 1958 and rules 15 and 15 (3) of bombay sales of motor spirit taxation rules, 1958 - whether sales tax department ought to have made an order for refund on admitted shortage of sale of motor spirit - loss or evaporation took place when motor spirit stored in tanks of purchasing dealer - rule 15 (3) does not come into play - to sustain claim for refund it must be established that refund granted by selling trader to purchasing trader in respect of quantity of motor spirit was lost on account of leakage - this not established - petition dismissed. - [couto; m.l. pendse, jj.] in the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the.....kania, j.1. these are four petition under section 21(2) of the bombay sales of motor spirit taxation act, 1958 (referred to hereinafter as 'the motor spirit taxation act'), for directing the sales tax tribunal to forward to this court statements of the case and to refer to this court for determination the questions set out in the prayers of the petitions. the assessment years to which the petitions relate are the assessment years 1970-71, 1973-74, 1974-75 and 1975-76. although the prayers in the petitions are for directing the tribunal to refer several question to this court for determination, before the sales tax tribunal the applications were only for referring to this court for determination of one question, and that question is as follows :'whether, on the facts and circumstances of.....
Judgment:

Kania, J.

1. These are four petition under section 21(2) of the Bombay Sales of Motor Spirit Taxation Act, 1958 (referred to hereinafter as 'the Motor Spirit Taxation Act'), for directing the Sales Tax Tribunal to forward to this Court statements of the case and to refer to this Court for determination the questions set out in the prayers of the petitions. The assessment years to which the petitions relate are the assessment years 1970-71, 1973-74, 1974-75 and 1975-76. Although the prayers in the petitions are for directing the Tribunal to refer several question to this Court for determination, before the Sales Tax Tribunal the applications were only for referring to this Court for determination of one question, and that question is as follows :

'Whether, on the facts and circumstances of the case, the department of sales tax ought to have made an order for refund on admitted shortage of sale of motor spirit and, if so, the applicant is entitled to the said refund from the opponent ?'

2. We may make it clear that we directed rule nisi to issue merely because Mr. Sequeira appeared in person on behalf of the petitioner-company and we found that, even after taking up some time, he was unable to show us the relevant provisions of law on which the claim of the petitioner was based. We have now seen the relevant provisions of law with the assistance of Mr. Jetly, the learned counsel appearing for the respondent. We have also heard Mr. Sequeira at some length to leave no scope for any grievance that being a party-in-person, he was unable to explain his case properly. We had made it clear earlier to Mr. Sequeira that if he desired to have any legal assistance, we could request some lawyer conversant with sales tax law to appear amicus curiae and present the petitioner's case. Mr. Sequeira, however, made it clear that he wanted to argue the petitions himself.

3. We find that there is no substance in the petitions. We may state very briefly the relevant facts necessary to appreciate the dispute before us. During the aforesaid assessment years, the petitioner-company ran a petrol pump at Sprott Road, Ballard Estate, Bombay. The petitioner-company purchase motor spirit during these years from Caltex (India) Ltd. According to the petitioner-company, Caltex (India) Ltd. used to collect tax which was payable on the sale of such motor spirit by Caltex (India) Ltd. from the petitioner-company along with the cost of petrol supplied to the petitioner-company and Clatex (India) Ltd. paid to the Government of Maharashtra the tax payable under the Motor Spirit Taxation Act on the sale of motor spirit by Caltex (India) Ltd. to the petitioner. The petitioner filed returns as prescribed under the Bombay Sales of Motor Spirit Taxation Rules, 1958, in respect of the aforesaid assessment years. The returns were accepted, and it was held that no tax was liable to be paid under the said Act by the petitioner-company in the aforesaid assessment years. The Motor Spirit Taxation Officer also accepted the quantity of shortages shown in the returns by the petitioner-company. However, no direction was given by the Taxation Officer for the grant of any refund to the petitioner-company as sought for by the petitioner-company. It may be mentioned here that the case of the petitioner is that the motor spirit purchased by the petitioner from Caltex (India) Ltd. was stored by the petitioner in the petitioner's storage tanks. Before that motor spirit could be sold to retail consumers, a certain amount of motor spirit was lost on account of leakages and evaporation. What the petitioner-company wanted was that out of the amount collected on account of tax by Caltex (India) Ltd. from the petitioner and paid to the Government, the Government should grant to the petitioner a refund of a proportionate amount of tax calculated on the amount of motor spirit lost on account of evaporation and leakages when it was stored in the tanks of the petitioner. The petitioner filed appeals against the order of the Motor Spirit Taxation Officer rejecting the claims for refund to the Assistant Collector, Motor Spirit Sales Tax. The said appeals were dismissed. The petitioner then preferred revisional applications to the Additional Collector of Motor Spirit Sales Tax-cum-Deputy Commissioner of Sales Tax. These revisional applications were dismissed and the petitioner then approached the Sales Tax Tribunal by way of four revision applications. The Tribunal also rejected these revision applications and the aforestated question is sought to be raised now is in order to test the decision of the Tribunal. We find that the only relevant provision relating to refund of tax paid under the Motor Spirit Taxation Act is contained in rule 15 of the Motor Spirit Taxation Rules. The relevant portion of the said rule runs as follows :

'15. Liability of trader to pay tax. - (1) ..........

(2) ...........

(3) Where any motor spirit purchased by any trader has been stored in the storage installation belonging to a trader who sells it, the quantity of motor spirit lost on account of leakage or evaporation shall be deducted from the total sales on which the tax is payable, if a refund in respect of such quantity is allowed by the trader who has sold such motor spirit.'

In our view, for the purposes of this rule, Caltex (India) Ltd. must be regarded as a trader who has sold goods in question and the petitioner must be regarded as a purchaser. The rule comes into play only where the purchasing trader has stored the motor spirit purchased by him from the selling trader in a storage installation belonging to the selling trader and loss on account of evaporation or leakages take place while the motor spirit is stored in the installation of the selling trader. In the present case, the loss or evaporation has taken place when the motor spirit was stored in the tanks of the purchasing dealer, and hence the provisions of sub-rule (3) of rule 15 do not come into play. Apart from this, to sustain a claim for refund under this rule, it is required that it must be established that refund was granted by the selling trader to the purchasing trader in respect of quantity of motor spirit lost on account of evaporation or leakage. This has also not been established in the present case. In these circumstances, the Tribunal was clearly right in the view which it took and we see no reason why further time should be wasted by directing it to make statements of the cases and refer the aforesaid question to us for determination.

4. We may mention that Mr. Sequeira stated to us later that Caltex (India) Ltd. had not paid to the Government the entire amount collected by it from the petitioner on account of tax payable under the Motor Spirit Taxation Act. If that is so, and the petitioner has any grievance against Caltex (India) Ltd., the petitioner may adopt appropriate proceedings to get relief from Caltex (India) Ltd. in respect of that grievance. We are not concerned with that grievance in these petitions. Moreover, there is no material on record to show this. Mr. Sequeira made one further grievance that the the Government was not supplying to the petitioner the information which it wanted regarding the tax paid by Caltex (India) Ltd. to the Government under the Motor Spirit Taxation Act in respect of the aforesaid assessment years. We are sure that if the Government has any such information available and is in a position to supply it to the petitioner, the Government will do so. We are, however, not concerned with that question either.

5. In the result, the petitions are dismissed and rule discharged in all the cases. Looking to the fact that the petitioner-company has appeared through one of the Directors and not a lawyer and all other facts and circumstances, there will be no order as to costs.


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