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Commissioner of Sales Tax Vs. Sajjan Mills Ltd. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberM.C.C. No. 90 of 1984
Judge
Reported in[1985]59STC116(MP)
AppellantCommissioner of Sales Tax
RespondentSajjan Mills Ltd.
Appellant AdvocateS.R. Joshi, Government Adv.
Respondent AdvocateA.K. Chitle, Adv.
Cases Referred and Commissioner of Sales Tax v. Bhopal SugarIndustries
Excerpt:
.....though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. - in second appeal to the tribunal it was held that the sale of secondhand car was an isolated sale which does not satisfy the test regarding volume,frequency and regularity of transactions which must be satisfied in order tohold that sale is in the course of business......namely, the board of revenue, m. p., has made this reference under section 44 of the m. p. general sales tax act, whereby it has referred the following question of law for the opinion of this court:whether on the facts and circumstances of the case, the tribunal was justified in holding that the sale of second hand car will not be covered by the term 'business' as defined in section 2(bb) of the m. p. general sales tax act, 1958. 2. the facts giving rise to this petition, as per the statement of factsfurnished by the tribunal may be stated, in brief, thus. the non-applicantassessee, m/s. sajjan mills ltd., ratlam, run a textile mill and are engaged inthe manufacture of cloth. for the year 1972-73 a sale of second hand car wasalso assessed to tax under the act. the assessment was.....
Judgment:

1. The Tribunal, namely, the Board of Revenue, M. P., has made this reference under Section 44 of the M. P. General Sales Tax Act, whereby it has referred the following question of law for the opinion of this Court:

Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the sale of second hand car will not be covered by the term 'business' as defined in Section 2(bb) of the M. P. General Sales Tax Act, 1958.

2. The facts giving rise to this petition, as per the statement of factsfurnished by the Tribunal may be stated, in brief, thus. The non-applicantassessee, M/s. Sajjan Mills Ltd., Ratlam, run a textile mill and are engaged inthe manufacture of cloth. For the year 1972-73 a sale of second hand car wasalso assessed to tax under the Act. The assessment was maintained in firstappeal. In second appeal to the Tribunal it was held that the sale of secondhand car was an isolated sale which does not satisfy the test regarding volume,frequency and regularity of transactions which must be satisfied in order tohold that sale is in the course of business. It is in these circumstances that thisreference has come up at the instance of the Revenue.

3. After hearing the learned counsel and after considering the definitionof 'business' as defined in Section 2(bb) of the M. P. General Sales Tax Act, 1958and after considering the case law in Commissioner of Sales Tax v. ProjectAutomobiles [1978] 42 STC 279 and Commissioner of Sales Tax v. Bhopal SugarIndustries, Sehore [1981] 48 STC 45 ; (1981) 14 VKN 134 we are of opinion thatthis reference has to be answered in favour of the department and against theassessee as both these authorities have considered and interpreted the definitionof 'business' as defined in Section 2(bb) of the M. P. General Sales Tax Act,1958 as amended by Act No. 16 of 1965 which has widened the definition of'business'. In view of these two Division Bench decisions of this Court, thelearned counsel for the assessee was unable to point out any contrary authority.

4. However, the learned counsel for the assessee submitted that in fact noreference was necessary as it is not found as a fact proved that the assessee iscarrying on the business of selling cars. He also submitted that no finding hasbeen recorded by the concerned authorities that the second hand car, which wassold by the assessee, was meant for office use. However, we see no merit in boththese contentions which are rejected summarily in view of the definition of'business' refered to above. In fact the burden lay upon the assessee to provefor what purpose the second hand car was purchased and to what use it was putto. In absence of any such evidence it has to be presumed that the second handcar was purchased for the use of the assessee.

5. In the result our answer to the question referred is that--

On the facts and circumstances of the case the Tribunal was not justified in holding, that the sale of second hand car will not be covered by the term 'business' as defined in Section 2(bb) of the M. P. General Sales Tax Act, 1958.

6. Thus the reference is answered in favour of the department and against the assessee with no order as to costs.


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