1. These are revision petitions by the Department under Section 15-B (1) of the General sales Tax Act, 1125, read with Section 9(3) of the Central Sales Tax Act, 1956. They relate to assessments under the Central Sales Tax Act, 1956. The period concerned in T. R. C. Nos. 7, 8 and 10 of 1961 is the financial year 1957-58, and the period concerned in T. R. C. Nos. 9 and 11 of 1961 is the period from 1-4-1958 to 1-10-1958.
2. The sales concerned were of copra and coir. Of these, copra is item No. 37 of the notification issued by the State under Sec, 5 (vii) of the General Sales Tax Act, 1125, and coir (including coir products) is item No. 38 of the said notification. The taxable point under the notification in respect of both the items is the last purchase in the State by a dealer who is not exempt from taxation under Section 3(3) of the Act.
3. The Appellate Tribunal held that the sales of the respondents cannot be taxed under the Central Sales Tax Act, 1956. It said:
'In the instant cases all the commodities are taxed on the purchase point i.e., under the State law the sales of these commodities cannot be taxed. Therefore the sales of such commodities, corning within the ambit of Sub-section (2) of Section 8, cannot be taxed.'
It is the correctness of this decision that is challenged before us.
4. Sub-section (2) of Section 8 of the Central Sales Tax Act, 1956, as it stood prior to the amendment effected by Central Act, 31 of 1958, read as follows:
'The tax payable by any dealer in any case not falling within Sub-section (1) in respect of the sale by him of any goods in the course of Inter-State trade or commerce shall be calculated at the same rates and in the same manner, as would have been done if the sale had, in fact, taken place inside the appropriate State and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law.'
It is common ground that Sub-section (1) of Section 8 is not attracted and that the controversy has to be resolved solely on the basis of Sub-section (2) of Section 8 as extracted above.
5. We entertain no doubt that the wording of Sub-section (2) of Section 8 justifies the conclusion reached by the Tribunal. What the Sub-section directs is to treat the inter-State sales as intra-State sales and assess them on the basis of theState enactment. It follows that if there is no liability under the State enactment, there can be no liability under the Central Act either.
6. The entire basis for the submission on ehalf of the Department is the latter portion of Sub-section (2) of Section 8 which says:
'and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he in fact may not be so liable under that law''. To say that this portion of Sub-section (2) makes a transaction liable to tax under the Central Act even if it is not liable to tax under the State Act will amount to saying that the second part of of the Sub-section annihilates the first, a calamity which no legislature could possibly have intended for its progeny.
7. 'Any such dealer' in Sub-section (2) of section 8 must mean a dealer as defined in Section 2(b) of the Central Sales Tax Act, 1956, that is, any person who carries on the business of selling goods inclusive of a Government which carries On such business. A person coming within this definition of the Central Act need not necessarily be a dealer as defined in the Sales Tax Act of a State. And even if he is a dealer under both the enactments, he may be liable to taxation under the Central Act and not liable to taxation under the State enactment.
8. For example, the General Sales Tax Act, 1125, provides a minimum turnover for the liability to taxation. A similar immunity from taxation for dealers with a turnover below a prescribed figure does not obtain in the Central Sales Tax Act, 1956.
9. This, and this alone, must be the reason for saying that the inter-State dealer in cases covered by Sub-section (2) shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State 'notwithstanding that he in fact, may not be so liable under that law'. In other words the injunctions of Sub-section (2) can be summarised as follows:
(1) Treat the inter-State transaction as an intra-State transaction;
(2) Tax it as it would be taxed under the State Act, that is: if there is a tax under the State Act, impose it; if there is none, desist from doing so; and
(3) Ignore the fact -- if such is the case --that the dealer concerned is not liable under the State Act for the purpose of carrying out injunction NO. (2).
10. In the light of what is stated above these Tax Revision Cases have to be dismissed and we do so. The Department will pay the costs of the respondents.