M/s. A &amp; G Projects &amp; Technologies Ltd Vs. State of Karnataka
the Department by invoking the proviso to Section 9(1) of the CST ACT 1956? The object of Section 9(1) is two-fold. Firstly, it provides that the tax on inter-State sales under Section 3(a) shall be levied by G.O.I. and collected by the State Government from which the movement of goods commenced. Secondly, it specifies the Appropriate State competent to levy tax on second and subsequent sales made during the movement of goods from one State to another as also the authority, where such second and subsequent sales are exigible to tax. As state above, Section 6(2) of the CST ACT 1956 provides for subsequent sales to be exempt from tax on the conditions prescribed therein. However, if and where those conditions are not satisfied, even such subsequent sales would attract tax and only in such circumstances the proviso to Section 9(1) which specifies the State, which is competent to levy the tax, would come in. [SEE: Jadhavjee Laljee v. State of Andhra Pradesh - (1989) 74 STC 201 (AP) at page 204]. The proviso to Section 9(1) contemplates two situations, namely, (a) where such subsequent sale is made by a registered dealer and (b) where such subsequent sale is made by unregistered dealer. In respect of situation (a), the proviso to Section 9(1) prescribes that the Appropriate State competent to levy tax on such subsequent sale shall be the State from which the registered dealer obtains a declaration in C-Form whereas in the case falling in situation (b), it provides that the Appropriate State competent to levy the tax shall be the State from which such subsequent sale has been effected. However, the entire proviso to Section 9(1) applies only to subsequent sales covered by Section 3(b) and not to sales under Section 3(a) CST Act 1956. 14. Applying the above analyses to the facts of the case, we are of the view that the proviso to Section 9(1) of the CST ACT 1956 is not applicable to the facts of the present case as the AO has categorically held that all the three sales fell under Section 3(a) of the CST ACT 1956. Once the said sales fall under Section 3(a) then under Section 9(1) the tax has got to be collected by the State of Tamil Nadu from which the movement of the goods commenced. The case of the appellant regarding subsequent sales effected during the movement of the goods stood specifically rejected both by the AO and the FAA and, therefore, the question of taxing such sales under the proviso to Section 9(1) of CST ACT 1956 did not arise. 15. Our above view is fortified by the judgment of this Court in the case of Bharat Heavy Electrical Ltd. and Others v. Union of India and Others - (1996) 4 SCC 230. We quote hereinbelow paras 17 and 18 of the said judgment which read as under: 17. The aforesaid survey of the relevant provisions of the Act clearly shows that Sections 3, 4, 5, 9(1), 14 and 15 pertain to and deal with distinct topics and different aspects of Articles 286 and 269. It follows that if a question arises whether a sale is an inter-State sale or not, it has to be answered with reference to and on the basis of Section 3 and Section 3 alone. Section 4, or for that matter Section 5, is not relevant on the said question -- see the Constitution Bench decision in TISCO v. S.R. Sarkar-(1960) 11 STC 655 and the decisions in Manganese Ore (India) Ltd. v. Regional Asstt. Commr. of Sales Tax - (1976) 4 SCC 124 and Union of India v. K.G. Khosla & Co. Ltd. - (1979) 2 SCC 242. Similarly, where the question arises, in which State is the tax leviable, one must look to and apply the test in Section 9(1); no other provision is relevant on this question. 18. We may, at this stage refer to the decision of the Bombay High Court in CST v. Barium Chemicals Ltd. - (1981) 48 STC 121. A particular transaction of inter-State sale was subjected to Central sales tax in Andhra Pradesh. The same sale was again sought to be taxed under Central Sales Tax Act in Maharashtra, which was questioned. The High Court adopted the following approach: Central sales tax is levied and collected by the Central Government; it is immaterial in which State it is collected; it cannot be levied or collected twice over; the State Governments are merely agents of the Central Government in the matter of levy and collection of Central sales tax; if so, once levied and collected in one State, rightly or wrongly, it cannot be levied and collected in another State. In our opinion, this may be an oversimplification of the matter. Maybe, from the point of view of the assessee, this approach is sound enough but from the point of view of the States (keeping Article 269 in mind) and the provisions of the Central Sales Tax Act, this may not be correct. Section 9(1) specifies the State wherein Central sales tax shall be levied and collected and the Central sales tax has to be levied and collected in that State and in no other State. The approach of the Bombay High Court makes Section 9(1) [which is enacted pursuant to Section 269(2), as pointed out hereinabove] otiose and superfluous. It would not be proper to say, in the light of the above constitutional and statutory provisions, that the dispute as to in which State a particular inter-State sale is to be taxed is a matter between the States and that so far as the assessee is concerned, it is enough if he pays the tax at one place, whether it is really leviable in that State as per Section 9(1) or not. The law requires that it should be levied and collected in the State from which the movement of goods commences [Section 9(1) read with Section 3(a)]. 16. For the aforestated reasons, we
1[ds]In the present case, according to the AO, the second and the third sales were not subsequent sales. According to the AO, all the three sales are inter-State sales falling under Section 3(a) and consequently Section 6(2) (which deals with the exemption) never stood attracted and, therefore, the appellant was not entitled to exemptionThe object of Section 9(1) is two-fold. Firstly, it provides that the tax on inter-State sales under Section 3(a) shall be levied by G.O.I. and collected by the State Government from which the movement of goods commenced. Secondly, it specifies the Appropriate State competent to levy tax on second and subsequent sales made during the movement of goods from one State to another as also the authority, where such second and subsequent sales are exigible to tax. As state above, Section 6(2) of the CST ACT 1956 provides for subsequent sales to be exempt from tax on the conditions prescribed therein. However, if and where those conditions are not satisfied, even such subsequent sales would attract tax and only in such circumstances the proviso to Section 9(1) which specifies the State, which is competent to levy the tax, would come in. [SEE: Jadhavjee Laljee v. State of Andhra Pradesh - (1989) 74 STC 201 (AP) at page 204]. The proviso to Section 9(1) contemplates two situations, namely, (a) where such subsequent sale is made by a registered dealer and (b) where such subsequent sale is made by unregistered dealer. In respect of situation (a), the proviso to Section 9(1) prescribes that the Appropriate State competent to levy tax on such subsequent sale shall be the State from which the registered dealer obtains a declaration in C-Form whereas in the case falling in situation (b), it provides that the Appropriate State competent to levy the tax shall be the State from which such subsequent sale has been effected. However, the entire proviso to Section 9(1) applies only to subsequent sales covered by Section 3(b) and not to sales under Section 3(a) CST Act 1956Applying the above analyses to the facts of the case, we are of the view that the proviso to Section 9(1) of the CST ACT 1956 is not applicable to the facts of the present case as the AO has categorically held that all the three sales fell under Section 3(a) of the CST ACT 1956Once the said sales fall under Section 3(a) then under Section 9(1) the tax has got to be collected by the State of Tamil Nadu from which the movement of the goods commenced. The case of the appellant regarding subsequent sales effected during the movement of the goods stood specifically rejected both by the AO and the FAA and, therefore, the question of taxing such sales under the proviso to Section 9(1) of CST ACT 1956 did not arise
### Instruction:
Judge the probable resolution of the case (approval (1) or disapproval (0)), and elaborate on this forecast by extracting and interpreting significant sentences from the proceeding.

### Input:
the Department by invoking the proviso to Section 9(1) of the CST ACT 1956? The object of Section 9(1) is two-fold. Firstly, it provides that the tax on inter-State sales under Section 3(a) shall be levied by G.O.I. and collected by the State Government from which the movement of goods commenced. Secondly, it specifies the Appropriate State competent to levy tax on second and subsequent sales made during the movement of goods from one State to another as also the authority, where such second and subsequent sales are exigible to tax. As state above, Section 6(2) of the CST ACT 1956 provides for subsequent sales to be exempt from tax on the conditions prescribed therein. However, if and where those conditions are not satisfied, even such subsequent sales would attract tax and only in such circumstances the proviso to Section 9(1) which specifies the State, which is competent to levy the tax, would come in. [SEE: Jadhavjee Laljee v. State of Andhra Pradesh - (1989) 74 STC 201 (AP) at page 204]. The proviso to Section 9(1) contemplates two situations, namely, (a) where such subsequent sale is made by a registered dealer and (b) where such subsequent sale is made by unregistered dealer. In respect of situation (a), the proviso to Section 9(1) prescribes that the Appropriate State competent to levy tax on such subsequent sale shall be the State from which the registered dealer obtains a declaration in C-Form whereas in the case falling in situation (b), it provides that the Appropriate State competent to levy the tax shall be the State from which such subsequent sale has been effected. However, the entire proviso to Section 9(1) applies only to subsequent sales covered by Section 3(b) and not to sales under Section 3(a) CST Act 1956. 14. Applying the above analyses to the facts of the case, we are of the view that the proviso to Section 9(1) of the CST ACT 1956 is not applicable to the facts of the present case as the AO has categorically held that all the three sales fell under Section 3(a) of the CST ACT 1956. Once the said sales fall under Section 3(a) then under Section 9(1) the tax has got to be collected by the State of Tamil Nadu from which the movement of the goods commenced. The case of the appellant regarding subsequent sales effected during the movement of the goods stood specifically rejected both by the AO and the FAA and, therefore, the question of taxing such sales under the proviso to Section 9(1) of CST ACT 1956 did not arise. 15. Our above view is fortified by the judgment of this Court in the case of Bharat Heavy Electrical Ltd. and Others v. Union of India and Others - (1996) 4 SCC 230. We quote hereinbelow paras 17 and 18 of the said judgment which read as under: 17. The aforesaid survey of the relevant provisions of the Act clearly shows that Sections 3, 4, 5, 9(1), 14 and 15 pertain to and deal with distinct topics and different aspects of Articles 286 and 269. It follows that if a question arises whether a sale is an inter-State sale or not, it has to be answered with reference to and on the basis of Section 3 and Section 3 alone. Section 4, or for that matter Section 5, is not relevant on the said question -- see the Constitution Bench decision in TISCO v. S.R. Sarkar-(1960) 11 STC 655 and the decisions in Manganese Ore (India) Ltd. v. Regional Asstt. Commr. of Sales Tax - (1976) 4 SCC 124 and Union of India v. K.G. Khosla & Co. Ltd. - (1979) 2 SCC 242. Similarly, where the question arises, in which State is the tax leviable, one must look to and apply the test in Section 9(1); no other provision is relevant on this question. 18. We may, at this stage refer to the decision of the Bombay High Court in CST v. Barium Chemicals Ltd. - (1981) 48 STC 121. A particular transaction of inter-State sale was subjected to Central sales tax in Andhra Pradesh. The same sale was again sought to be taxed under Central Sales Tax Act in Maharashtra, which was questioned. The High Court adopted the following approach: Central sales tax is levied and collected by the Central Government; it is immaterial in which State it is collected; it cannot be levied or collected twice over; the State Governments are merely agents of the Central Government in the matter of levy and collection of Central sales tax; if so, once levied and collected in one State, rightly or wrongly, it cannot be levied and collected in another State. In our opinion, this may be an oversimplification of the matter. Maybe, from the point of view of the assessee, this approach is sound enough but from the point of view of the States (keeping Article 269 in mind) and the provisions of the Central Sales Tax Act, this may not be correct. Section 9(1) specifies the State wherein Central sales tax shall be levied and collected and the Central sales tax has to be levied and collected in that State and in no other State. The approach of the Bombay High Court makes Section 9(1) [which is enacted pursuant to Section 269(2), as pointed out hereinabove] otiose and superfluous. It would not be proper to say, in the light of the above constitutional and statutory provisions, that the dispute as to in which State a particular inter-State sale is to be taxed is a matter between the States and that so far as the assessee is concerned, it is enough if he pays the tax at one place, whether it is really leviable in that State as per Section 9(1) or not. The law requires that it should be levied and collected in the State from which the movement of goods commences [Section 9(1) read with Section 3(a)]. 16. For the aforestated reasons, we

### Response:
1

### Explanation:
In the present case, according to the AO, the second and the third sales were not subsequent sales. According to the AO, all the three sales are inter-State sales falling under Section 3(a) and consequently Section 6(2) (which deals with the exemption) never stood attracted and, therefore, the appellant was not entitled to exemptionThe object of Section 9(1) is two-fold. Firstly, it provides that the tax on inter-State sales under Section 3(a) shall be levied by G.O.I. and collected by the State Government from which the movement of goods commenced. Secondly, it specifies the Appropriate State competent to levy tax on second and subsequent sales made during the movement of goods from one State to another as also the authority, where such second and subsequent sales are exigible to tax. As state above, Section 6(2) of the CST ACT 1956 provides for subsequent sales to be exempt from tax on the conditions prescribed therein. However, if and where those conditions are not satisfied, even such subsequent sales would attract tax and only in such circumstances the proviso to Section 9(1) which specifies the State, which is competent to levy the tax, would come in. [SEE: Jadhavjee Laljee v. State of Andhra Pradesh - (1989) 74 STC 201 (AP) at page 204]. The proviso to Section 9(1) contemplates two situations, namely, (a) where such subsequent sale is made by a registered dealer and (b) where such subsequent sale is made by unregistered dealer. In respect of situation (a), the proviso to Section 9(1) prescribes that the Appropriate State competent to levy tax on such subsequent sale shall be the State from which the registered dealer obtains a declaration in C-Form whereas in the case falling in situation (b), it provides that the Appropriate State competent to levy the tax shall be the State from which such subsequent sale has been effected. However, the entire proviso to Section 9(1) applies only to subsequent sales covered by Section 3(b) and not to sales under Section 3(a) CST Act 1956Applying the above analyses to the facts of the case, we are of the view that the proviso to Section 9(1) of the CST ACT 1956 is not applicable to the facts of the present case as the AO has categorically held that all the three sales fell under Section 3(a) of the CST ACT 1956Once the said sales fall under Section 3(a) then under Section 9(1) the tax has got to be collected by the State of Tamil Nadu from which the movement of the goods commenced. The case of the appellant regarding subsequent sales effected during the movement of the goods stood specifically rejected both by the AO and the FAA and, therefore, the question of taxing such sales under the proviso to Section 9(1) of CST ACT 1956 did not arise
