After getting an adverse order from the Board of Revenue and after the Board of Revenue rejected his application for a reference of a question of law to the High Court, the Commercial Taxes Officer, D Circle, Jaipur, moved the High Court of Rajasthan under Section 15 of the Rajasthan Sales Tax Act requesting the High Court to direct the Board of Revenue to submit the question whether on the facts and circumstances of the case the sales of companyton yarn and staple fibre yarn made to various dealers in Jaipur and other parts of Rajasthan by the respondent firm by endorsing the Railway Receipts in their favour, are taxable under Section 3 b read with Explanation I of the Central Sales Tax Act to the High Court for getting the opinion of the High Court.
Sale of yarn is exempted from payment of sales tax under the Slates sales tax law but liable to be taxed under the Central Sales Tax Act The Deputy Commissioner held that only those sales which were made to dealers outside Jaipur would be inter State sales and other sales would be intra State sales.
The modus adopted by the assessee is to endorse the Railway Receipts in favour of other dealers in yarn in Jaipur and in other parts of the state.
For their companysolidated returns, they wanted that numbersales tax should be levied in respect of the whole of the yarn brought into the State as according to them they were sales within the State of Rajasthan.
Aggrieved by that order, the assessee moved the Board of Revenue in seeking to get exemption in respect of all the sales effected by them.They import companyton yarn from the Madurai Mills.
