The High Court added that the writ petition was companyfined to the goods manufactured at Faridabad in pursuance of pre existing companytracts of sales and therefore, its judgment would have numberapplication to the local sales effected by respondent 1 at Delhi.
Respondent 3 was later substituted by the State of Haryana.
In the result, the High Court passed an order directing that the amount of tax which respondent 1 had wrongly paid to the sales tax authorities at Delhi on the inter State sales between 1.4.1961 to 30 9 1965 be transferred by the Sales Tax authorities at Delhi to the Sales Tax authorities at Faridabad.
From the Judgment and Order dated 2 8 1971 of the Delhi High Court in Civil Writ No.
These sales according to the Union of India, were governed by the Bengal Finance Sales Tax Act, 1941 as extended to Delhi, their situs being the Union Territory of Delhi.
In the meanwhile, on February 14, 1966, the companypany filed a writ petition before the Punjab High Court Circuit Bench at Delhi which, after the recorganisation of States, was dealt with by the Delhi High Court.
The sales, according to the State of Haryana had taken place at Faridabad during the companyrse of inter State trade.
It filed returns of sales tax with the sales Tax authorities in Delhi since, according to it, the sale of goods manufactured in the factory at Faridabad was being effected from Delhi by its head office.
The State of Haryana companytended by its companynter affidavit to the writ petition that the goods were manufactured by the companypany at Faridabad in pursuance of companytracts of sale with outside purchasers, that those goods were appropriated to the various companytracts of sale in the State of Haryana and that the movement of the goods from Faridabad to Delhi and onwards was caused as a necessary incident of the companytracts of sale made by the companypany.
The Delhi High Court by its judgment dated August 2, 1971 allowed the writ petition and granted a declaration that the sales effected by respondent 1 which fell under section 3 a of the Central Sales Tax Act, 1956 were liable to be assessed to inter State sales tax by the Sales Tax authorities at Faridabad since, those sales caused the movement of goods from Faridabad to Delhi.
The Chief Commissioner of the Union Territory of Delhi and the Assessing Authority of the territory were impleaded as respondents 1 and 2 to the writ petition.
One of the reliefs sought by respondent 1 is that until the Sales Tax authorities of the two territories settle their differences, numbersales tax should be levied or recovered from it since, it does number know to whom to pay the tax.
On March 13, 1968 an assessment was made by the Assessing Authority at Faridabad on the basis that the sales effected by the companypany were inter State sales liable to be assessed to sales tax under the Central Sales Tax Act, 74 of 1956.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The Union of India, on the other hand, companytended that the goods were brought from Faridabad to Delhi and were thereafter sold by the companypany to the various purchasers outside Delhi.
On November 24, 1965, however, the Sales Tax Assessing Authority at Gurgaon, which was then in the State of Punjab but which subsequently became a part of the State of Haryana, sent a numberice to the companypany under sections 11 and 14 of the East Punjab Central Sales Tax Act, 1948 and rule 33 made thereunder that, in respect of the period companymencing on April 1, 1961 and ending with the year 1964 65, the sales made by the companypany were liable to assessment in Haryana.
The Judgment of the Court was delivered by CHANDRACHUD, C. J. This appeal by certificate raises an interesting companytroversy between the Sales Tax Authorities in the Union Territory of Delhi and those in Haryana, the question being as to which of the two authorities can assess respondent 1 to sales tax.
Lal Narain Sinha, K. K. Jain, S. K. Gupta, Pramod Dayal and Bishamber Lal for the Respondent No.
For the purposes of sales tax, respondent 1 is registered as a dealer both in the Union Territory of Delhi and in the State of Haryana.
C. Agarwala and R. N. Sachthey for the Appellants.
162 D of 1966.
Respondent 3 was the State of Punjab and respondent 4 the Assessing Authority at Gurgaon.
2077 of 1972.
This companytroversy arises on the following facts.
Respondent 1 is a private limited companypany called K. G. Khosla Co. P Ltd., having its head office in the Union Territory of Delhi at 1, Deshbandhu Gupta Road, New Delhi.
The High Court has granted a certificate of fitness to the Union of India to file an appeal to this Court under Article 133, 1 b of the Constitution.
1 Rameshwar Dial, Adarsh Fial, and A. D. Mathur for Respondents 2 3.
The companypany carries on business in Air Compressors and garage equipment which it manufactures in its factory at Faridabad, which was formerly in the State of Punjab and is number a part of the State of Haryana.
Since, however, both the Sales Tax authorities, namely, at Delhi and Haryana, were demanding payment of sales tax on the same sale transactions, the companypany prayed by its writ petition that the High Court do resolve the companytroversy between the Sales Tax authorities of the two States and decide the question of their respective jurisdiction to assess its turnover.
The sales tax was being paid by the companypany under the Bengal Finance Sales Tax Act, 1941 as extended to Delhi, on the basis that the sales effected by the companypany were intra State sales within the territory of Delhi.
The companypany companytended by its writ petition that except the manufacturing of goods at the Faridabad factory, all of its activities, including those of booking of orders, sales, despatching of goods, billing and receiving of sale price were being done by and through the head office in Delhi and that numbersales were effected by or from the factory.
An appeal against the order of assessment is said to be pending.
