Case: The Commercial Taxes Officer, D Circle, Vs. Gordhandas Giddomal and Co

3. The material facts of the case are these : The assessee is a dealer in cotton yarn. They import cottonyarn from the Madurai Mills. 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 consolidated returns, they wanted that no sales 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. Sale of yarn is exempted from payment of sales tax under the States 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 out side Jaipur would bee sales and other sales would bee sales. Aggrieved by that order, the assessee moved the Board of Revenue in revision seeking to get exemption in respect of all sales effected by them. The Commissioner Taxes Officer filed an application challenging the correctness of the Deputy Commissioners order to the extent it went against him. The Board of Revenue accepted the contention of the assessee and held that the turnover relating to the sales in question is not liable to be taxed. Thereafter the Commercial Taxes Officer moved the Board of Revenue for referring the question mentioned earlier to the High Court for obtaining its opinion.

Court's reasoning:
2. From the order of the High Court it is clear that the High Court was not, satisfied about the interpretation of section 3(b) of the Central Sales Tax Act by the Board of Revenue but yet, surprisingly the High Court has summarily rejected the application of the Commercial Taxes Officer4. In our opinion the question of law, the appellant wanted the Tribunal to refer to the High Court did arise from the order of the Board of Revenue and the Board of Revenue was not justified in refusing to refer that question to High Court. We are also of the opinion that the High Court was not justified in rejecting the application of the appellant.