MCC/27/2007 of SNOWCHEM INDIA LTD. Vs COMMISSIONER OF COMMISSIONER TAX on 1 February 2024

ORDER

The Tribunal has referred the following two questions to this Courtunder Section 44(1) of the General Sales Tax Act, 1958 (hereinafter referred toas 'the Act'), which reads as under :

"1. Whether on the facts and circumstances of the case, theTribunal was right in law, in relying on the decision of theHon'ble High Court of Madhya Pradesh in the case of M/sKrishna hardware Stores and that of the Hon'ble Tribunal inM/s Nanailal Brindabandas case to hold that 'Snowcem' is a paint and is taxable under entry No.20 of Part II of Schedule IIto the M.P. General Sales Tax Act, 1958 at the relevanttime?

2. Whether on the facts and circumstances of the case, theHon'ble Tribunal committed an error of law in applyingsection 19(7) of the Act to hold that the assessee had favouredthe buyer distributor despite any evidence or material onrecords to hold that the prices charged to distributor buyerwas abnormally low in comparison to the prices charged byother dealers similarly circumstanced ?"

2. So far as the first question is concerned, the same is answered by thejudgment of this Court in the matter of Sulemanju Gani Bhai Vs. CST, MPreported in 2006(8) STJ 650. Therefore, the first question is answered in termsof the aforesaid judgment of this Court.

3. So far as the second question is concerned, the same pertains to theerror committed in applying Section 19(7) of the Act. However, theGovernment Advocate submits that there may be a typographical error innarrating the same as Section 19(7). The appropriate section would be 18(7) ofthe M.P. General Sales Tax Act,1958 in view of the fact that Section 19(7) doesnot exist at all. Hence, the second question is partly modified by deleting 19 (7)and adding 18(7). Section 18(7) reads as follows :

"Section 18(7) - If the Commissioner is satisfied that adealer has, with a view evade payment of tax, effectedsales mostly to favour buyers at prices which areabnormally low in comparison to the prices charged byother dealers similarity circumstanced, theCommissioner may, after giving the dealer a reasonableopportunity of being heard, assess or reassess thedealer to the best of his judgement."

4. In terms whereof the satisfaction of the Commissioner is called for by passing an order thereon. Therefore, where subjective satisfaction is granted bythe Statute, the same in our considered view cannot constitute a question of

law. Whether the satisfaction arrived at by the Commissioner is just andappropriate, is not a question of law but a question of fact. We do not find thatany substantial question of law would arise in the consideration of the powersof Commissioner under section 18(7) of the Act. Therefore, we hold that thesecond question would not arise for consideration since it is a question of factand not law.

5. The reference is accordingly answered.

MK

(RAVI MALIMATH)

CHIEF JUSTICE

(VIJAY KUMAR SHUKLA)JUDGE