STATE TIMES NEWS
JAMMU: In a petition filed by National Cooperative Dairy Federation of India Ltd. and others seeking direction to State from not restraining trucks carrying UHT/Tetra Pack milk supplied to the army units under Northern Command in Jammu and Kashmir and also seeking direction to respondents from prohibiting from charging any VAT from the petitioners on the aforementioned consignments.
A Division Bench of State High Court comprising Justice Bansi Lal Bhat and Justice Janak Raj Kotwal after hearing Advocate Pranav Kohli for the petitioners whereas Advocate M.A Bhat appearing for the Finance Dept, observed that not to levy and collect tax on sale or purchase when such sale or purchase has taken place in the course of inter-state trade or commerce and not to take steps in this regard and not to create hurdles on that score is a constitutional obligation of a State Government and not a discretion or mere concession. The authorities of a State Government have to show due caution and sensitivity while dealing with the matter and not to act arbitrarily. Stand taken by the respondents that the petitioners are making the supplies on FOR basis has no substance in relation to their liability to pay VAT. Supply on FOR (Freight on Rail/Road) basis rather would show that the transportation/movement of the sold goods is a covenant of and pursuant to the contracts of the sale between the Army and petitioner Nos. 2 and 3 and the contracts shall not be said to have been executed until supply of goods at specified delivery points in the State of Jammu and Kashmir is made by the petitioners. Stand taken by the respondents, we may say, is without any basis and repugnant to constitutional scheme, therefore, Division Bench reject the stand taken by the respondents.
Division Bench would thus held that the sale/supply of the goods viz. Tetra Pack milk by the petitioner to Northern Command of the Indian Army in Jammu and Kashmir pursuant to aforementioned supply orders fulfills all the ingredients of a sale is in the course of inter-state trade and, therefore, is not liable to levy and collection of VAT under the Act on entry of the goods in the State of Jammu and Kashmir. We also hold that petitioners are not required to get registered as dealers under the Act for aforementioned sales. JNF
