Summary
Under s. 3(b), Central Sales Tax Act, 1956, a sale or purchase of goods is deemed to take place in the course of inter-State trade or commerce if the sale or purchase is effected by a transfer of documents of rifle to the goods during their movement from one State to another. Section 7(3 ) provides that on the application of the dealer the prescribed authority shall register the applicant and grant him a registration certificate which shall specify the class or classes of goods for the purpose of s. 8(1); and the Form prescribed by r. 3, Central Sales Tax (Registration and Turnover) Rules, 1957, for application for registration, requires the purposes for which the goods were purchased by the dealer to be specified, resale being one such purpose.
Section 8(1)(b) provides that every dealer who, in the course of inter-State trade or commerce sells to a regis- tered dealer other than the Government, goods of the de- scription referred to in sub-s. (3) shall be liable to pay 3.%_ of his turnover as.tax under the Act; whereas, under s.. 8(2), the tax payable with respect to goods which do not fall within sub-s.- (1) shall be, in the case of declared goods, at the rate applicable to to the sale or purchase of such goods inside the appropriate State and in the case of other goods 10%, or the rate applicable in the State, which- ever is higher. Prior to April 1, 1963, s. 8(3) stated, that the goods referred to in s. 8(1)(b), "(a) in the case of declared goods, are goods Of the class or classes speci- fied in the certificate of the registered dealer purchasing the goods as being intended for resale by him; and (b) in the case of goods other than declared goods are goods of the class or classes specified in the certificate of registra- tion of the registered dealer purchasing the goods, as being intended for resale by him." By the Amendment Act (8 of 1963), cl. (a) was omitted and the opening words in cl. (b),"in the case of goods other than declared goods" were also omitted; so that, after April 1, 1963, the goods referred to in s. 8(1)(b) are specified in sub-s. (3) as goods of the, class or classes specified in the certificate of registra- tion of the registered dealer purchasing the goods as being intended for resale by him. Section 8(4)(a) says that the provisions of s. 8(1) shall not apply to any sale in the course of inter-State. trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration in the prescribed.Form, duly filled and.signed by the registered dealer to whom the goods are sold containing the prescribed particu- lars. Section 9(1) contains a general rule that the tax payable by any dealer on sales effected in the course of inter-State trade or commerce would be levied by the Govern- ment of India and collected in the State from which the movement of the goods commenced. The proviso to the sub- section qualifies this rule in the case of a subsequent sale which is not exempted from tax under s. 6(2). and states, .that the tax on such subsequent sale would be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained, or could have Obtained, the Form prescribed for the purpose of s.8(4)(a). Coal is one of the declared goods having been declared under s. 14 to be of special importance in inter- State trade or commerce.The appellant was a Company carrying on business as coal agents and was registered in U.P. under the U.P. Sales Tax Act, 1948, and the Central Sales Tax Act. The appellant arranged for the supply of coal from collieries in W. Bengal and Bihar to consumers in U.P. The collieries sent the coal by4--1003 SCI/76 26rail, the railway receipts either in the name of the.appel- lant or in the name of the consumer in U.P., and sent the bills and invoices to the appellant's head office in Calcut- ta. The appellant forwarded the railway receipts to the consumers in cases where the receipts were in the names of the consumers, and in cases where the receipts were in the appellant's name also endorsed them in favour of the consum- ers. There was thus, in the latter cases, a subsequent sale of goods in the course of inter-State trade or commerce by the transfer of documents of title by the appellant to the consumers in U.P. For the assessment year 1966-67 the appellant claimed that the turnover in cases where the railway receipts had been subsequently endorsed in favour of the consumers in U.P. was not taxable in U.P. The Sales-tax Officer by order dated March 27, 1971, accepted the conten- tion, relying on a decision of the High Court. But, in subsequent decisions, the High Court held that in cases where a regisetred dealer effected a second sale in the course of inter State trade and commerce, sales tax on the turnover was to be realised in the State where the dealer effecting the sale was registered; and in one of the deci- sions it was observed that the decision on which the Sales- tax Officer relied had overlooked the proviso to s. 9(1 ) of the Central Act. The Sales-tax Officer accordingly proposed to rectify the error committed by him and after following the procedure prescribed for rectification of errors appar- ent on the face of the record in s. 22 of the U.P. Act, passed an order on March 26, 1974, rectifying the mistake and served it on the appellant on March 31, 1974. The appellant challenged the order unsuccessfully in the High Court.In appeal to this Court it was contended: (1) That the declaration prescribed under s.8(4)(a) is necessary when s. 8(1) was applicable, but that, after the omission in s. 8(3), reference to 'declared goods' is omitted in that section, so that when s. 8 (1)(b) refers to the sale of goods mentioned in s. 8(3) the reference is only to goods other than declared goods and hence, when a dealer sells declared goods, he could not have obtained the prescribed declaration and so the proviso to s.9(1) did not apply;(2) Section 22'of the U.P. Act was not ap- plicable as there was no mistake apparent on the face of the record; and (3) The order under s. 22 was barred by limi- tation, because it was effective only when it was served on the appellant.Dismissing the appeal to this Court,HELD: (1) The 1971-assessment order was wrong. [46 G]The Act and the rules and the prescribed Forms make no distinction between declared goods and other goods, except for the purpose of the rate of tax. Under s. 7(3) the regis- tration certificate granted to a dealer has to specify the class or classes of goods for the purposes of s. 8(1) and it makes no distinction between declared goods and other goods.Sub-sections 8(1) and (3) also show that all sales to a registered dealer other than the Government, whether of declared goods or other goods, are covered by s. 8(1).Clause (a) was omitted from s. 8(3) presumably because it was considered unnecessary to retain it when cl. (b) apparently covered all goods both declared and other than declared. The declaration referred to in s. 8(4)(a) is necessary for the dealer to avail himself of the benefit of the rate of tax mentioned in s. 8(1). There is no valid reason why the appellant could not have obtained the decla- ration in the prescribed Form as required by the proviso to s. 9(1 ). Since no .claim for exemption under s. 6(2) is made by the appellant, the first order of assessment was contrary to the proviso of s. 9(1) and the sales in question were taxable within the respondent-State, where the appel- lant was registered as a dealer. [45 D-H](2) The 1971-order of assessment was patently errone- ous in that it failed to take into consideration the proviso to s. 9(1). Therefore, it could be rectified under s. 22,U.P. Act. [46 G]27 (3) The order rectifying the mistake was recorded with in 3 years of the date of the original order as required by s. 22 of the U.P. Act. The fact that the order was communi- cated, to the appellant on March 31, 1974 could not make any difference. The order of rectification is deemed to be made on the date of communication only for the purpose of count- ing the period of limitation for filing the appeal, under s.9 of the U.P. Act. Therefore, in the instant case, the appellant was not affected by the order under s. 22 being communicated to it after the expiry not of 3 years from the date of the original order. [47 B; 48 B]Raja Harish Chandra Raj Singh v. The Deputy Land Acquisition Officer [1962]. 3 S.C.R. 676 and Madan Lal v. State of U.P. [1975] 3 S.C.C. 779 explained & distinguished.See the full content of this document
Extract
Karam Chand Thapar & Bros. (Coal Sales)limited VS. State Of .Uttar Pradesh And Another
PETITIONER: KARAM CHAND THAPAR & BROS. (COAL SALES)LIMITED Vs.RESPONDENT: STATE OF .UTTAR PRADESH AND ANOTHERDATE OF JUDGMENT21/07/1976BENCH: GUPTA, A.C.BENCH: GUPTA, A.C.SINGH, JASWANTCITATION: 1976 AIR 2101 1977 SCR (1) 25 1976 SCC (4) 257ACT: Central Sales Tax ,Act (74 of 1956), s. 9(1), proviso-Scope of.U.P. Sales Tax ,Act, 1948, S. 22---Order of rectifica- tion passed within 3 years of original order, but served beyond 3 years--If barred by limitation.JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 928 and 929 of 1975.(From the Judgment and Order dated 8-10-1974 of the Allahabad High Court in Civil Writ Nos. 2169 and 2276 of 1974).F.S. Nariman, D.N. Misra and O.C. Mathur, for the appellant.S.C. Manchanda and O.P. Rana, for the respondents.ARGUMENTSAPPELLANTS 1. Civil Appeal No. 928 of 1975.--In this Appeal three questions arise for determination: (i) Whether in the facts and circumstances of the case the proviso to s. 9(1) of the Central Sales Tax Act, 1956 was applicable so as to enable the State of Uttar Pradesh to levy and collect Central Sales Tax in respect of the subsequent sales of coal effected by the Appellants to consum- ers in the State of U.P. ?(ii) Whether the Sales Tax Officer, Moradabad had no jurisdiction to rectify the assessment for the year 1966-67 as there was no error apparent on the face of the record of the original assess- ment (s. 22 of the U.P. Sales Tax Act, 1948)?(iii) Whether the order of rectification passed under s. 22 of the U.P. Sales Tax Act on 26th March, 1974 (for the assessment year 1966-67) and communicated to the Appellants on 31st March, 1974 was barred by limitation as it could not be said to be "within. three years from the date of"the original assessment order dated the 27th March, 1971 ?II. Re: Whether in the facts and circumstances of the case the proviso to Section 9(1) of the Central Sales Tax Act, 1956 was applicable so as to enable the State of Uttar Pradesh to levy and collect Central 28Sales Tax in respect of the subsequent sates of coal ef- fected by the Appellants to consumers in the State of U.P. ?(a) The proviso to s. 9(1) of the Central Sales Tax Act, 1956 does not apply either :--- (i) to subsequent sales (in the course of inter-State trade or commerce) of declared goods--i.e. goods declared in s. 14 to be of spe- cial importance in inter-State trade or commerce;or (ii) to sale of goods to persons other than registered dealers;(b) The argument 'in support of the submission that the proviso to s. 9(1 ) does not apply to declared goods is as follows :-- Section 8(1) and 8(2) of the Central Sales Tax Act, 1956 deals separately with two types of goods, namely, (i) goods of the description referred to in sub-section(3) [see s. 8(1)(b) and (ii)] declared goods [see s. 8(2)(a)]. The rates of tax for the two types of goods have been and are differently prescribed in sub-s. (1) and sub-s. (2) of s.8---especially since the Amending Act VIII of 1963.The expression "good...
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