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Camphor and Allied Products Ltd. Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberSales Tax Appeal No. 484 of 1978
Judge
Reported in[1979]44STC496(All)
AppellantCamphor and Allied Products Ltd.
RespondentCommissioner of Sales Tax
Appellant AdvocateR.K. Agrawal, Adv.
Respondent AdvocateStanding Counsel
DispositionAppeal allowed
Excerpt:
- .....oil, camphor oil, etc. it is registered as adealer under the u.p. sales tax act and under the central sales tax act. itsought the opinion of the commissioner of sales tax regarding the rate of taxpayable by it on these sales under the central sales tax act. the commissionerof sales tax has taken the view that only questions arising under the u.p.sales tax act can be referred and answered under section 35. thus, the onlyquestion in this appeal is as to whether an assessee can ask for the opinionof the commissioner as regards the appropriate rate of tax imposable under thecentral sales tax act. the answer to this question depends on theinterpretation to be put on section 9(2) of the central sales tax act. section 9(2) of the central act runs as under:9. (2) subject tothe other.....
Judgment:

C.S.P. Singh, J.

1. The point involved in this appeal is short. The assessee manufacturescamphor, distilled turpentine oil, camphor oil, etc. It is registered as adealer under the U.P. Sales Tax Act and under the Central Sales Tax Act. Itsought the opinion of the Commissioner of Sales Tax regarding the rate of taxpayable by it on these sales under the Central Sales Tax Act. The Commissionerof Sales Tax has taken the view that only questions arising under the U.P.Sales Tax Act can be referred and answered under Section 35. Thus, the onlyquestion in this appeal is as to whether an assessee can ask for the opinionof the Commissioner as regards the appropriate rate of tax imposable under theCentral Sales Tax Act. The answer to this question depends on theinterpretation to be put on Section 9(2) of the Central Sales Tax Act. Section 9(2) of the Central Act runs as under:

9. (2) Subject tothe other provisions of this Act and the Rules made thereunder, theauthorities for the time being empowered to assess, reassess, collect andenforce payment of any tax under the general sales tax law of the appropriateState shall, on behalf of the Government of India, assess, reassess, collectand enforce payment of tax, including any penalty, payable by a dealer underthis Act as if the tax or penalty payable by such a dealer under this Act is atax or penalty payable under the general sales tax law of the State; and forthis purpose they may exercise all or any of the powers they have under thegeneral sales tax law of the State; and the provisions of such law, includingprovisions relating to returns, provisional assessment, advance payment oftax, registration of the transferee of any business, imposition of the taxliability of a person carrying on business on the transferee of, or successorto, such business, transfer of liability of any firm or Hindu undivided familyto pay tax in the event of the dissolution of such firm or partition of suchfamily, recovery of tax from third parties, appeals, reviews, revisions,references, refunds, rebates, penalties, charging or payment of interest,compounding of offences, and treatment of documents furnished by a dealer asconfidential, shall apply accordingly:

Provided that if in any State orpart thereof there is no general sales tax law in force, the CentralGovernment may, by rules made in this behalf, make necessary provision for allor any of the matters specified in this sub-section.

2. Itwill be seen that the wordings of Section 9(2) are very wide. The intention ofthe Parliament was to make the machinery provided under the State Actavailable for making assessments under the Central Sales Tax Act. Counsel forthe assessee contended that the application moved by the assessee underSection 35 is in the nature of a reference to the Commissioner in which hisopinion is solicited in respect of matters set out under Section 35(2) of theAct.

3. Sri V. D. Singh, appearing on behalf of the department,however, contended that the reference referred to in Section 9(2) refers to areference made under Section 11 of the U.P. Act.

4. Section 9(2) doesnot in so many words describe what type of reference is contemplated by theSub-section. A reference specifically provided for under the State Act wouldobviously fall within the ambit of this provision. But, in view of theconsideration that the Parliament intended that the entire assessmentproceedings should be conducted in accordance with the State laws, it will notbe appropriate to take a restricted view of the word 'reference' as occurringin Section 9(2) in case the proceedings under Section 35 have the essentialcharacteristic of a reference. Proceedings under Section 35 start with anapplication by the assessee. The Commissioner of Sales Tax expresses hisopinion on the point referred. The decision does not affect the validity ofany order passed earlier by the assessing authority or the appellate orrevising authority It thus only declares the law. In a reference under theU.P. Act, the High Court expresses an advisory opinion, and declares the lawon the point. Effect to the opinion is given by the revising authority lateron. Thus, both in a proceeding under Section 35, and in a proceeding underSection 11 of the Act, the law on the point is declared, effect to which isgiven later on. It is undoubtedly true that in a reference answered by theHigh Court, the law declared operates also for that assessment year, but ifthe law declared is of a general nature, then it becomes binding on the salestax authorities for the other years also. Thus, in substance, a proceedingunder Section 35 is really a provision in the nature of a reference made bythe assessee to the Commissioner for his opinion on the questions envisaged bySection 35(2) of the Act. This being so, the Commissioner of Sales Tax wascompetent to decide the application on merits, and he erred in refusing toentertain it on the ground that the question related to liability under theCentral Sales Tax Act.

5. The appeal is accordingly allowed with costto the assessee, which is assessed at Rs. 200.


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