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Orient Paper Mills Ltd., Amlai Vs. the Commissioner of Sales Tax, Madhya Pradesh, Indore and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 386 of 1967
Judge
Reported inAIR1969MP53; 1968MPLJ395; [1969]23STC308(MP)
ActsCentral Sales Tax Act, 1956 - Sections 7(3), 7(4), 8(1), 8(3) and 8(4); Central Sales Tax (Registration and Turnover Rules, 1957 - Rule 5(1)
AppellantOrient Paper Mills Ltd., Amlai
RespondentThe Commissioner of Sales Tax, Madhya Pradesh, Indore and anr.
Appellant AdvocateY.S. Dharmadhikari, Adv.
Respondent AdvocateK.K. Dube, Govt. Adv.
DispositionPetition allowed
Excerpt:
- - on the other hand, sections 7(3) and 8(3) speak of the 'goods' to be specified in the certificate of registration as 'goods of the class or classes' for the purposes of section 8(1). the expression 'goods of the class or classes' clearly does not carry the implication of specification of the goods in the certificate of registration by the number of goods. the responsibility for the delay in allowing the amendment lies on the shoulders of the sales-tax authority for which clearly the dealer cannot be made to suffer......while allowing the amendment the commissioner of sales tax, however, put a restriction on the number of goods the petitioner could purchase after paying the concessional rate of sales-tax under section 8(1)(b) and directed the amendment of the registration certificate by insertion of the following entries:'diesel locomotives2cranes3forklifts6rly. line trollies14hand trollies25trucks10coal-loaders2trailors7tractors3'the commissioner of sales tax rejected the prayer of the petitioner that the amendment in the registration certificate should be made effective from the date, that is 10th september 1965, on which it submitted to the sales tax officer, shahdol, its application for amendment.2. the petitioner now seeks a writ of certiorari for quashing the order dated 18th may 1967 of the.....
Judgment:

Dixit, C.J.

1. The petitioner has been registered as a dealer under section 7 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act). In the certificate of registration issued to it, certain goods were specified under Sections 8(1)(b) and 8(3) of the Act On 10th September 1965 the petitioner-firm applied for amendment of the registration certificate so as to add thereto the following goods for purposes of sections 8(1)(b) and 8(3):

'Diesel locomotives, Motor vehicles, Cranes, Fork Lifts, Trollies and other equipments and vehicles, electrical bulbs and lighting fixtures'.

This prayer for amendment was allowed in part by the Sales Tax Officer, Shahdol, in regard to 'electrical bulbs and lighting fixtures for factory'. The amendment was, however, allowed in regard to other goods by the Commissioner of Sales Tax, Madhya Pradesh by his order dated 18th May 1967. While allowing the amendment the Commissioner of Sales Tax, however, put a restriction on the number of goods the petitioner could purchase after paying the concessional rate of sales-tax under Section 8(1)(b) and directed the amendment of the registration certificate by insertion of the following entries:

'Diesel Locomotives

2

Cranes

3

ForkLifts

6

Rly. line trollies

14

Hand Trollies

25

Trucks

10

Coal-loaders

2

Trailors

7

Tractors

3'

The Commissioner of Sales Tax rejected the prayer of the petitioner that the amendment in the registration certificate should be made effective from the date, that is 10th September 1965, on which it submitted to the Sales Tax Officer, Shahdol, its application for amendment.

2. The petitioner now seeks a writ of certiorari for quashing the order dated 18th May 1967 of the Commissioner in so far as it restricted the number of goods that the applicant could purchase and made the amendment in the registration certificate effective from the date of the order of the Commissioner, namely, 18th May 1967. The petitioner further prays that a direction be issued to the respondents to delete the restriction put on the number of goods the petitioner could purchase and make the amendment effective from 10th September 1965.

3. Having heard learned counsel for the parties we have reached the conclusion that this application must be granted. There is no provision in the Central Sales Tax Act or the Rules made thereunder giving to the authority issuing a certificate of registration power to restrict the number of goods that a dealer could purchase for the purposes of Section 8(1) of the Act. On the other hand, Sections 7(3) and 8(3) speak of the 'goods' to be specified in the certificate of registration as 'goods of the class or classes' for the purposes of Section 8(1). The expression 'goods of the class or classes' clearly does not carry the implication of specification of the goods in the certificate of registration by the number of goods. The Commissioner of Sales Tax imposed a restriction on the number of goods the petitioner could purchase for the purposes of Section 8(1) mainly persuaded by the reason that the certificate might be misused 'if the quantum of goods were not to be specified in the certificate of registration'. The possible misuse of the certificate can hardly afford any justification for putting a restriction on the number of goods the petitioner could purchase when there is no statutory provision empowering the authority granting the certificate to specify the goods in the certificate with reference to the number of goods that could be purchased. If a registered dealer misuses the certificate of registration granted to him, then the authority granting it has the power under Section 7(4) of the Act to cancel it. In our judgment the restriction put by the Commissioner of Sales Tax on the number of Diesel Locomotives, Cranes, Fork Lifts, Railway Line Trollies, Hand Trollies, Trucks, Coal-loaders. Trailers and Tractors that the petitioner could purchase after paying concessional rate of tax cannot be sustained.

4. In regard to the date of effectiveness of the amendment in the registration certificate, the Act or the Central Sales Tax (Registration and Turnover) Rules, 1957, do not contain any provision indicating the date from which any amendment in the certificate would be effective. The amendment can be effective either from the date on which it is made or from the date on which the purchasing dealer applies for amendment of the registration certificate. In our opinion, it would, however, be equitable and reasonable to hold that where the purchasing dealer applies for amendment of a registration certificate, it is the date on which he makes the application for amendment that should be taken as the date of effectiveness of the amendment if it is allowed. It is easy to see that considerable time may elapse between the making of an application for amendment of the registration certificate and the passing of the final order allowing the amendment. The responsibility for the delay in allowing the amendment lies on the shoulders of the sales-tax authority for which clearly the dealer cannot be made to suffer. Actually, in the present case, the petitioner made the application for amendment of the registration certificate on 10th September 1965; but it was not until 30th March 1966 that the Sales Tax Officer made an order allowing the amendment in part only in regard to electrical bulbs and lighting fixtures for factory. The order of the Commissioner was passed thereafter on 18th May 1967. Thus, there was an interval of nearly 20 months between the making of an application for amendment and the passing of the final order by the Commissioner allowing the amendment in respect of Diesel Locomotives, Cranes etc.

Some guidance on this point is available from the fact that Form B in which a certificate of registration is issued under Rule 5 (1) of the Central Sales Tax (Registration and Turnover) Rules, 1957, requires that the date from which the certificate is valid must be stated in the certificate. In the certificate the date of commencement of its validity has to be stated thus:

'This certificate is valid from ..... until cancelled.'

Such a requirement would not have been necessary if the effectiveness of the certificate were to commence from the date of its issue or the date of its amendment.

5. Learned Government Advocate submitted that the amendment in the registration certificate could not be as from a past date inasmuch as on the date of the purchase of the goods inserted by the amendment, the petitioner would not have been in a position to give a declaration under Section 8(4) of the Act as the goods had not been specified in the registration certificate on the date of the purchase. This is an argument in a circle. If the amendment of the registration certificate is made effective from the date of the application for amendment, then the goods in question would become specified in the registration certificate as from that date and then there would be no difficulty in giving a declaration under Section 8(4) of the Act.

6. For these reasons, this petition is allowed. The order dated 18th May 1967 of the Commissioner of Sales Tax is quashed in so far as it restricts the number of Diesel Locomotives. Cranes, Fork Lifts, Railway Line Trollies. Hand Trollies, Trucks, Coal-loaders, Trailers and Tractors which the petitioner can purchase after paying the concessional rate of tax and in so far as it makes the insertion of the above goods in the registration certificate effective from 18th May 1967. The Commissioner of Sales Tax is directed to delete from the registration certificate the restriction put on the number of aforestated goods which the petitioner can purchase and to make the amendment allowed in the certificate effective from the date of the petitioner's application for amendment,namely, 10th September 1965. The petitioner shall have costs of this application. Counsel's fee is fixed at Rs. 150/-.The outstanding amount of the securitydeposit shall be refunded to the petitioner.


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