1. This is a reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, by the Sales TaxTribunal (Board of Revenue) at the instance of the Commissioner of Sales Tax, Madhya Pradesh. The questions, which have been referred for decision, are-
'1. Whether an appeal against the order of the Commissioner of Sales Tax passed in revision Under Section 22 (5) of the C.P. & Berar Sales Tax Act, 1947, as extended to Vindhya Pradesh lies to the Board?
(2) Whether the present appeal was an appeal 'Under Section 39 (3) of the M. P. General Sales Tax Act and was within time?
(3) Whether the declarations which were not on form No. IX under the C. P. & Berar Sales Tax Act, 1947, as extended to Vindhya Pradesh, and in which the words 'use in the manufacture' were not scored out could be accepted as correct declarations if the purchasing dealers certified the purpose of resale subsequently?'
2. The assessee, M/s Caltex (India) Ltd., is a dealer in petrol and other petroleum products carrying on business at various places in India including Satna, which was in the material assessment year, namely. 1957-58, a part of the former Vindhya Pradesh State. During the assessment year, which was governed by the Central Provinces and Berar Sales Tax Act, 1947, as extended to Vindhya Pradesh (hereinafter referred to as the Act), the assessee claimed a deduction from its turnover of the sale transactions of the value of Rupees 14,12,045.15 being sales made by it to registered dealers. The deduction was claimed under Section 2(j) (a) (ii) of the Act which permitted the deduction of turnover of sales to a registered dealer of goods declared by him 'in a prescribed form as being intended for re-sale by him' from the aggregate turnover. The assessee filed declaration forms signed by the registered dealers to whom its products had been sold. The forms in which the declarations were made contained the words that the goods purchased from the assessee are 'for re-sale/for use in manufacture of goods for sale'. The words 'for use in manufacture of goods for sale' had been scored out in some forms. In other forms they had not been scored out. Before the Assistant Commissioner of Sales Tax, Rewa, who made the assessment, the assessee filed an application, along with certificates signed by the registered dealers, stating that they had purchased the goods for re-sale and in some forms they had forgotten to delete the words 'for use in manufacture of goods for sale' The assessing authority refused to allow the deduction stating that the declaration forms were not in the prescribed form and they were also defective inthat the words 'for use in the manufacture of goods for sale' had not been scored out, and that consequently it was not possibleto hold that the goods sold by the assesses to registered dealers were for re-sale; and that under Section 2 (j) (a) (ii) of the Act the deduction of turnover could not be allowed in respect of goods sold 'for use in manufacture of goods for sale.'
3. The assessee then preferred a revision petition before the Commissioner of Sales Tax, Madhya Pradesh. This was filed on 9th March 1959, that is, before the coming into force on 1st April 1959 of the M. P. General Sales Tax Act, 1958, Section 52 of which repealed inter alia the C.P. and Berar Sales Tax Act, 1947, as extended to Vindhya Pradesh. The Sales Tax Commissioner agreed with the view taken by the Assistant Commissioner and dismissed the revision petition preferred by the assessee. He, however, issued a notice to the assessee to show cause why the assessment should not be enhanced by taxing the sales o! light diesel oil at the rate of Re. -/1/- per rupee instead of at Re. -/-/6 per rupee adopted by the Assistant Commissioner. After hearing the assessee, the Commissioner enhanced the assessment taxing the sales of light diesel oil at the rate of Rupee -/1/- per rupee
4. The assessee then filed an appeal before the Sales Tax Tribunal against the decision of the Commissioner. The Tribunal overruled the objection of the Commissioner that the appeal preferred by the assessee was incompetent and that if it was tenable, it was barred by time. The Tribunal held that the declarations filed by the assessee should have been given effect to. It took the view that the omission to score out the words 'for use in manufacture of goods for sale' was through oversight and that if the declarations were not in the prescribed form, the Assistant Commissioner should have pointed out this fact to the assessee and drawn its attention to the fact that in some forms the words 'for use in the manufacture of goods for sale' had not been scored out. The Tribunal observed-
'In fact when such declarations were submitted the assessing authority should have asked the appellant (assessee) whether the declarations referred to sale or re-sale or to sale for use in manufacture of goods for sale. Without giving such opportunity to the appellant to explain the discrepancy in the declarations it was not proper for the assessing authority to reject them '
On this view, the Tribunal set aside the order of the assessing authority as also that of the Sales Tax Commissioner rejecting the declarations filed by the assessee, and thus its claim for deduction of turnover of sales to registered dealers.
5. The first question involves a consideration of Section 22 of the Act readwith rule 75 of the Vindhya Pradesh Sales Tax Rules, 1954. Section 22 (1) said that any dealer aggrieved by an order under the Act may, in the prescribed manner, appeal to the prescribed authority against the order. The word 'prescribed' was defined by Section 2 (e) of the Act. Rule 75 of the Vindhya Pradesh Sales Tax Rules, 1954, prescribed the appellate authorities. It ran thus-
'75. Appeals -- (1) An appeal against an original order of assessment with or without penalty passed by a Sales Tax Officer, or Assistant Sales Tax Officer under Section 11 or Section 11A shall lie to the Assistant Commissioner.
(2) An appeal against an original order of assessment with or without penalty passed by an Assistant Commissioner under Section 11 or 11A shall lie to the Commissioner.
(3) An appeal against any order under this Act other than assessment with or without penalty passed by a Sales Tax Officer, or Assistant Sales Tax Officer shall lie to the Assistant Commissioner. An appeal against a similar order passed by an Assistant Commissioner shall lie to the Commissioner.
(4) An appeal against an order passed by the Commissioner shall lie to the Board of Revenue, Vindhya Pradesh.'
It will be seen from the first three sub-rules that an appeal against an original order of assessment with or without penalty as also an order other than such an order of assessment, if passed by the Sales Tax Officer, lay to the Assistant Commissioner; and if the order was passed by the Assistant Commissioner, then the appeal lay to the Commissioner. The fourth sub-rule provided for an appeal, against an order passed by the Commissioner, to the Board of Revenue. As under Section 22 (4) every order passed in appeal under Section 22 was made final subject to the provisions of Sub-section (5), Sub-rule (4) cannot be taken as a sub-rule providing for an appeal against an appellate order passed by the Commissioner. Nor can it be taken as making a provision for an appeal against an original assessment passed by the Commissioner. This is obvious from the fact that the Commissioner's power to make an assessment had been delegated under Rule 93 to the Sales Tax Officer and the Assistant Commissioner. If, therefore, Sub-rule (4) of Rule 75 is to have any meaning and purpose, it must be construed as providing for an appeal against an order passed in revision by the Commissioner or an original order passed by him. An appeal, therefore, lay to the Board of Revenue against the order passed on 22nd April 1963 by the Commissioner in the revision preferred by the assessee. The order of the Commissioner In revision was no doubt passed after the M.P. General Sales TAX Act, 1958, came into force. Butthe right of appeal against that order conferred by Section 22 of the Act and Rule 75 (4) of the V.P. Sales Tax Rules, 1954, is preserved by the proviso to Section 52 (1) of the Act of 1958. In our opinion, an appeal lay to the Board of Revenue against the order passed by the Commissioner in revision under Section 22 (5) of the Act.
6. The Commissioner's order passed in revision was no doubt appealable to the Board of Revenue. But the appeal preferred by the assessee was really an appeal under Section 30 (3) of the M.P. General Sales Tax Act, 1958. The reason is that in the revision preferred by the assessee, the Commissioner made an order under Section 39 (2) enhancing the assessment. That, in enhancing the assessment the Commissioner acted under Section 39 (2) of the Act of 1958, becomes clear from the fact that in the revision petition, which came up before the Commissioner for disposal some four years after the coming into force of the 1958-Act, the Commissioner issued a notice to the assessee in Form XXVIII prescribed by Rule 60 of the M. P. General Sales Tax Rules, 1959, asking it to show cause why the assessment made against it should not be enhanced under Section 39 of the Act of 1958. The C.P. and Berar Sales Tax Act, 1947, as extended to Vindhya Pradesh, did not confer any power on the Commissioner to pass any order in revision against an assessee enhacing an assessment or penalty or both. Learned Government Advocate suggested that Section 22 (7) of the Act and Rule 80 of the V. P. Sales Tax Rules, 1954, indicated that the Commissioner could in revision enhance the assessment. We are unable to accept this contention. Sub-section (7) only laid down that before any order likely to affect any person adversely is passed under that section, he shall be given a reasonable opportunity of being heard. Rule 80 dealt with the issue of a notice to a person likely to be affected in Form XXXIII. That rule dispensed with the giving of a notice to the appellant or the applicant in a revision or a review petition. Section 22 no doubt conferred on the appellate authority the power to enhance an assessment. Sub-section (7) of Section 22 of the Act and Rule 80 if the V.P. Sales Tax Rules, 1954, therefore, only provide for a reasonable opportunity of hearing to the assessee whose assessment is intended to be enhanced in appeal or to any person likely to be affected by an order under Section 22 of the Act. When Section 22 itself does not expressly confer any power on the Commissioner to enhance an assessment in revision, it would not be legitimate to infer such a power from Sub-section (7) of Section 22 or Rule 80. Perhaps it was because the Act did not contain any provision for enhancement of an assessment in revision, that the Commissioner decided to resort to Section 39 (2) of the M.P. General Sales Tax Act, 1958. Now, Section 39(3) of the 1958-Act provides for an appeal to the Tribunal against an order passed by the Commissioner under Sub-section (2) enhancing the assessment within sixty days of the date on which the order is communicated to the assessee. Therefore, the appeal preferred by the assessee before the Board of Revenue was under Section 39 (3) of the 1958-Act and was thus within time. It must be remembered that the order, which the Commissioner passed in revision and against which the assessee preferred an appeal before the Board of Revenue, was a composite order dismissing the assessee's revision petition and enhancing the assessment. The assessee could not have very well filed two appeals before the Board of Revenue, one under Section 22 of the Act read with Rule 75 of the V.P. Sales Tax Rules, 1954, against that part of the order of the Commissioner by which its revision petition was dismissed, and another under Section 39 (3) of the M.P. General Sales Tax Act, 1958, against that part of the Commissioner's order by which the assessment was enhanced. In this view of the matter, the appeal preferred by the assessee before the Board of Revenue must be regarded as a composite appeal under Section 39 of the M.P. General Sales Tax Act. 1958, against the entire order of the Commissioner, and that appeal was clearly within time. This answers the second question.
7. Coming to the third question, the position is that under Section 2 (i) (a) (ii) sales of goods to a registered dealer are excluded from the 'turnover' if the registered dealer gives a declaration in the prescribed form that the goods were intended for re-sale by him. Sub-rule (2) of Rule 34 of the V.P. Sales Tax Rules. 1954, also prescribed that a dealer, who desires to deduct from his turnover any amount in respect of his sale on the ground that he is entitled to make such deduction under Section 2 (i) (a) (ii) of the Act, shall, besides the documents mentioned in the Sub-rule, produce a true declaration in writing by the purchasing dealer or his authorised agent Sub-rule (3) provided that the declaration shall be in Form IX to be obtained from the Commissioner on payment of price that may be determined by him from time to time Form IX is set out below-
'Form of Declaration
Issued to holder of Registration Certificate No. District Book No.Serial No. To
Certified that the goods..... ordered for in our purchase order No.....Dated, purchased from you per bill/cash memo stated below supplied under your chalan No. Date. . . .are for resale It is further certified that our sales tax Registration No. in District. . .. is.... Particulars of Bill/Cash memo Dated
No. Amount (Rs. As. Ps.)
(Name of the purchasing dealer in full)
Signature and status of the person signing the declaration.
strike out whichever is not applicable'
In the present case, what happened was that the purchasing dealers gave declarations on forms obviously not obtained from the Commissioner. It is not clear whether they did or did not made a request to the Commissioner for being supplied with the forms. Be that as it may, we are not concerned with the validity of the declarations given by the purchasing dealers on the ground that they were not on forms obtained from the Commissioner. The printed form, which the purchasing dealers used varied from the prescribed form IX only in one respect, namely, that it used after the words 'are for resale' the alternative expression 'for use in manufacture of goods for sale'. In some declaration forms, the alternative expression 'for use in manufacture of goods for sale' had been struck out; in others it was retained. Having regard to the fact that in some declaration forms the alternative expression had been scored out and in others it was retained and the purchasing dealers also gave a certificate that they had purchased the goods for resale and that in some forms they had forgotten to delete the words 'for use in manufacture of goods for sale', and regard being had also to the fact that there was no material to show that during the period of one year the purpose of purchase varied from time to time, the Tribunal reached the conclusion that the omission to strike out the words 'for use in manufacture of goods for sale' in some declaration forms was through inadvertence. If, as the Tribunal found as a fact, the retention of the aforesaid words was through inadvertence, then it must be taken that those words did not exist in the forms in which they had been retained, and the declaration forms, which were produced, were in conformity with the form prescribed under Rule 34 (3) of the V. P. Sales Tax Rules, 1954. It must be again stated that but for the use of the alternative expression 'for use in manufacture of goods for sale' the declaration forms filed were in conformity with the prescribed form.
8. Shri Adhikari, learned counsel appearing for the assessee, referred us to the observations of the Madras High Court in Deputy Commissioner of Commercial Taxes v. Manohar Brothers. 1962-13 STC 686 at pp. 691-92: (AIR 1962 Mad 410 at pp. 412-13) and of the Supreme Court in State of Madras v. Radio and Electricals Ltd., 1966-18 STC 222 at pp. 230-31: (AIR 1967 SC 234 at pp. 238-39). These cases are not in point. Those were cases which dealt with the question of levy of concessionalrate under Section 8(1) of the Central Sales Tax Act, 1956, and the Central Sales Tax (Registration and Turnover) Rules, 1957, on 'non-declared' goods when in the certificates in Form-C, the production of which was necessary for claiming the concessional rate, all the alternative purposes had been retained and had not been scored out so as to indicate the one purpose for which the goods were intended to be used. The concessional rate was under Section 8(1) of the Central Sales Tax Act, 1956, attracted if the purchaser intended the goods for any one or more of the specified purposes. It was in these circumstances that it was held by the Madras High Court as well as by the Supreme Court that the Act and the Rules 'do not impose an obligation on the purchasing dealer to declare that goods purchased by him are intended to be used for one purpose only even though under his certificate of registration he is entitled to purchase goods of the classes mentioned in Section 8(3)(b) for more purposes than one; and that when the purchasing dealer furnishes a certificate in Form-C without striking out any of the four alternatives, it is a representation that the goods purchased are intended to be used for all or any of the purposes and the certificate complies with the requirements of the Act and the Rules. In the case before us, the deduction of sales to registered dealers is not allowed if the purchasing dealer intends them 'for use in the manufacture of good? for sale'. The decisions cited by the learned counsel for the assessee are not, therefore, of any assistance. But on the view we have taken of the effect of the finding of fact reached by the Tribunal that the retention of the words 'for use in the manufacture of goods for sale' was through inadvertence, it must follow that those words did not exist in the declaration forms produced, and the forms were without those words as if they had been struck out if those words are ignored as if struck out from the form, then the forms, which were otherwise in conformity with Form TX, were valid so as to permit the assessee to deduct his turnover of sales to registered dealers from his total turnover.
9. For these reasons, we answer all thethree questions in the affirmative. The assessee shall have costs of this reference,Counsel's fee is fixed at Rs. 150/-