C.M. Lodha, C.J.
1. This is an application under Section 15(3A) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as 'the Act'), for directing the Board of Revenue for Rajasthan to state a case and refer the questions of law arising out of its order dated 15th January, 1976, passed by it in special appeal No. 1180/STA/73/ Jaipur.
2. The assessment year is 1965-66, relevant period being 4th November, 1964, to 24th October, 1965. Respondent No. 1, Messrs. Radha Ballabh and Sons, Tripolia Bazar, Jaipur (hereinafter referred to as 'the assessee'), carries on business of buying and selling iron, electric goods, hardware, etc. and is registered under the Act. The petitioner, Commercial Taxes Officer, 'A' Circle, Jaipur (hereinafter referred to as 'the assessing authority'), assessed the petitioner (sic) on a taxable turnover of Rs. 18,18,883.08 and also imposed a penalty amounting to Rs. 500 under Section 16(l)(c). Penalty to the tune of Rs. 14,694.72 was also imposed under Section 16(l)(b). In addition to the penalty imposed under Section 16(l)(c) and 16(l)(b), a penalty of Rs. 5,840.32 was imposed under Section 16(1)(e). Aggrieved by the assessment order passed by the assessing authority, the assessee filed an appeal before the Deputy Commissioner (Appeals-I), Commercial Taxes, Jaipur, who partly allowed the same and set aside the penalty imposed under Section 16(l)(b) and also gave relief in respect of taxability of a turnover of Rs. 500 only. In all other respects the appeal was dismissed. Dissatisfied with the decision of the Deputy Commissioner, the assessee filed a revision application before the Board of Revenue for Rajasthan which was dismissed by a single member of the Board on 13th September, 1973. A copy of the order dated 13th September, 1973, has been placed on record and marked exhibit 3. Thereupon the assessee preferred a special appeal under Section 14(4A) of the Act before a Division Bench of the Board and the learned members of the Board by their judgment dated 15th January, 1976 (exhibit 4), allowed the special appeal and remanded the case to the assessing authority for reassessment in respect of certain points. Dissatisfied with the order by the Division Bench of the Board the assessing authority made an application under Section 15(1) of the Act requiring the Board to state a case and refer the following questions of law to this Court for decision :
(1) Whether, under the facts and circumstances of the case, the Board of Revenue was justified in deciding the point which was not raised in revision ?
(2) Whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that Circle 'A' in Jaipur City was not properly constituted before 20th October, 1967 and in setting aside penalties imposed under Section 16(l)(c) and (e) of the Rajasthan Sales Tax Act, 1954 ?
(3) Whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that the tax realised on the turnover of Rs. 1,66,277.21 of iron and steel be refunded to the assessee in spite of the fact that no S. T. 17 declarations were submitted by the dealer ?
(4) Whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that the contract to supply material and providing and fixing of electricity with the State Public Works Department was works contract involving no sales liable to tax ?
3. The Board, however, failed to dispose of the reference application within the prescribed period of 180 days and consequently it was precluded from passing any order on the reference application. In these circumstances, the assessing authority has moved this Court for requiring the Board to state a case and refer the question of law extracted above for decision to this Court.
4. We have heard Mr. J.S. Rastogi, the learned counsel for the assessing authority, as well as Mr. Ghiya, the learned counsel for the assessee and shall proceed to dispose of the application with respect to the questions ad seriatim.
5. With respect to question No. (1) the contention raised on behalf of the assessing authority is that the point regarding validity of imposition of penalty of Rs. 500 imposed under Section 16(l)(c) was not agitated before the learned single member of the Board and therefore, the Division Bench of the Board was not justified in dealing with this question in special appeal. We are, however, of the opinion that there is no bar against dealing with a question of law even if it has not been raised and/or dealt with by the lower authority. In the present case, the Division Bench of the Board has come to the conclusion that the tax was deposited by the assessee in time though the returns were filed slightly late. The Division Bench has further come to the conclusion that the default committed by the assessee was technical particularly keeping in view the fact that there was no validly created Circle 'A' in Jaipur City before 20th October, 1967. It is sufficient to point out that the Board has discretion in the matter and if in the facts and circumstances it exercised its discretion in favour of the assessee, no question of law can be said to arise in the matter. We are, therefore, of the opinion that question No. (1) does not arise out of the order of the Board.
6. Before coming to question No. (2) it would be proper to first take up questions Nos. (3) and (4). The question of imposition of penalty under Section 16(l)(c) and (e) would depend upon our decision with respect to questions Nos. (3) and (4). We shall, therefore, take up questions Nos. (3) and (4) first.
7. Question No. (3) has arisen on account of the fact that the assessee had not included the sale of iron and steel worth Rs. 1,66,277.21 in its turnover in the return filed by it. The assessee's case in this respect was that the amount of Rs. 1,66,277.21 represented the net amount of sales of iron and steel made by the assessee to another registered dealer, Vijailal Siyasaran, for accommodating the latter, who had supplied the goods to the Government. This turnover was no doubt not shown by the dealer in the return but was found out by the assessing authority in the assessee's account books. This amount was, however, included by the assessing authority in the taxable turnover and assessed to tax at 2 per cent. The department's case is that since the assessee had not submitted a declaration in form S.T. 17 as provided in Rule 25C of the Rajasthan Sales Tax Rules, 1955 (hereinafter referred to as 'the Rules'), the assessing authority was justified in including the same as the assessee's taxable turnover. The Division Bench of the Board, however, held that the liability to pay tax on iron and steel is at the last point in accordance with Rule 15 of the Rules. This position is not denied by the department also. The learned counsel for the department has, however, drawn our attention to the definition of the term 'taxable turnover' contained in Section 2(s) of the Act which reads as under :
2. (s) 'taxable turnover' means that part of turnover which remains after deducting therefrom the aggregate amount of the proceeds of sale of goods,-
(i) on which no tax is leviable under this Act,
(ii) which have already been subjected to tax under this Act,
(iii) which have been sold to persons outside the State for consumption outside the State and
(iv) which are taxable at a point of sale within the State subsequent to the sale by the dealer and such sale is covered by a declaration as may be required under any provision of this Act or the Rules made thereunder:
Provided that where a dealer in goods which are exempted from tax unconditionally, sells any bardana, container or any other packing material received along with such goods at the time of purchase thereof by him, the taxable turnover in respect of such sales shall, at the option of such dealer to be exercised in the prescribed manner, be one per cent of the aggregate amount of the sale prices received or receivable by him in respect of the sale or supply of such goods and of such bardana, container or material:
Provided further that when any dealer has purchased any goods without paying any tax on the strength of any declaration furnished by him and the said goods are used by him for any purpose other than the one mentioned in the declaration, the purchase price of goods shall be included in his taxable turnover.
8. It has been argued that in a case like the present the assessee is entitled to deduction on the amount of proceeds of sale of goods which are taxable at a point of sale within the State subsequent to the sale by the dealer only if such sale is covered by a declaration as required under the Act or the Rules and since no declaration was given by the assessee in the present case the amount in question must be included in the taxable turnover. On the other hand, Mr. Ghiya, the learned counsel for the assessee, has drawn our attention to the definition of the term 'turnover' contained in Section 2(t) of the Act with particular reference to explanation (iv) under it. We may state here that the Division Bench of the Board also placed reliance on this explanation. Turnover has been defined to mean the aggregate of the amount of sale prices received or receivable by a dealer in respect of the sale or supply of goods. Explanation (iv) further provides that where for accommodating a particular customer or a purchaser, a dealer obtains goods from another dealer and immediately disposes of the same to the said customer or purchaser, the sale in respect of such goods shall be included in the turnover of the latter dealer alone. The Board has come to the conclusion that explanation (iv) to Section 2(t) applies to the present case.
9. Now, the single member of the Board in para 5 of the judgment has come to the following conclusion:
Goods worth Rs. 1,66,277.21 were supplied by the dealer to Vijailal Siyasaran to accommodate the customer firm who supplied these goods to the Government.
10. The Division Bench of the Board held that iron and steel is taxable at the last point and in view of explanation (iv) to Section 2(t) of the Act the sale proceeds of the goods sold to Vijailal Siyasaran could not be included in the turnover of the assessee. It appears to us also that the sale in respect of such goods cannot be included in the turnover of the assessee by virtue of explanation (iv) to Section 2(t). It cannot be considered as taxable turnover of the assessee. This position seems to be admitting of no doubt on the facts found by the Division Bench of the Board. In this view of the matter, we are of the opinion that on the facts found by the Tribunal question No. (3) cannot be said to arise as a question of law and no useful purpose would be served by asking the Board to refer this question to us.
11. Question No. (4) pertains to supply of electrical goods and installing the same at the premises belonging to the Public Works Department, Government of Rajasthan. The assessee's case was that there was no separate sale of the electrical goods but the assessee had taken an indivisible contract for installing electric fittings and connections. In other words, the assessee's stand was that it was a works contract and not a sale at all. The assessing authority bifurcated the contract and came to the conclusion that the electrical goods had been sold by the assessee and consequently sales tax was attracted with respect to the cost of electrical goods supplied by the assessee. The Board has, however, found that the assessee had entered into an indivisible contract with the Public Works Department to supply material as well as installing the same and thus the contract was indivisible so that no separate sale could be spelled out from the contract. The question whether a particular transaction is a works contract or involves a sale depends on the facts and circumstances of each case. But the sine qua non for determining such a question is whether there was a sale of any goods by the contractor or there was an indivisible contract in which the assessee was to supply the goods as well as do the work also. In the present case the Board has observed as under:
We find that a cumulative contract was taken from the Public Works Department to supply material and providing and fixing electricity. The contract cannot be bifurcated.
12. Thus the finding of the Board in this respect is that the contract was indivisible.
13. Mr. J.S. Rastogi, the learned counsel for the assessing authority, also urged that there was no material on the record to show that it was an indivisible contract. We may, however, state that it is not the department's case nor any such objection has been raised in this application that the finding of the Board that it was an indivisible contract (which has been described by the Board as cumulative contract) was based on no evidence. In these circumstances we cannot go into the question whether this finding is based on no evidence. On the other hand it would be fair and reasonable to presume that the finding is based on evidence before the Board. Consequently in view of the finding by the Board that the contract cannot be bifurcated, there is no alternative left to us but to come to the conclusion that it was a works contract and not a sale. Question No. (4), therefore, also cannot be said to be a question of law arising out of the Board's order.
14. We may now turn to question No. (2). Admittedly the penalties under Section 16(l)(c) and (e) were imposed by the assessing authority on the ground that there had been concealment on the part of the assessee to disclose the turnover of Rs. 1,66,277.21 on account of sale of iron and steel and also on account of non-disclosure of the sale of electrical goods amounting to Rs. 14,075.20 which are the subject-matter of questions Nos. (3) and (4). But since we have held that the Board was justified in coming to the conclusion that there was no concealment or deliberate suppression on the part of the assessee there was no occasion for levying the penalties under Section 16(l)(c) and (e) of the Act and therefore, question No. (2) cannot be said to arise out of the Board's order.
15. The net result of the foregoing discussion is that we do not consider this case a fit one for requiring the Board to State a case and refer any question to this Court for decision. The application is dismissed but there will be no order as to costs.