JAI HIND PRINTING PRESS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE Gujarat Sales Tax Tribunal (hereinafter referred to as "the Tribunal") has referred the following questions of law for the opinion of this Court under section 69 (1) of the Gujarat Sales Tax Act, 1969 : " (1) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the applicant was estopped from contending that it was not a 'dealer' in respect of the sales of printing machinery worth Rs. 77,591 on account of the fact that it was registered as a dealer under the Gujarat Sales Tax Act, 1969, and/or on account of the applicant having purchased the disputed machinery by furnishing declarations in form C, in terms of section 8 (4) (a) of the Central Sales Tax Act, 1956 ? (2) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the applicant was a 'dealer' within the meaning of section 2 (10) of the Gujarat Sales Tax Act, 1969, in respect of the aforesaid sales of machinery ? (3) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that in any event the applicant was liable to pay tax on the aforesaid sale of machinery by virtue of the provisions contained in sub-section (6) of section 29 of the Gujarat Sales Tax Act, 1969 ?

(2.) THE assessee is a dealer registered under the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the local Act"), as also under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act" ). THE assessee runs a printing press in which the Ahmedabad edition of the Gujarati daily "jai Hind", which is published from Rajkot, is printed on job-work basis for and on behalf of the owners and publishers of the said newspaper.

(3.) THE Tribunal held, in the first place, that the assessee could not avoid the legal consequence of its own admission and representation made before the sales tax authorities under the local Act as well as under the Central Act, when it had approached them for registration as a dealer, and that it could not be allowed to blow hot and cold or to approbate and reprobate. Having considered some of the consequences including the benefits which flow from the registration, the Tribunal observed that the assessee wanted to enjoy the benefit as a dealer and its registration as a dealer but did not want to discharge its corresponding legal obligations arising under the law out of those every circumstances. THE Tribunal, in substance, held that the assessee was precluded from raising the contention that it was not a "dealer" or that it was wrongly registered as a dealer and that, therefore, it could not be permitted to contend that its activity did not constitute business. THE Tribunal however, still proceeded to consider on merits the question whether the assessee was, in fact, a "dealer" within the meaning of section 2 (10) of the local Act. In other words, the Tribunal examined on merits the contention of the assessee that its activity consisted of rendering "mere service" to the owners and publishers of the daily newspaper "jai Hind" and that it did not constitute "business" within the meaning of section 2 (4) of the local Act. On the said question, the Tribunal found that it was unable prima facie to accept the submission made on behalf of the assessee. THE Tribunal found that the assessee while doing the the business of printing newspaper would be required to purchase printing ink, types, printing machinery, etc. , all of which were indispensable for the purpose of carrying on its activity of printing the newspaper. According to the Tribunal, the assessee had purchased the disputed machinery with the intention of using it in the manufacture or processing of the newspaper for sale. THE purchase of the machinery, therefore, was an integral part of the assessee's business and the assessee was prima facie liable to pay sales tax on the sale of such machinery. Having recorded the above finding on the prima facie view of the matter, the Tribunal proceeded to make the following further observations : " 29. But we do not propose to go into those cases or to decide in this case the meaning or scope of the expression 'mere service' or the phrase 'in the nature of mere service' which the legislature has used in section 2 (4) of the local Act while defining the term 'business'. We say so because any such discussion or decision would merely be of an academic character so far as the facts and circumstances of this case are concerned as above-noted. In our view, even if we assume for the sake of argument that as a matter of fact, the appellant was rendering 'mere service' as alleged on its behalf, that would not help the appellant out of the disputed tax liability in the present case. That is because, as we have already stated earlier, the appellant had not disputed before us the fact recorded by the learned Assistant Commissioner in his order that the appellant was a 'dealer' registered under the provisions of the local Act as well as under the provisions of the Central Act. If that is so, and the learned chartered accountant for the appellant had not controverted that fact before us, we are of the opinion that the appellant would be hit by the provisions of sub-section (6) of section 29 of the local Act. THE substance of the sub-section is that if any person has been registered a as dealer upon an application made by him and if thereafter, it was found that he ought not to have been registered either because he is not a dealer or because he is not liable to pay tax, he shall be liable to pay tax on his sales or purchases made during the period commencing on the date on which has registration certificate took effect and ending with its cancellation, notwithstanding that he may not be liable to pay tax under the provisions of this Act. 30. THErefore, even if the appellant was not a 'dealer' within the meaning of section 2 (10) of the local Act or was not doing 'business' within the meaning of section 2 (4), as was strenuously urged on behalf of the appellant before us, the undisputed facts remain that the appellant had got itself registered as a dealer under section 29 of the local Act and therefore the appellant is bound to face the legal consequences of its own acts or representations as above made, while it sought to register itself as a dealer according to law. THErefore, we find that the appellant is now estopped from pleading that it was not a dealer or that it was not liable to tax on the disputed sale of machinery, which sale was admittedly made during the continuance of the appellant's registration certificate. As a matter of fact, even till today the appellant's registration certificate continues to be effective and was not cancelled as admitted by the learned chartered accountant on behalf of the appellant before us. "