CHANDULAL AND COMPANY Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The applicants were at all material times registered as a dealer under the Bombay Sales Tax Act, 1959, and also held a licence under section 23 of the said Act. In their assessment for the period 1st April, 1966, to 31st March, 1967, the assessees claimed to deduct from their total turnover for the purposes of arriving at their taxable turnover for levy of general sales tax the turnover of two sales which they said they had made to one Messrs. H. Amrutlal and Company and in respect of which they had issued bill No. 3842 dated 23rd April, 1966, in the sum of Rs. 1,02,778 and another bill bearing No. 3843 dated 10th May, 1966, in the sum of Rs. 1,20,375, the person billed as shown in the said bills being the said Messrs. H. Amrutlal and Company. The above deductions were claimed by the assessees under clause (iii) of sub-section (1) of section 9 of the said Act on the ground that these were sales of goods made by them to a licensed dealer in respect of which the said licensed dealer, namely, Messrs. H. Amrutlal and Company, had given to the assessees the certificates in the prescribed manner in form No. 16.

(2.) It appears that the registration certificates issued and the licence granted to the said Messrs. H. Amrutlal and Company were cancelled by the Sales Tax Officer on 30th September, 1966, with effect from 10th November, 1965, on which date, according to the authorities, the said Messrs. H. Amrutlal and Company had discontinued their business.

(3.) In the assessment order, after referring to various facts which according to him showed that there were no genuine sales by the assessees to Messrs. H. Amrutlal and Company but the sales were to some other party in respect of which the said certificates were procured from the said Messrs. H. Amrutlal and Company in order to evade the incidence of general sales tax at the rate of 3 per cent in respect of the said transactions, the Sales Tax Officer disallowed the claim for deductions made by the assessees. In appeal these findings were confirmed by the Assistant Commissioner of Sales Tax. The applicants then went in second appeal to the Sales Tax Tribunal. It appears that elaborate arguments were addressed to the Tribunal at the hearing of this second appeal, and it was heard along with the second appeal filed by another dealer, Messrs. Girdharilal Aggarwal and Company. While the real point of controversy so far as the assessees before us was concerned was whether the sales which they claimed they had made to Messrs. H. Amrutlal and Company were in fact made to Messrs. H. Amrutlal and Company, the Tribunal held that since the registration certificates and licence of the said Messrs. H. Amrutlal and Company were cancelled with retrospective effect from a date prior to the dates of the two sales the applicants were not entitled to claim any deduction. At least so far as the second appeal filed by the applicants before us was concerned, this question did not fall for determination unless and until the Tribunal had first come to the conclusion that the sales were in fact made by the assessees to the said Messrs. H. Amrutlal and Company. The statement of the case made by the Tribunal does not at all refer to this part of the case. In fact, the question which has been referred to us by the Tribunal at the instance of the applicants does not bring out the real controversy between the parties. That question is as follows :