COMMISSIONER OF SALES TAX Vs. RAMDAS LAXMIDAS

JUDGEMENT

(1.) This is a Reference under section 23(1) of the Bombay Sales Tax Act, 1946, made at the instance of the Commissioner of Sales Tax in which the question referred to us is : "Whether the Tribunal was correct in law in holding that in view of Rule 41-A of the Bombay Sales Tax Rules, 1946, the lower authorities were not justified in demanding the production of declarations as required under Rule 26(2) of the Bombay Sales Tax Rules, 1946, after a lapse of three years from 31-3-1950 and that as such the respondents' claim under section 6(3) Rule I(ii) for the period from, 1-4-1948 to 31-3-1950 must be accepted ?"

(2.) The Respondents were registered as a dealer under the Bombay Sales Tax Act, 1946. It is not disputed that for the period April 1, 1948 to October 31, 1952 they duly and regularly filed their returns. They first received a notice on December 12, 1953 calling upon them to attend before the Sales Tax Officer in respect of their assessment for the said period. The order of assessment, which was one composite order in respect of the entire period, was made on April 27, 1954.

(3.) Both in their return and in the course of the assessment proceedings the respondents had claimed to deduct the turnover of certain sales from their gross turnover of sales. Some of the deductions so claimed were allowed by the Sales Tax Officer, while others were rejected. The only deductions with which we are concerned in this Reference are the deductions under Rule I (ii)(a) of sub-section (3) of section 6 of the said Act. Under the said Rule I(ii)(a) a dealer is entitled to a deduction from his gross turnover in respect of all his sale or supplies of good in respect of the period in question his turnover of all sales or supplies made during the said period to a registered dealer holding licence under section 8B of goods certified by him as being intended for resale or for use as containers and other materials for the packing of goods to be sold or supplied by him. Rule 26(2) of the Bombay Sales Tax Rules, 1946, required that a dealer who wished to claim a deduction from his gross turnover under clause (i) of Rule I of sub-section (3) of section 6 "shall, on demand, produce in respect to the sale for which the deduction is claimed the copy of counterfoil of the relevant cash receipt, bill or invoice, if any, and a certificate in writing by the purchasing dealer or by a responsible person duly authorised by the purchasing dealer in this behalf, that the goods in question are required by such dealer either for resale, or for use in the manufacture of goods for, sale, or for the packing of such goods." Sub-rule (3) of Rule 26 prescribes the form of certificate to be given by a purchasing dealer under sub-rule (2) of the said Rule 26. Sub-section (3) of section 12A of the said Act provided as follows : "12A (3) Every registered dealer whose gross turnover exceeds Rs. 60,000/- a year shall issue a bill or cash memorandum signed and dated by him or his servant, manager or agent to the purchaser in respect of the goods solds or supplied by him showing the particulars of the goods and the price at which the goods are sold or supplied shall keep the duplicate of such bill or cash memorandum duly singed and dated and preserve it for a period of not less than two years from such date." Section 14(1) of the said Act casts an obligation interalia upon every registered dealer to keep a true account of the value of the goods bought and sold by him. Rule 14-A of the said Rules provided as follows : "... 41-A Accounts, etc, to be preserved for three years. Every registered dealer and a dealer on whom a notice has been served under sub-section (1) 10 of the Act shall preserve all books of accounts, registered and other documents including bills, cash memoranda, invoices, vouchers and other documents relating to the stocks, purchases, despatches and deliveries of goods for a period of three years after the expiry of the year to which they relate provided that the books of accounts, registers and other documents pertaining to the year ended 31st March 1947 shall be preserved until 30th September 1950."