COMMISSIONER OF SALES TAX Vs. IMPHALBS MANUFACTURING CO

JUDGEMENT

(1.) AT the instance of the Commissioner of Sales Tax, M. P. , the Board of Revenue has referred for our decision the following questions:

(2.) THE answer to the second question depends on the answer of the first question. If the first question is decided against the assessee, the second question will have to be decided in the same manner.

(3.) THE facts of the case, in brief, are that the assessee carries on the business of manufacture and sale of water for injections as also some medicines. The assessee was registered under the M. P. General Sales Tax Act, 1958, and had also obtained registration certificate under Section 7 (2) of the Central Sales Tax Act. He was however not registered under Section 7 (1) of the said Act. The period of assessment is from 25th November, 1964, to 31st March, 1965, with regard to inter-State trade and commerce as the first sale in the inter-State trade was made by the assessee on 25th November, 1964. The assessee was assessed as an unregistered dealer under Section 18 (6) of the M. P. General Sales Tax Act, read with Section 9 (3) of the Central Sales Tax Act, and a penalty under Section 18 (6) of the local Act was also imposed. The turnover was determined at Rs. 25,884 and the tax was assessed at Rs. 1,103. 60 and the penalty of Rs. 1,000 was also imposed. This penalty was reduced, in appeal, to Rs. 500, and in other respects the order of the Sales Tax Officer was confirmed by the appellate authority. Before the Tribunal it was contended that as the assessee was registered under Section 7 (2) of the Central Sales Tax Act, he should also be deemed to be registered under Section 7 (1) of that Act and its assessment should not have been made as an unregistered dealer and the penalty should not also have been imposed. The Tribunal accepted the abovesaid contention of the assessee and set aside the penalty. On this question the Tribunal observed as under : A comparison of the provisions of the State and the Central sales tax law would show that whereas Section 7 ( 1) casts the duty to obtain a registration certificate by every dealer which is liable to pay tax under the Central Act, Section 7 (2) enables a dealer to obtain the registration certificate in anticipation of the liability to pay tax under the Central Act arises. Under the State law Section 15 requires every dealer whose turnover during the 12 months immediately preceding the commencement of the Act or during the 12 months immediately preceding the date on which it exceeds the limits specified in Sub-section (5) of Section 4 to apply for registration. Section 16 provides for voluntary registration. Thus both under the State and the Central law provision has been made to enable and to obtain voluntarily registration notwithstanding the fact that the liability to pay sales tax had not arisen. In the present case the appellant had obtained a registration certificate under Section 7 (2) of the Central Act, that in anticipation of its liability to pay sales tax under the Central law arises. In the circumstances it cannot be said that the appellant remained an unregistered dealer under the Central law. Therefore, the penalty imposed under Section 18 (6) of the Act read with Section 9 (3) of the Central Sales Tax Act is set aside.