KHEMCHAND CHANDUMAL Vs. COLLECTOR OF SALES TAX ORISSA

JUDGEMENT

(1.) THIS is an application to revise the order of the Collector of Sales Tax, revising the order of the Assistant Collector in the matter of assessment of sales tax on the petitioner for the quarters ending 30th June, 1951, and 30th September, 1951. The points in issue for both the quarters are same. Therefore, this order is common to revisions 51 and 52 in this Court.

(2.) FOR the quarter ending 30th June, 1951, the dealer claimed a deduction of Rs. 68,807-11-6 from his gross turnover for sales alleged to have been made in the course of inter-State trade. Similarly, for the quarter ending 30th September, 1951, he claimed a deduction of Rs. 1,56,245-9-6. The facts elicited are that for the goods for which he claimed exemption he had bought the goods from another dealer in Orissa under a certificate of registration maintained by him, that he purchased the goods for resale. The learned Collector has found that the resale not being in Orissa, the dealer must be presumed to come under the mischief of proviso to item (ii) of sub-clause (a) of clause (2) of Section 5 of the Act which says that if the goods are used by the registered dealer for purposes other than those specified in the certificate of registration the price of goods so utilised shall be included in his taxable turnover. If the sale outside Orissa can be taken as contrary to the purpose specified in the certificate, then the dealer is liable for the tax, whatever be the nature of the actual transaction. The proviso imposes a penalty for defrauding the State of source of taxation at a previous stage by a false certificate. It is, therefore, a penalty that is levied, and not a tax, and Article 286 of the Constitution will not protect the petitioner if he has used the goods in a manner other than that specified in his certificate of registration.

(3.) THE transaction of sale being with a jute mill outside Orissa directly, this item of sale is covered by Article 286(1)(a) of the Constitution of India, and will be exempted. Petition allowed. The transactions under issue are allowable as rebate from the turnover for the periods ending 30th June, 1951, and 30th September, 1951. Assessment will be corrected accordingly. Petition allowed.