NOWRANGLAL AGARWALA Vs. STATE OF ORISSA

JUDGEMENT

(1.) THESE eight references were made by the Member, Sales Tax Tribunal, Orissa under Section 24 (1) of the Orissa Sales Tax Act, 1947.

(2.) THE petitioner assessee is a registered cloth dealer of Cuttack town. While submitting his taxable turnover for eight quarters ending 30-6-55, 30-9-55, 3112-1955, 31-3-1956, 30-6-1956, 30-9-1956, 31-12-56 and 31-3-1957, the assessee claimed certain sums as permissible deductions being sales to registered dealers of goods intended for resale in Orissa--See Section 5 (2) (A) (a) (ii) of the orissa Sales Tax Act. The Sales Tax Officer refused to allow such deductions holding that he entertained serious doubts about "truth" of the declaration made by the purchasing dealer as required by Rule 27 (2) of the Orissa Sales Tax Rules. Eight appeals were filed before the Appellate Assistant Commissioner of Sales Tax. Four of them were heard by one Shri L. C. Sahu who confirmed the order of the sales Tax Officer and dismissed the appeals in respect of the assessments for four quarters, ending 30-6-1955, 31-12-1955, 31-3-1956 and 30-6-1957. As regards the assessment for the remaining four quarters the appeals against the orders of the Sales Tax Officer were heard by one Sri S. K. Das, Appellate Assistant commissioner who took the view that so long as the purchasing dealer held a valid certificate of registration which was seen by the assessee the latter was entitled to the deductions, and it was not his lookout further to examine and find out if the purchasing dealer was really - a genuine person or a bogus person or else whether he was a "dealer" at all. The State of Orissa filed four appeals against these appellate orders of the appellate Assistant Commissioner Sri Das and the assessee also filed four appeals against the orders of Sri L. C. Sahu. AH the eight appeals were heard by the member Sales Tax Tribunal, before whom there was no challenge against the finding of the lower Court that the certificates of registration were obtained fraudulently either in the names of fictitious persons or of persons who had no license at all. On these undisputed facts the Tribunal held that there could possibly be no "true declaration" as required by Rule 27 (2) of the Orissa Sales Tax Rules from those registered dealers and that consequently the assessee was not entitled to claim deduction for sales to such dealers, but, as required by the assessee, he formulated the following questions for the opinion of this Court:- (a)

(3.) IT is now necessary to refer to certain provisions of the Orissa Sales Tax Act and the rules, framed thereunder. The expression "dealer" as defined in Clause (c) of section 2 of the Act obviously refers to a person who carries on the business of buying and selling or supplying goods in Orissa. If there is no 'person' at all there could obviously, be no "dealer". Similarly, even if there be a person, if that person is found not to carry on any business he cannot be a dealer. The expression 'registered dealer' is defined in Clause (f) of Section 2 and means a dealer registered under this Act. This would ordinarily mean a dealer validly registered under the Orissa Sales Tax Act. The definition does not say that anyone who holds a Certificate of registration is a Registered dealer. Section 9 deals with registration of a dealer and| rules have been framed for supplementing the provisions of that section. It is true that when an, application for registration is made by a person as a dealer Chapter IV of the Sale Tax Rules requires some sort of enquiry to be made by the Sales Tax Officer concerned. Rule 7 (1) says that after such enquiry as may be necessary the Sales Tax officer, if satisfied that the applicant has correctly given all the particulars and paid necessary fees may register him as a dealer. Rule 19 further enjoins on the Commissioner of Sales Tax the duty of publishing a list of registered dealers in the gazette in August every year.