BALLIMAL NAWALKISHORE Vs. ASSESSING AUTHORITY

JUDGEMENT

(1.) THE short question which falls for determination in this case relates to the vires of Rule 7 (2a) of the Central Sales Tax (Punjab) Rules, 1957, framed by the State of Punjab in pursuance of Section 13 of the Central Sales Tax Act (No. 74 of 1956) (hereinafter called the Central Act ). The facts giving rise to the controversy are not in dispute and may here be stated in brief. The petitioner-firm Messrs Ballimal Nawalkishore is a dealer under the Punjab General Sales Tax Act (hereinafter called the Punjab Act) and under the Central Act and is carrying on the business as a commission agent in respect of wool in Panipat and on that account has to get itself registered under Section 7 of the Punjab Act. A similar registration under Section 7 of the Central Act is also essential in the petitioner's case because the firm deals in inter-State trade, for under Section 6 of the Central Act, tax has to be paid on all sales effected in the course of inter-State trade or commerce after the requisite notification. It is not disputed that in the present case tax under the Central Act is payable by the petitioner. As commission agent, the petitioner supplies wool to purchasers both in and outside the State of Punjab, but in the case in hand, the controversy centres round the supply of wool through the petitioner to parties outside Punjab. Indeed, according to the writ petition, the only party, whose transactions are the subject-matter of the present controversy, is a firm called Krishna Kapoor and Co. (hereinafter called Krishna Company) of Jaipur and the assessment in question relates to the year 1963-64 under the Central Act. Krishna Company, it may be pointed out, is also registered under the Central Act. The procedure for the sale of raw wool to Krishna Company is that the said company sends its representatives to Panipat to the petitioner-firm and through the petitioner-firm raw wool is purchased from time to time as required by Krishna Company. After the purchases have been effected, consignments are sent as soon as possible depending on the availability of transport or railway booking etc. Goods purchased in one transaction may thus be sent by different consignments or goods purchased by means of several transactions may be sent by one consignment. The orders are usually placed orally either on telephone or through the representative of Krishna Company. These facts may not be strictly necessary for considering the vires of the rule, but they have been asserted in the writ petition apparently for the purpose of showing that to comply with the impugned rule would not only mean extreme avoidable hardship to the petitioner-assessee but would also be unworkable in practice.

(2.) TO understand the precise narrow controversy involved in the case, it is desirable at this stage to read the impugned rule and the other relevant provisions of both the Punjab and the Central Acts and the rules made thereunder. Relevant portion of Rule 7, Central Sales Tax (Punjab) Rules, reads thus :7. (1) Any dealer registered under the Act shall apply to the authority to whom he made his application for registration for the grant of declarations in Form 'c' prescribed under the Central Sales Tax (Registration and Turnover) Rules, 1957, stating clearly his reasonable demand, for not more than three months, disclosing the stock and details of such declaration forms already in hand and also the date on which and the manner in which he was last issued the declaration forms. * * * (2a) No single declaration in Form 'c prescribed under the Central Sales Tax (Registration and Turnover) Rules, 1957, shall cover more than one transaction of sale except when the total amount of sales does not exceed five thousand rupees.

(3.) RULE 7 (2b) lays down that the counterfoil of the declaration in Form "c" shall be maintained by the registered dealer for a period of three years after the close of the year to which the said form pertains. Section 13 of the Central Act, so far as relevant for the purpose of showing the authority conferred on the Central Government and the State Government for making rules, may now be read :13. (1) The Central Government may, by notification in the Official Gazette, make rules providing for* * * (d) the form in which and the particulars to be contained in any declaration or certificate to be given under this Act; * * * (2) All rules made by the Central Government under Subsection (1) shall be laid before both Houses of Parliament as soon as may be after they are made and shall be subject to such modifications as Parliament may make during the session in which they are so laid or the session immediately following. (3) The State Government may make rules not inconsistent with the provisions of this Act and the rules made under Sub-section (1), to carry out the purposes of this Act. (4) In particular and without prejudice to the powers conferred by Sub-section (3), the State Government may make rules for all or any of the following purposes, namely :* * * (e) the authority from whom, the conditions subject to which and the fees subject to payment of which any form of declaration prescribed under Sub-section (4) of Section 8 may be obtained, the manner in which the form shall be kept in custody and records relating thereto maintained, the manner in which any such form may be used and any such declaration may be furnished ; * * *