FATEH CHAND MURALIDHAR Vs. PROVINCE OF BIHAR

JUDGEMENT

(1.) IN this case two questions have been referred : (1) Whether the petitioner is entitled to be registered as a dealer within the meaning of Section 2(c) of the Bihar Sales Tax Act, 1944; and (2) Whether the Sales Tax Officer has any jurisdiction under Section 20(4) of the Bihar Sales Tax Act, 1944, to cancel the petitioner's registration certificate after having obtained the previous sanction of the Deputy Commissioner and not of the Commissioner.

(2.) THE material facts are that on 29th September, 1944, the petitioner had applied for registration of his name on the ground that his gross turnover was about Rs. 25 lacs for the year 1943-44. On further enquiry the petitioner said that out of the gross turnover a sum of Rs. 86,868-7-0 represented the sale of shellac within the State of Bihar. On 1st October, 1944, the Sales Tax Officer granted him certificate of registration and asked the petitioner to submit quarterly returns. For the quarter ending 31st December, 1944, the petitioner made a return showing a gross turnover of Rs. 4,62,990-4-6. From the accounts produced and the statement made by the petitioner the Sales Tax Officer discovered that the petitioner was mainly engaged in selling and supplying goods outside the State of Bihar. After issuing notice under Section 20(4) of the Act and after considering the objection made the Sales Tax Officer cancelled the registration certificate by his order dated 30th September, 1945. The petitioner filed an application in revision before the Deputy Commissioner of Commercial Taxes, Bihar, but the petition was rejected and the order of the Sales Tax Officer was confirmed by the Deputy Commissioner. The petitioner then moved the Board of Revenue, Bihar, but his application was rejected on the grounds that the petitioner by adopting a peculiar method of business was escaping payment of sales tax in Bihar as well as in Bengal and the bulk of the business was not covered within the definition of "dealer" under Section 2(c) of the Act.

(3.) ON the first question we are of opinion that the petitioner is entitled to be registered as a dealer within the meaning of Section 2(c) of the Bihar Sales Tax Act, 1944. The next question formulated is "whether the Sales Tax Officer has any jurisdiction under Section 20(4) of the Bihar Sales Tax Act, 1944, to cancel the petitioner's registration certificate after having obtained the previous sanction of the Deputy Commissioner and not of the Commissioner". Mr. B. C. Ghosh does not seriously dispute that the Deputy Commissioner had been duly empowered under Rule 61 of the Sales Tax Rules and the Sales Tax Officer could act under Section 20(4) after having obtained the previous sanction of the Deputy Commissioner. But the learned counsel stressed the point that even if the previous sanction of the Deputy Commissioner had been obtained the Sales Tax Officer had no jurisdiction under Section 20(4) to cancel the registration certificate in view of our answer to the first question. We therefore propose to answer the second question in a modified form. "Whether the Sales Tax Officer had any jurisdiction under Section 20(4) of the Bihar Sales Tax Act, 1944, to cancel the petitioner's registration certificate." In view of our answer furnished to the first question it is sufficient to say that the Sales Tax Officer had no jurisdiction to cancel the petitioner's registration certificate and that the Sales Tax Officer assumed jurisdiction to do so upon a misconstruction of the material provisions of the Act for the reasons we have already indicated.