BUDHRAM KASHIRAM Vs. STATE OF BIHAR

JUDGEMENT

(1.) These three tax cases came to this court under Section 25(2)(b) of the Bihar Sales Tax Act, 1947 (hereinafter referred to as "the Act"), on rejection by the Commercial Taxes Tribunal to refer these cases to this court. They relate to the assessment against the petitioner for the periods 1956-57 (broken period), 1957-58 and 1958-59. The original assessment for the period 1956-57 was dated (sic) 20th September, 1957, the original assessment for the period 1957-58 was dated 20th June, 1958 and the original assessment for the period 1958-59 was dated 29th February, 1960. The assessment orders dated 20th September, 1957 and 20th June, 1958, were, however, reopened and revised by the assessing officer by order dated 31st January, 1960- As against that order (31st January, 1960) as also against original assessment order dated 29th February, 1960, the petitioner preferred three separate appeals before the Deputy Commissioner of Sales Tax, Bihar, Ranchi. One of the questions to be decided was whether the credit sales to registered dealers should be deducted for the purpose of arriving at the taxable turnover under explanation to Section 5 of the Act irrespective of non-production of declaration under Rule 18 of the Bihar Sales Tax Rules, 1949 (as amended in 1956), hereinafter referred to as "the Rules". The Deputy Commissioner, while disposing of the three appeals by a common judgment dated 26th August, 1961, observed that, in claiming deduction on account of sales made to registered dealers, the declarations were required to be produced in respect of cash or credit sales. In the case of credit sales also with effect from 7th April, 1956, declarations were required to be produced. The assessing officer had to be satisfied that the sales had been made to other dealers on credit. In the last paragraph, he further ordered thus: The order of the court below is, therefore, set aside and proceedings remanded. The appellant should be given an opportunity to show to what extent he had made sales to other registered dealers on credit and to what extent it is permissible by law. In case he fails to appear as done by him previously, the learned assessing officer shall assess the appellant to the best of judgment.

(2.) Against the said remand order, the petitioner filed three separate revisions before the Member, Board of Revenue, before whom it was argued that Rule 18 of the said Rules did not require declaration in respect of credit sales. The learned Member, Board of Revenue, in his resolution, dated 6th February, 1962, has referred to the provisions of Rule 18 of the Rules, as amended in 1956, which read thus : 18. Conditions subject to which a dealer may claim deduction from gross turnover on account of sale of goods to registered dealers.-A dealer who wishes to deduct from his gross turnover the amount of a cash or credit sale to a registered dealer shall produce the copy of the relevant cash memo or bill according as the sale is a cash sale or a sale on credit and a true declaration in writing in form VIA by the purchasing dealer or by such responsible . person as may be authorised in writing in this behalf by such dealer that the goods in question are specified in the certificate of registration of such dealer and are required by such dealer either for use in the execution of any contract or for resale or for use in packing or are taxable goods for resale. He held, "this makes it obligatory to produce declarations even for credit sales for the period under assessment" and he was pleased to reject the three revision petitions.

(3.) After remand the three cases ultimately came up for reassessment before the assessing officer, who, by his orders dated 20th April, 1962 (exhibits F-l, F-2 and F-3), disallowed the claim of the petitioner and, while so doing, he observed that the dealer did not produce declarations in support of the alleged credit sales to registered dealers shown in his seized books of account. The point for consideration was whether the entire amount claimed to be representing such sales or any part thereof might be allowed to be deducted in the absence of the declarations as required under Rule 18 of the Bihar Sales Tax Rules, 1949, in the context of the observations contained in the appellate order. He further held that the appellate order read as a whole did not permit the assessing officer to overlook the provisions of Rule 18 of the Rules, which made it mandatory on the part of a dealer to produce declaration certificates in support of his claim of credit sales to registered dealers and allow any amount in the absence of necessary declarations at his discretion. In that view of the matter, he came to the conclusion that the claim for the credit sales to registered dealers on the basis of the entries in the seized books did not seem admissible and, therefore, he disallowed it.