DISPENSING CHEMIST Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THIS reference has been made by the Board of Revenue for Rajasthan at Ajmer under section 15 (3a) of the Rajasthan Sales Tax Act, 1954 (hereinafter called "the Act"), at the direction of this Court and following questions of law arising out of the order of the Board of Revenue dated 23rd January, 1970, have been referred : " (1) Whether the assessing authority was justified in treating the exemption certificate not valid, even when it was not properly cancelled ? (2) Whether the period of 30 days prescribed under rule 12 of the Act for filing renewal application is directory and whether the assessing authority was not competent to ignore the renewal on the ground of delay in the submission of the application and taking into consideration the turnover for the period from 1st April, 1957, to 5th May, 1957 ?" The assessee is a dealer registered under the Act and carries on the business of selling allopathic medicines. The Government of Rajasthan by Notification No. F. 21 (7)SR/55 dated 14th April, 1955, granted exemption from payment of sales tax to dealers in allopathic medicines subject to their obtaining an exemption certificate on payment of fixed annual fee of Rs. 10. The assessee obtained an exemption certificate in accordance with the aforesaid notification, regarding the sale of allopathic medicines on 3rd June, 1957, for the financial year 1957-58. During the proceedings for assessment of sales tax for the period from 1st April, 1957, to 31st March, 1958, the assessee claimed exemption on the basis of the aforesaid certificate in respect of sales of allopathic medicines for the period from 1st April, 1957, to 5th May, 1957, as the provisions in respect of exemption were modified by the notification dated 6th May, 1957. The assessing authority, namely, Commercial Taxes Officer, Jodhpur, disallowed the assessee's claim for exemption on the ground that he had applied for renewal of the exemption certificate on 7th May, 1957, while the exemption could have been granted under the notification dated 14th April, 1955, up to 5th May, 1957, only. According to rule 12 of the Rajasthan Sales Tax Rules, 1955, an application for granting an exemption certificate or renewal thereof could have been filed within 30 days, i. e. , up to 30th April, 1957.

(2.) THE assessee filed an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, who dismissed the appeal by his order dated 22nd June, 1962. THE assessee thereafter preferred a revision petition before the Board of Revenue for Rajasthan at Ajmer. A Division Bench of the Board of Revenue dismissed the revision petition by its order dated 21st March, 1969, holding that according to the notification dated 14th April, 1955, it was a condition precedent for obtaining benefit of the exemption that the assessee must hold a valid certificate of exemption. It was further held that the post-dated certificate could not form the basis of relief retrospectively.

(3.) NOW, we shall take up the first question referred to us as to whether the exemption certificate could be considered as invalid by the assessing authority even when it was not properly cancelled. The argument of the learned Additional Advocate-General who appeared before us on behalf of the revenue is that as the assessee did not submit an application for obtaining the exemption certificate within 30 days as required under rule 12, the exemption certificate granted by the Sales Tx Officer in favour of the assessee on 3rd June, 1957, was a nullity and the same was rightly ignored by the assessing authority as well as by the appellant authority and the Board of Revenue. The contention of the learned Additional Advocate-General is that the submission of an application for obtaining an exemption certificate within the prescribed period of 30 days was an essential pre-requisite for the Sales Tax Officer obtaining the jurisdiction to issue an exemption certificate. It was further contended that the Sales Tax Officer was a Tribunal of limited jurisdiction and if the essential pre-requisites were not complied with, there was total absence of jurisdiction. It is, of course, not denied nor it is disputed before us that the exemption certificate granted by the Sales Tax Officer on 3rd June, 1957, was not cancelled or set aside by any competent authority, either the Sales Tax Officer himself or by any higher authority in appeal or revision. The contention of Mr. Kakkar on the other hand is that the exemption certificate issued by the Sales Tax Officer in favour of the assessee was a valid certificate of exemption in spite of the fact that the application for obtaining such certificate was filed by the assessee beyond the period of 30 days. His submission is that once a certificate of exemption was granted by the Sales Tax Officer, the same could not be ignored by the taxing authority even if it was irregular or illegal, unless the same was set aside or cancelled, either by the assessing authority by recourse to proceedings for rectification under section 17 of the Act, or by the Board of Revenue in revision proceedings under section 14 of the Act. Learned counsel referred to sub-section (3) of section 26 of the Act and submitted that penalty for disobedience or breach of any provision of the Rules could be made punishable by the State Government with fine not exceeding Rs. 500, and in the case of a continuing offence with a fine not exceeding Rs. 25 for every day till the offence continues. Thus, the argument of the learned counsel for the assessee is that so long as the exemption certificate was neither cancelled nor set aside, the same could not be ignored by the Sales Tax Officer and the benefit of the exemption should have been allowed to the assessee for the period between 1st April, 1957, to 5th May, 1957.