1960 (2) TMI 37 - HC - VAT and Sales Tax

Summary

Issues:
- Liability to pay purchase tax under section 10(a) of the Bombay Sales Tax Act, 1953.
- Interpretation and application of section 10A regarding election to pay purchase tax or sales tax.
- Evidence of election by the dealer and its impact on tax liability.
- Consideration of returns showing collection of sales tax as evidence of election.

Analysis:

1. Liability under Section 10(a): The case involved a revision application challenging an order by the Additional Collector of Sales Tax, Bombay City Division, regarding the liability of the applicants to pay purchase tax under section 10(a) of the Bombay Sales Tax Act, 1953. The Sales Tax Officer initially held the applicants liable, which was upheld in subsequent appeals. The central issue was whether the applicants were indeed liable to pay the purchase tax.

2. Interpretation of Section 10A: Section 10A provides a mechanism for a registered dealer to elect to pay either purchase tax or sales tax on specific goods. The dealer must make a written election within the prescribed period and form. The court emphasized that the dealer must make a clear choice between the two taxes. In this case, the lack of concrete evidence of the applicants' election raised doubts about their claim to have made the election as required by law.

3. Evidence of Election: The applicants claimed to have made an election to pay the purchase tax, but the authorities found insufficient proof of this election. The acknowledgment provided by the applicants was deemed questionable as the initials did not match records, and the proprietor's lack of awareness of the alleged election raised suspicions. The court noted that if the election was not properly made as per Section 10A(2), the liability would revert to section 10(a), as determined by the authorities.

4. Returns as Evidence: The applicants' submission of returns showing collection of sales tax was argued by their counsel as evidence of having made the election. However, the court dismissed this argument, stating that the mere mention of sales tax collection in the returns did not substantiate the claim of election. The court highlighted that such statements in returns were self-serving and lacked evidentiary value in proving the applicants' case.

5. Conclusion: Ultimately, the court upheld the decision of the authorities that the applicants were liable to pay the purchase tax under section 10(a) of the Act. With no other points raised in the revision application, it was dismissed. The judgment emphasized the importance of complying with the statutory requirements for making an election under section 10A and the need for concrete evidence to support such claims to avoid tax liabilities.