1974 (9) TMI 97 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Validity of the concessional rate of tax under Section 6A of the Bihar Sales Tax Act, 1959, from 1st November 1962.
2. Interpretation of Section 6A(1)(b) and 6A(2) of the Bihar Sales Tax Act, 1959.
3. Application of Rules 4A and 8A of the Bihar Sales Tax Rules, 1959.
4. Jurisdiction of the prescribed authority to grant certificates retroactively.

Issue-wise Detailed Analysis:

1. Validity of the Concessional Rate of Tax under Section 6A of the Bihar Sales Tax Act, 1959, from 1st November 1962:

The Tribunal initially allowed the concessional rate of tax from 14th December 1962, instead of 1st November 1962. The High Court examined whether the dealer's claim for the concessional rate from 1st November 1962 was justified. The High Court concluded that the dealer's claim was justified in law, as the certificate issued on 14th December 1962 was made operative from 1st November 1962. Therefore, the Tribunal's decision to restrict the concessional rate from 14th December 1962 was incorrect.

2. Interpretation of Section 6A(1)(b) and 6A(2) of the Bihar Sales Tax Act, 1959:

Section 6A(1)(b) allows sales to a registered dealer of goods for manufacturing or processing to be taxed at a concessional rate, provided the purchaser has a certificate granted by the prescribed authority. Section 6A(2) requires the selling dealer to furnish a declaration in the prescribed form. The High Court interpreted these provisions to mean that the certificate could be made operative from a date prior to its issuance, provided the statutory conditions were met. The Court emphasized that the statutory obligation is discharged if the certificate is furnished at any time before the assessment.

3. Application of Rules 4A and 8A of the Bihar Sales Tax Rules, 1959:

Rules 4A and 8A were notified on 3rd January 1963. Rule 4A(5)(a) states that a certificate under Section 6A(1)(b) is valid for the same period as the certificate of registration of the purchasing dealer. The High Court noted that there was no legal infirmity in making the certificate operative from 1st November 1962, even though it was issued on 14th December 1962. Rule 8A requires the dealer to substantiate the claim for a concessional rate by producing relevant documents and declarations. The High Court held that the declaration could be filed after the sales are effected, as long as it is before the assessment.

4. Jurisdiction of the Prescribed Authority to Grant Certificates Retroactively:

The High Court concluded that the prescribed authority had the jurisdiction to grant certificates retroactively. The Court reasoned that the legislature did not intend to deprive a dealer of the relief provided in a taxing statute due to procedural delays in issuing the certificate. The Court cited the Supreme Court's decision in Mathra Parshad and Sons v. State of Punjab, which supported the view that exemptions or concessions could apply retroactively unless explicitly stated otherwise.

Conclusion:

The High Court answered the reference in the negative, holding that the Tribunal was not justified in restricting the concessional rate of tax from 14th December 1962. The dealer's claim for the concessional rate from 1st November 1962 was justified in law. The question was answered in favor of the assessee and against the department, with the assessee entitled to costs assessed at Rs. 100.