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TMI Blog1960 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... y of sales tax by the State of Madras and an injunction was also prayed for. Both the suits were decreed by the Subordinate Judge of Salem and the decrees were confirmed on appeal by the District Judge of Salem. Two appeals were taken to the High Court by the State of Madras against those decrees and by a judgment dated February 18, 1955, the decrees were set aside by a common judgment. Against these decrees the appellants have brought these appeals by a certificate of that Court. The appellants are merchants dealing in cotton yarn. They obtained a licence under section 5 of the Madras General Sales Tax Act (Act IX of 1939), hereinafter referred to as the "Act". This licence exempted them from assessment to sales tax under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The High Court has held that on a true interpretation of the provisions of the Act and the rules made thereunder, the observance of conditions of the licence was necessary for the availability of exemption under section 5; that as the appellants had contravened those conditions they were liable to pay tax for both the years notwithstanding the licence which had been issued to them under section 5 of the Act. It will be convenient at this stage to refer to the provisions of the Act which are relevant for the purpose of this appeal. Section 2(b): "'dealer' means any person who carries on the business of buying or selling goods." Section 2(f): "'prescribed' means prescribed by rules made under this Act." Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e)............................shall if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form-I for a licence................." and the relevant portion of Form III is as follows: "Form III Cotton Licence to a dealer in Cotton yarn Cloth woven on handlooms. See rule 6(5). Licence No. dated having paid a licence fee of Rs. (in words) hereby licensed as a dealer in cotton/cotton yarn/cotton woven on handlooms for the year ending at (place of business) subject to the provisions of the Madras General Sales Tax Act, 1939, and the rules made thereunder and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd paid by him. Next there is rule 5 of the General Sales Tax Rules which provided that if any person desired to avail himself of the exemption provided in section 5, he had to submit an application in Form I for a licence and the Form of the licence shows that the licence was subject to the provisions of the Act and the rules made thereunder which required the licensee to submit returns as required and also to keep true accounts under section 13. This shows that the giving of the licence was subject to certain conditions being observed by the licensee and the licence itself was issued subject to the Act and the rules. But it was contended that the words "subject to" do not mean "conditional upon" but "liable to the rules and the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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