TMI Blog1976 (7) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ates of M/s. J.B. Dadachanji Co., with him), for the appellant. S.C. Manchanda, Senior Advocate, O.P. Rana, Advocate, with him, for the respondents. -------------------------------------------------- The judgment of the Court was delivered by GUPTA, J.- The appellant in Civil Appeal No. 928 of 1975, M/s. Karam Chand Thapar and Brothers, is a limited company incorporated under the Companies Act (referred to hereinafter as the company), and the six branches of the company at Allahabad, Moradabad, Kanpur, Varanasi, Gorakhpur and Lucknow are the appellants in Civil Appeal No. 929 of 1975. The company carries on business as coal agents and is registered under the Uttar Pradesh Sales Tax Act, 1948, and the Central Sales Tax Act, 1956, with the Sales Tax Officer at Moradabad in Uttar Pradesh. We shall refer to these two statutes as the U.P. Act and the Central Act for the sake of brevity. The company used to arrange supply of coal from collieries situate in West Bengal and Bihar to consumers in Uttar Pradesh. The collieries used to send the coal by rail and the railway receipts were prepared either in the name of the company or in the name of the consumer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Act first, section 2(c) defines declared goods as the goods declared under section 14 to be of special importance in inter-State trade or commerce. Section 14 which declares certain goods to be of special importance in inter-State trade or commerce mentions coal as one of them. Under section 3 a sale or purchase of goods is deemed to take place in the course of inter-State trade or commerce if the sale or purchase (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. The sales we are concerned with in this case were of this second type. Sub-section (1) of section 6 provides that subject to the other provisions of the Act, every dealer shall be liable to pay tax under this Act on sales of goods effected by him in the course of inter-State trade or commerce. Sub-section (2) of section 6 states that notwithstanding what is provided in sub-section (1), any subsequent sale of goods effected by a transfer of documents of title to the goods,- (A) to the Government, or (B) to a registered dealer other than the Government, if the goods are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority . Rule 12(1) of the Rules states inter alia that the declaration referred to in sub-section (4) of section 8 shall be in form C. Clause (b) of sub-section (4) is not relevant to the present purpose. Section 9(1) reads: 9. Levy and collection of tax and penalties.- (1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court had completely overlooked the proviso to section 9(1) of the Central Act. The company being admittedly a registered dealer under the Central Act and liable to pay tax under that Act, the Sales Tax Officer thought that there was an apparent error in the order of assessment made on March 27, 1971, exempting the turnover amounting to ₹ 5,59,172.32, which in view of the proviso to section 9(1) of the Central Act was taxable in Uttar Pradesh. Accordingly, he proposed to rectify the error under section 22 of the U.P. Act, and on March 21, 1974, he issued a notice to the company requiring it to appear before him on March 25, 1974. In response to the notice a representative of the company appeared, contended against the proposed rectification, and also filed a written objection. The Sales Tax Officer recorded an order on March 26, 1974, overruling the objections and rectified the order of assessment dated March 27, 1971. A copy of the order passed on March 26, 1974, rectifying the mistake in the earlier assessment order was served on the company on March 31, 1974. The company challenged the order dated March 26, 1974, by a writ petition in the Allahabad High Court which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equentially omitted, also with effect from April 1, 1963. The omission of clause (a) is the basis of the argument that declared goods are altogether outside the purview of sub-section (3) and, therefore, of sub-section (1) of section 8, and, as the declaration referred to in sub-section (4) of section 8 was required where sub- section (1) of the section was applicable, it was not possible for the company to obtain such a declaration. The contention seems to us untenable. Section 9(1) of the Central Act contains a general rule that the tax payable by any dealer under this Act shall be levied and collected in the State from which the movement of the goods commenced. The proviso to section 9(1) qualifies this rule in the case of a subsequent sale which is not exempt from tax under section 6(2), and states that the tax on such subsequent sale would be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or could have obtained the form prescribed for the purposes of section 8(4)(a). No exemption under section 6(2) is claimed in this case. The declaration referred to in section 8(4)(a) is necessary for the dealer to avail of the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales were not to registered dealers; in the written objection filed before the Sales Tax Officer pursuant to the notice under section 22 of the U.P. Act, the only ground taken was that no declaration was required to be filed in the case of declared goods. The point was taken for the first time in the writ petitions. We do not think we should allow this question, which is one of fact, to be raised at this stage. The next question is whether this error in the original order of assessment can be called an apparent error within the meaning of section 22 of the U.P. Act. There is no dispute that an apparent error means a patent mistake, an error which one could point out without any elaborate argument. The order of assessment relating to the assessment year in question, 1966-67, was made on March 27, 1971, by the Sales Tax Officer relying on a judgment of the Allahabad High Court on a writ petition made by the company questioning the validity of the assessment in respect of the assessment year 1965.66. In that judgment the High Court held, referring to the provisions of section 9(1) of the Act, that the sales tax authorities in the State of U.P. had no jurisdiction to make any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made on March 31, 1974, when it was communicated to the assessee which was beyond three years from the date of the order of assessment. Mr. Nariman relied on the well-known rule of fairplay that the rights of a party cannot be affected by an order until he has notice of it. In Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer [1962] 1 S.C.R. 676, this court considering the meaning of the words the date of the award occurring in section 18 of the Land Acquisition Act, 1894, observed: The knowledge of the party affected by the award, either actual or constructive, being an essential requirement of fairplay and natural justice the expression 'the date of the award' used in the proviso must mean the date when the award is either communicated to the party or is known by him either actually or constructively. In our opinion, therefore, it would be unreasonable to construe the words 'from the date of the Collector's award' used in the proviso to section 18 in a literal or mechanical way. .........where the rights of a person are affected by any order and limitation is prescribed for the enforcement of the remedy by the person aggrieved agains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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