TMI Blog1953 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ving become effective from the very commencement of the Act and can sales made to him during the period when he was not actually registered be regard- ed as sales to a registered dealer for the purposes of section 2(j)(a)(ii)?" "(2) Should the word 'contract' occurring in the proviso to sec- tion 4(1) of the Act be understood in its general sense or in the special sense given to it in section 2(b) of the Act?" 2.. Since the name of the purchaser dealer does not appear in the order, he is referred to in this judgment as dealer B. 3.. The facts of the case bearing on the first question are: The assessee Hirji Govindji was a registered dealer for the chargeable accounting period from the 1st June, 1947, to the 12th November, 1947. During thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x for sales made from the 1st June, 1947, it is made within the time allowed by law, it shall register the applicant in accordance with such rules as may be made under the Act and grant him a certificate of registration in the prescribed form. Section 24(1)(a) provides that whoever carries on business as a dealer in contravention of sub-section (1) of section 8 shall, without prejudice to the recovery of any tax that may be due from him, be punishable with simple imprisonment for six months or a fine not exceeding Rs. 1000 or with both. By section 4 of the Amending Act LIX of 1948 the words "simple imprisonment which may extend to six months" have been substituted for "simple imprisonment for six months". Under section 25 the Commissioner c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary certificates. To obviate the hardship resulting from the effect of section 8(1) the proviso to that sub-section provides that the dealer registered before prescribed date shall be deemed not to have contravened that sub-section, that is, he shall be deemed to be a registered dealer as from the commencement of the Act. This is not disputed. According to the learned counsel for the assessee a similar fiction is also created by sub-section (5). 7.. The learned counsel for the Commissioner submits that the fiction created by sub-section (5) must be limited to the making of an application for registration. Reliance was placed on Radha Kissen Chamria v. Durga Prosad Chamria(1), where their Lordships have observed: "As the analogy only ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on certificate takes effect from the commencement of the Act, sales made to him are liable to be deducted in computing taxable turnover of the assessee. Our answer to the first question is therefore in the affirmative. 9.. The facts leading to the other question are: Prior to the 1st June, 1947, the assessee had made several agreements to sell goods. Those goods were supplied and price was received after the Act came into force. It is not disputed that the property in the goods passed to the purchasers after the Act came into force. The learned counsel for the assessee however contends that the sales were exempt from tax under the proviso to section 4 which runs thus: "Provided that the tax shall not be payable on sales made in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject or context. Under section 4(1) all sales effected after the commencement of the Act are liable to tax. The proviso excludes sales made in the course of the execution of contracts made before the commencement of the Act. Such contracts must fall within the definition of the word "contract" given in the Act. The learned counsel has not drawn our attention to any rule or precedent in support of the submission that the term "con- tract" in the proviso should not receive the meaning given to it by the definition in the Act but receive the wider meaning of the term under the Contract Act. The learned counsel does not contend that there is anything repugnant in the subject of the aforestated proviso or con- text to entitle the Court to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received subsequent to the commencement of the Act would have been liable to sales tax although most of the work may have been completed before the commencement of the Act. The intention of the Legislature in enacting the proviso was to give relief to persons who had entered into contracts as defined by section 2(b) prior to the commencement of the Act. 12.. The tax is on the sale or supply of goods; and if sale or supply is made after the commencement of the Act the seller is prima facie liable to pay the tax unless exemption is granted under some pro- vision of the Act. In our view, the exemption granted by the proviso is limited to the contracts as defined in section 2(b) of the Act and not to any other contract for sale of goods made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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