TMI Blog1959 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bombay, as a party to the appeal in view of the States Re-organisation Act. It was conceded before us on behalf of the respondents that today the liability to refund the sales tax to the appellant-assessee would be that of the Collector of Sales Tax, Bombay, and that the first two defendants were not liable. The facts necessary for the disposal of the appeal are as follows. The Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947) received the assent of the then Governor-General on the 23rd May, 1947, and the assent was first published in the Central Provinces and Berar Gazette, Extraordinary, on the 27th May, 1947. As soon as the Act came into force, the Department called upon all dealers liable to pay sales tax to register themselves. Pursuant to this announcement in the press, a copy of which was placed before us in the appeal, the appellant-company applied for registration to the Sales Tax Officer, Nagpur, on 2nd July, 1947, and a certificate of registration was granted to it on 21st July, 1947. (Certificate No. B. G-8.) The period of assessment which was challenged in the suit was from 1st June, 1947 (i.e. from the inception of the Act) to 30th September, 1951. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions have been referred to us, namely: (1) Whether the authority who issued the registration certificate to the applicant had jurisdiction to do so, and if not, (a) whether the said registration certificate was not invalid, and (b) whether the assessment was not invalid. (2) Whether the authority who made the assessment had jurisdiction to do so, and if not whether the assessment made in this case was not invalid. Mr. S.P. Oke appearing on behalf of the applicant in the reference, Messrs. Ganesh Mahadeo Lele, Saraf Shop, Nagpur, adopted the arguments of Mr. Sheode but also urged some other points. They are covered by questions Nos. 4, 5, 6 and 7 mentioned in the order of reference as points which arose according to the applicant, but which the Tribunal considered, fell within the scope of the two points formulated by it and, therefore, did not separately refer. We shall advert to these contentions raised by Mr. Oke at the proper time. Certain facts may now be stated in order to show how the first point raised by Mr. Sheode in the appeal arises and to appreciate counsel's contentions. By virtue of the provisions of sub-section (1) of section 3 of the Sales Tax Act, the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, there was no proper conferment upon them of powers as required by sub-section (2) of section 3. Sub-section (2) lays down that the officers appointed under sub-section (1) shall exercise such powers as may be conferred and perform such duties as may be imposed, by or under this Act and that refers back to sub-section (1) which prescribes that the State Government may appoint any person to be a Commissioner of Sales Tax, and such other persons under any prescribed designations to assist him as it thinks fit. The emphasis is upon the words "under any prescribed designations". The word "prescribed" has been defined in the Act as meaning "prescribed by rules made under this Act". Now Mr. Sheode's contention is that the rules made under the Act were not in existence on 21st July, 1947, when the certificate of registration was granted to the plaintiff. The rules were first published in the Central Provinces and Berar Gazette on 15th August, 1947, by which date the certificate of registration had been issued already. Since the rules were made on 15th August, 1947, there was no valid compliance with sub-section (1) of section 3 of the Act and the Sales Tax Officer was not validly appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered. It was contended that in the instant case even assuming that there was no power to register, at any rate on the date on which the certificate was granted the appointment of Sales Tax Officers was there because the notification (exhibit P-16) dated 27th May, 1947, was promulgated by that date. The notification runs as follows: "In exercise of the powers conferred by section 3 of the Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947) the Provincial Government is pleased to direct that the District Excise Officers in charge of districts shall be the Sales Tax Officers within the district to which they are attached for the purpose of receiving applications for registration and for issuing registration certificates under section 8 of the Act." The certificate issued in the case of the appellant in the first appeal was on 21st July, 1947, and therefore it was contended that the registration was valid. In our opinion, however, it is not necessary to decide these questions. We are of opinion that the appellant must fail upon the second point raised by Mr. Sheode in the appeal, namely, that if the registration or the grant of the certificate of registration is inval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of a taxing statute providing the machinery for recovery of tax cannot control its charging section or other provisions creating the liability to pay the tax. In the instant case, we hold that it is section 4 which controls and governs the provisions of sections 8 and 11(5) and not vice versa. At this stage, we may also conveniently consider some points raised by Mr. Oke in his arguments. His first point was based on the provisions of rule 3(1) from which we have already reproduced the relevant clause. The clause speaks of Sales Tax Officers, whereas it was pointed out that one Mr. R.G. Shukhla who was appointed by exhibit P-16 was only an officiating Sales Tax Officer. We do not think that much turns upon this distinction. In our opinion, a person who is officiating holds the same rank and has unless otherwise specified the same jurisdiction as the person in whose place he is officiating. At any rate, the fact that he was only officiating cannot affect his jurisdiction as a Sales Tax Officer. The other contentions raised by Mr. Oke are founded upon the terms of the notification dated 27th May, 1947, contained in exhibit P-11 by which the Government appointed the Excise C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be heard." The contention is that the Commissioner in the instant case did not determine the question. The certificate of registration granted without considering whether the applicant was a dealer and liable to registration was "illegal and ultra vires." In our opinion, section 19 was inapplicable in the instant case. Section 19 only applies where a dispute arises or is raised by a dealer as to his liability to registration. No such dispute arose in the present case. On the other hand, the dealer himself applied in Form I appended to the Sales Tax Rules. The form contains a statement that the dealer desires to be registered voluntarily under section 8-A of the Act. Therefore, the dealer in the instant case was registered as a dealer voluntarily and upon his own application, and there was no question disputed or otherwise arising as to his liability to registration. The contention cannot be upheld. The other contentions raised by Mr. Oke are the same as have been raised by Mr. Sheode on behalf of the appeallant in the first appeal. There then remains the constitutional objection raised on behalf of the assessees. The assessment in the first appeal being for the period 1st June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may apply to the tax, authorised to be made from dividends payable by the companies to individuals; (c) that no provision exists for taking the tax so paid into account in computing for the purposes of Indian income-tax the total income of individuals receiving such dividends, or in computing the Indian income-tax payable by, or refundable to, such individuals." There is little substantial difference between the two definitions except in clause (c) which was slightly altered by the Constitution. Having regard to the definitions referred to above, and particularly clause (c) of Article 366(6), it is clear that a tax, in order to be deemed a corporation tax, must be a tax on income and such tax must be payable by corporations and corporations alone. As stated in Flint v. Stone Tracy Co. [1910] 220 U.S. 107. "it is a tax upon the doing of business, with the advantages which inhere in the peculiarities or corporate or joint stock organizations of the character described. As the latter organizations share many benefits of corporate organizations, it may be described generally as a tax upon the doing of business in a corporate capacity." On the other hand, a sales tax or rather a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which remains after deducting therefrom(a) his turnover during that period on(i) the sale of goods declared tax-free under section 6; (ii) sales to a registered dealer of goods.........; (iii) sales to any undertaking supplying electric energy to the public.........; (iv) such other sales as may be prescribed; and (b) two per centum of the balance remaining after making the deductions allowed by sub-clauses (i) to (iv) of clause (a)." The definitions of turnover and taxable turnover read with the charging section make it clear that the pith and substance of the enactment was to tax the sales of goods alone and nothing else, and the mere fact that sales which may be made by corporations would also come within the purview of the tax is, in our opinion, merely ancillary to the main purpose of the charging section. Considering the nature of the tax and contrasting it with the corporation tax as defined in the Government of India Act and in the Constitution, it is clear that substantially what was intended to be taxed were the transactions of sales of goods and not the income accruing therefrom. Indeed, a corporation may enter into several transactions of sales of goods and be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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