TMI Blog1979 (3) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... in District Ambala and was duly registered as a dealer under the Punjab General Sales Tax Act, 1948, as applicable to the State of Haryana, and the Central Sales Tax Act, 1956. Whilst filing the necessary sales tax returns, the petitioner-firm claimed the statutory deductions available to them under section 5(2)(a)(ii) of the Punjab General Sales Tax Act, 1948, which was then extended to and enforced in the State of Haryana. These included sales to the tune of Rs. 1,40,000 and odd to Messrs. Bhagwati Metal Works, Jagadhri, alleged to be a registered dealer under the Act. However, the Assessing Authority by an order dated 22nd October, 1971, rejected the aforesaid sales apparently as being not genuine and aggrieved thereby the petitioner-firm preferred an appeal to the Deputy Excise and Taxation Commissioner, Ambala. The latter by his order dated 25th September, 1973, upheld the disallowance of the claim to the petitioner-firm except a sum of Rs. 1,40,297.51 in respect of Messrs. Bhagwati Metal Works, but remanded the matter to the Assessing Authority to examine this claim in view of the amended provisions of the law consequent upon the enactment of the Haryana General Sales Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It then suffices to point out that by section 1(3) of the Act aforesaid the third proviso quoted above is deemed to have come into force on 1st May, 1949. 4.. I would first advert to the constitutional challenge laid against the impugned provision. Mr. R.P. Sawhney had been vehement in contending that this proviso places such an utterly unreasonable restriction on the petitioner's fundamental right to hold property and to carry on its business, that it is palpably violative of the guaranteed freedoms under article 19 of the Constitution. Counsel was eloquent in arguing that the nature of the obligation placed on the registered dealer thereby was so onerous as to be virtually impossible of compliance and, therefore, plainly irrational. It was submitted that the return and the declaration made by the selling dealer with regard to the sales made to the registered dealers for the purpose of deductions from the taxable turnover were conclusive and no burden could ever be cast on him with regard to the genuineness thereof in any circumstances whatsoever. It was submitted that the selling dealer could not possibly have any control over the sold goods or the wherewithal to establish the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to go behind the declaration and examine the genuineness of the transactions contained therein. This stand seems to be more than amply borne out by all the judgments prior to 1973. Now it is not in dispute that the corresponding provisions of section 27 of the Haryana Act of 1973 in the preceding statute of the Punjab General Sales Tax Act, 1948, are those of section 5(2). It is further the admitted position that prior to 1973, section 5(2) of the Punjab General Sales Tax Act had been extended to the State of Haryana and, even earlier thereto, was applicable to the erstwhile State of Punjab, which included the territories of Haryana. Construing the said provisions, a Division Bench of this Court in Ram Pal Madan Gopal v. Punjab State[1968] 22 S.T.C. 79. has held in no uncertain terms that whilst a declaration under section 5(2)(a)(ii) of the Punjab General Sales Tax Act read with rule 26 was prima facie proof that the sales have been made to the registered dealers, but the sales tax authorities can refuse to allow the deduction if there is evidence that the sales are not genuine. This view consistently held the field and was reiterated in Pahar Chand Sons v. State of Punja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity had in a way circumscribed the same by broadly indicating the guidelines for determining the genuineness or otherwise of an alleged transaction of sale. These are in no way exhaustive because of the use of general words and, in particular, the words "among other things" would be clearly indicative of the fact that the legislature had not completely constricted the power of the Assessing Authority to these guidelines with regard to determining the bona fides of the transaction. The four guidelines laid therein are: (a) financial position of the purchaser; (b) his capacity to make the purchase; (c) the nature and extent of the business ; and (d) subsequent disposal of goods by the purchasing registered dealer. Now it appears to me that the aforesaid criteria cannot possibly be labelled as extraneous to or irrelevant for the purpose of determining the genuineness or otherwise of a sale transaction. Indeed, these are the factors which would plainly and obviously come to one's mind when doubts are raised qua the authenticity of a transaction of sale. In my view, therefore, Mr. Mohunta, the learned Advocate-General, appears to be wholly correct in contending that the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the primary clause. 13.. At the first flush the argument does seem to have a content of plausibility but a close and deeper analysis thereof would show that, in essence and more so in the peculiar context herein, it rests more on the ingenuity of the counsel rather than on a sound legal or factual foundation. The contention deserves examination from a twin angle and the first one is with regard to the very nature and content of the third proviso. 14.. With his illimitable fairness, Mr. Bhagirath Dass had himself conceded that if a proviso is in effect or in sum and substance a substantive clause then there is no legal bar in its standing by itself and having independent statutory force. Once that is so, it was conceded that like any other statutory provision it could be given retrospectivity if the legislature has the competence to do so. Therefore, in this context, the first and the primary question that arises for determination is whether the third proviso is in its true essence a substantive clause which lays down a rule of action by itself or is it merely an addendum to the principal clause. 15.. Since the issue is covered by a precedent of the final court, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 27 or for that matter can with equal facility be couched in a full-fledged clause. I would, therefore, hold that the third proviso in effect is a substantive clause, though, in the words of their Lordships of the Supreme Court, couched in the form of a proviso and could have independent operative effect as a substantive provision under the statute. Consequently, the very core of the attack against its retrospectivity is conclusively repelled. 17.. In the alternative, it has then to be seen whether the third proviso in its retrospectivity can operate inevitably on the corresponding provisions of the Punjab General Sales Tax Act, which admittedly is the predecessor statute of the Haryana General Sales Tax Act, 1973. It is not in doubt that prior to the 1973 Act, the Punjab General Sales Tax Act held a sway over the territories, which now constitute the State of Haryana, from 1949 onwards. The question, therefore, is whether the third proviso can with equal facility fit in the corresponding provisions of the predecessor statute, i e., the Punjab General Sales Tax Act, 1948. Herein again the matter appears on a closer analysis to be singularly free from any difficulty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding reference is to section 6 in the Punjab General Sales Tax Act. However, even a cursory reference to section 6 of the Punjab General Sales Tax Act, 1948, would show that the tax-free goods therein are specified in the first column of Schedule B to the said Act, which is more or less common to both the statutes. Similarly, the disparity in the language used in section 5(2)(a)(ii) of the Punjab General Sales Tax Act and section 27(1)(a)(ii) of the Haryana Act is completely explained when a reference is further made to sections 17 and 18 of the Haryana Act. A mere glance on the provisions of section 18 of the Haryana Act would make it manifest that these in substance correspond exactly to what was laid down in subsection (1-A) of section 5 of the Punjab General Sales Tax Act, to which reference has been made in section 5(2)(a)(ii). A corresponding similarity between the provisions of section 17 is then evident with the matching provisions thereof in the Punjab General Sales Tax Act, 1948. When confronted with this plain similarity even Mr. Bhagirath Dass was fair enough to concede that the provisions are in effect and virtually in pari materia. Once this is so, it is plain that if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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