Judgment

SARKARIA, J.- The short question involved in this appeal on certificate, directed against a judgment of the High Court of Punjab and Haryana is: Whether the sales made to a dealer who has applied for registration under the Punjab General Sales Tax Act, 1948, before his application is allowed, are to be treated as sales to an unregistered dealer or registered dealer, when the registration is effected from the date of the application ?

2. M/s. Patiala Biscuits Manufacturers Pvt. Ltd. (hereinafter referred to as the assessees) appointed M/s. Rajpura Biscuit Company as their sole selling agents. The agents made an application on 1-1-1966 in the appropriate form for registration as a dealer under the Punjab General Sales Tax Act, 1948 (hereinafter called the Act). On the same day, the agents (referred hereafter as the purchasing dealer) made a similar application for obtaining registration certificate under the Central Sales Tax Act. The appropriate Assessing Authority accepted both these applications and on March 27, 1966 issued the registration certificate with effect from 1-1-1966.

3. The assessees filed their return for the quarter ending March 31, 1966 in April, 1966 and claimed deductions under Section 5 (2) (a) (ii) in respect of sales of the value of Rs.32,56,267.35 made by them between 1-1-1966 to 31-3-1966 to the purchasing dealer. The Assessing Authority, Patiala rejected this claim and assessed tax, amounting to Rupees 1,99,558.94, on the proceeds of the sales made by the assessees to the purchasing dealer between 1-1-1966 and 27-3-1966. The reason given by the Assessing Authority for refusing this relief to the assessees was that during this period, the purchasing dealer was not in possession of the registration certificate, the same having been issued only on March 27, 1966.

4. The assessees impugned the validity of this order of the Assessing Authority by a writ petition in the High Court, under Articles 226/227 of the Constitution. The High Court held that since the certificate of registration had been granted with effect from 1-1-1966, which was the date of the application, it could not be said that the sales during this period commencing from 1-1-1966, were made to an unregistered dealer. It further noted that apart from the assessees the purchasing dealer had also, been taxed with regard to the same transactions resulting in double taxation which was against the basic scheme of the Act, the Rules and the Notifications issued thereunder. On these premises, the High Court allowed the writ petition and quashed the impugned order to the extent to which it was contrary to Sec. 5 (2) (a) (ii) of the Act in respect of sales made between 1-1-1966 and 27-3-1966. The High Court however granted a certificate under Article 133 (1) (a) and (c) of the Constitution, on the basis of which the Revenue has come in appeal to this Court.

5. It would be appropriate to have, at the outset, a look at the relevant provisions of the Act and the Rules.

6. The material provision is in Section 5 (2) (a) (ii) which reads as under :

"In this Act the expression "taxable turnover" means the part of a dealers gross turnover during any period which remains after deducting therefrom:

(a) his turnover during that period on-

(i) ...... ...... ......

(ii) sales to a registered dealer of goods declared by him in a prescribed form as being intended for re-sale in the State of Punjab.....

Provided that in case of such sales, a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing prescribed particulars on a prescribed form (obtained from the prescribed authority) is furnished by the dealer who sells the goods".

7. Section 7 provides for the registration of dealers. It says :

"(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate.

(2) Every dealer required by sub-section (1) to be registered deale