Judgment

RAMASWAMI,, J.

( 1 ) THE respondent is a dealer in manganese ore having its head office at Nagpur. Before the formation of the new State of Madhya Pradesh on 1/11/1956, the respondent was carrying on business at Nagpur (styled as head office and main place of business) and at Gondia (styled as additional place of business ). Prior to 1/11/1956, both Nagpur and Gondia were within the then State of Madhya Pradesh. Apart from Nagpur and Gondia, prior to 1/11/1956, the respondent was also working the manganese mines in Wara Seoni and Chhindwara within the then State of Madhya Pradesh and was carrying on business at the said two places. The respondent held a registration certificate under the C. P. and Berar Sales Tax Act, 1947 (C. P. and Berar Act No. 21 of 1947) (hereinafter called "the Act" ). In the registration certificate Nagpur was shown as the main place of business and Gondia as an additional place of business. But in the registration certificate Wara Seoni and Chhindwara were not shown as additional places of business of the respondent. As a result of the reorganisation of States on 1/11/1956, Nagpur was incorporated within the State of Bombay. The respondent became a registered dealer in the new State of Madhya Pradesh on 8/03/1958. The Sales Tax Officer, Chhindwara, assessed the respondent for the period 1/11/1956, to 3/07/1958, under section 19 (4) and section 17 (3) of the Act read with section 11 (4) and section 10 (3) of the central Provinces and Berar Sales Tax Act, 1947. The tax was assessed at Rs. 27,697. 28 and a penalty of Rs. 3,000. 00 was imposed on the respondent under section 17 (3) of the Act. The Sales Tax Officer took the view that as a result of the reorganisation of the States, the respondent became liable to pay tax for the above assessment period as he was doing business in the new State of Madhya Pradesh and continuedto be a registered dealer. On appeal, the Appellate Assistant Commissioner affirmed the view of the Sales Tax Officer and dismissed the appeal. The respondent took the matter in further appeal to the Board of Revenue, Madhya Pradeah, at Gwalior which by its order dated 15/04/1964, held that the respondent could not be treated as a registered dealer in two States by virtue of the same registration certificate and if he had not obtained a certificate in the new State of Madhya Pradesh he should have been treated as a mere dealer and not as a registered dealer. Consequently, the Board of Revenue remanded the case to the Sales Tax Officer, Chhindwara, for a fresh assessment. Thereafter, at the instance of the appellant the Board of Revenue referred the following question of law to the High court of Madhya Pradesh : "whether a registered dealer, who had his head office at Nagpur, under the C. P. and Berar Sales Tax Act, 1947, continued to be a registered dealer in Madhya Pradesh, formed on 1/11/1956, after the reorganisation of the States if his business was partly carried on in the area which went to Maharashtra State and partly in the area which formed part of the new Madhya Pradesh ?" By its judgment dated 27/04/1966, the High court answered the question in favour of the respondent holding that if the registered dealer carried on business in places not disclosed in its registration certificate, he would have to be treated as an unregistered dealer vis-a-vis those places, and, therefore, the respondent could not be treated as a registered dealer with respect to the area comprised in the new State of Madhya Pradesh as no place of business from that area was specified in its certificate.

( 2 ) THE present appeal is brought by special leave from the judgment of the Madhya Pradesh High court dated 27/04/1966, in Miscellaneous Civil Case No. 288 of 1965. It is necessary to reproduce the relevant statutory provisions at this stage. Section 119 of the States Reorganisation Act, 1956 (37 of 1956) states:"the provisions of Part II shall not be deemed to have effected any change in the territ