1968 Supreme(Pat) 113

PATNA HIGH COURT
N.L.Untwalia and S.Wasiuddin JJ.
Basta Colla Colliery Co.(P) Ltd.
Versus
State Of Bihar
Tax Case No. 24 of 1965 ;
Decided On : JULY 04, 1968

The requirement of Rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, for attachment of the declarations and the certificates with the returns imposes a time-limit or fixes the; period within which such declarations and certificates have got to be filed. The Central Act did not empower the Government to frame a rule fixing a rigid time for the purpose of furnishing declarations and certificates to carry out the purposes of the Act in accordance with Sub-section (4) of Section 8 of the Central Act.

Headnote:

CENTRAL SALES TAX - Bihar Sales Tax Act, 1959 (Bihar Act 1959) - Central Sales Tax Act, 1956 (Central Act 74 of 1956) - Rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957 - Whether the denial of concessional rate of tax under Section 8 of the Central Sales Tax Act, 1956, on sales covered by declarations of C form and D form, if filed before the appellate authority is valid in law.

Fact of the Case:

The assessee, Messrs. Basta Colla Colliery Co, (P) Ltd., submitted returns to the proper assessing authority disclosing its gross turnover on account of inter-State sales. The assessee was served with a notice to produce its account books in support of the returns submitted by it. The assessee appeared before the Assessing authority but did not produce the account books for the year 1959-60, the period in question. The assessing authority did not enhance the turnover of the assessee in respect of the inter-State sales, but rejected its claim to be taxed at the concessional rate of one per cent under Section 8(1) of the Central Act (74 of 1956), on the total turnover of Rs. 22,15,253.64 P. on account of the sales said to have been made to the Govt. and to registered dealers in the four quarters of 1959-60. The assessee went up in appeal under Sec.30 of the Bihar Act (19 of 1959) before the Deputy Commissioner. The Deputy Commissioner dismissed the appeal. The assessee went up in revision before the Board under Sec.31 of the Bihar Act (19 of 1959). The Board has dismissed the revision holding that non-observance of the rules by the assessee in the matter of production of declarations in Form C and the certificates in Form D which inevitably deprive it of the benefit of concessional tax under Section 8 (1) of the Central Act. The assessee's application under Sec.33(1) of the Bihar Act (19 of 1959) filed before the Board eventually came to be disposed of by the Commercial Taxes Tribunal, Bihar. It was rejected by it. On being directed by the High Court, the Tribunal has now stated the case on the question of law mentioned above.

Finding of the Court:

The Court held that Rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, requiring the registered dealer who claims to have made sales to another registered dealer or to Govt. to attach and file the declarations in Form C and the certificates in Form D with his return in Form I, is constitutionally invalid. The Court further held that the assessee could be and ought to have been given an opportunity to furnish to the assessing authority declarations and certificates in the prescribed forms after the filing of the returns and before the passing of the assessment order. It could also be given an opportunity to furnish them even after the passing of the order if the appellate authority or the revisional authority could be satisfied that sufficient cause had been made out for giving such an opportunity.

Issues: 1. Whether Rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, requiring the registered dealer who claims to have made sales to another registered dealer or to Govt. to attach and file the declarations in Form C and the certificates in Form D with his return in Form I, is constitutionally valid? 2. Whether the assessee could be and ought to have been given an opportunity to furnish to the assessing authority declarations and certificates in the prescribed forms after the filing of the returns and before the passing of the assessment order?

Ratio Decidendi: 1. The Court held that the requirement of Rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, for attachment of the declarations and the certificates with the returns imposes a time-limit or fixes the; period within which such declarations and certificates have got to be filed. The Central Act did not empower the Government to frame a rule fixing a rigid time for the purpose of furnishing declarations and certificates to carry out the purposes of the Act in accordance with Sub-section (4) of Section 8 of the Central Act. The expression "in the prescribed manner was not wide enough to embrace within its ambit the power to prescribe the time-limit for furnishing the declarations and the certificates. 2. The Court held that the assessee could be and ought to have been given an opportunity to furnish to the assessing authority declarations and certificates in the prescribed forms after the filing of the returns and before the passing of the assessment order. It could also be given an opportunity to furnish them even after the passing of the order if the appellate authority or the revisional authority could be satisfied that sufficient cause had been made out for giving such an opportunity.

Final Decision: The Court answered the question of law refrained by it partly in favour of the assessee but finally and effectually against it in the manner indicated above.