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PATNA HIGH COURT
Narasimham and D.N.Jha JJ.
Jamuna Flour And Oil Mills (Private) Ltd.
Versus
State Of Bihar
Tax Case No. 28 of 1966 ;
Decided On : JANUARY 17, 1968
BIHAR SALES TAX ACT, 1959 - SEC. 14(3), 15, 16(4), 20(2), 33(3) - SEC. 4(3)(B), 7(2)(A)(I), (B), (B) PROVISO 2 - BIHAR SALES TAX RULES, 1959 - RULE 8(C), (D) - REBATE - ELIGIBILITY - RETURN FILED ONE DAY LATE - IMPLIED EXTENSION OF TIME - SALE OF BRAN OUTSIDE BIHAR - TAXABLE TURNOVER - SECOND PROVISO TO SEC. 7(2)(B) - APPLICABILITY - PURCHASE OF RAW MATERIALS FREE OF SALES TAX - SUBSEQUENT SALE OF MANUFACTURED PRODUCT IN CONTRAVENTION OF DECLARATION - LIABILITY.
Fact of the Case:
The petitioner, a registered dealer, purchased raw wheat free of sales tax for the purpose of manufacturing atta, maida, and suji. The petitioner sold the bran, a byproduct of the milling process, outside Bihar. The Sales Tax Tribunal held that the sale price of the bran should be included in the petitioner's taxable turnover, relying on the second proviso to Clause (b) of Sub-section (2) of Sec.7 of the Bihar Sales Tax Act, 1959.
Finding of the Court:
The court held that the petitioner was entitled to a rebate under Sec.15 of the Act, even though the return was filed one day late, as the delay was due to circumstances beyond the petitioner's control. The court also held that the second proviso to Clause (b) of Sub-section (2) of Sec.7 of the Act did not apply to the sale of bran, as the purchase of raw materials by a dealer free of sales tax would come under Clause (a) of Sub-section (2) of Sec.7, and that Clause (b) of that Sub-section (including the proviso) will apply only to those sales of goods to a registered dealer who subsequently sells them (without their undergoing any change) to other persons for the purposes mentioned in sub-clauses (i) and (ii) of that clause.
Issues: 1. Whether the petitioner was entitled to a rebate under Sec.15 of the Act, even though the return was filed one day late? 2. Whether the second proviso to Clause (b) of Sub-section (2) of Sec.7 of the Act applied to the sale of bran?
Ratio Decidendi: 1. The court held that the petitioner was entitled to a rebate under Sec.15 of the Act, even though the return was filed one day late, as the delay was due to circumstances beyond the petitioner's control. The court relied on the provisions of Sec.14(3) of the Act, which empowers the taxing authority to extend the period for the submission of the return if the dealer satisfies the authority that he was unable to furnish the return within the prescribed period for a reasonable cause. 2. The court held that the second proviso to Clause (b) of Sub-section (2) of Sec.7 of the Act did not apply to the sale of bran, as the purchase of raw materials by a dealer free of sales tax would come under Clause (a) of Sub-section (2) of Sec.7, and that Clause (b) of that Sub-section (including the proviso) will apply only to those sales of goods to a registered dealer who subsequently sells them (without their undergoing any change) to other persons for the purposes mentioned in sub-clauses (i) and (ii) of that clause.
Final Decision: The court answered both questions in the negative, holding that the petitioner was entitled to a rebate under Sec.15 of the Act and that the sale price of the bran should not be included in the petitioner's taxable turnover.
Narasimham, C. J.
1. As directed by this Court on the 16th September, 1966, the Bihar Sales Tax Tribunal stated the following case for the opinion of this Court under Sec.33 (3) of the Bihar Sales Tax Act, 1959 (hereinafter referred to as the Act) :
(1) Whether the order of the Tribunal to the effect that the turnover of Rs.51,137.50 representing sale of bran on consignment basis out of Bihar should be included in the taxable turnover of the petitioner in view of the second proviso to Sec.7 of the Bihar Sales Tax Act, 1959, and taxed at the rate applicable on account of sales in Bihar, is legally valid (2) Whether the order of the Tribunal rejecting the claim of rebate for the quarter ending 30th June, 1961, is in accordance with law ?
2. Question No. (2) may be taken up first. The petitioner-assessee claimed rebate under Sec.15 of the Act for the quarter ending 30th June, 1961. It was not denied that it paid the tax due before the 31st July, 1961 ; but the return was actually filed by it on the 1st August, 1961. The taxing authority held that, for the purpose of eligibility for rebate under Sec.15 of the Act, the assessee must fulfil two conditions, viz. , (1) the tax due for the quarter must be paid before the end of the succeeding month, and (2) the return also must be filed by the end of the succeeding month. Hence, the claim for rebate was rejected.
3. Section 14 (1) of the Act requires a registered dealer to furnish the return within the prescribed period. Rule 10 (2) of the Bihar Sales Tax Rules, 1959, says that the return shall be filed within one calendar month of the expiry of the period to which it relates. Hence, under normal circumstances the return for the quarter ending the 30th June, 1961, should be filed by the 31st July, 1961. But Sub-section (3) of Sec.14 confers power on the taxing authority to extend the period for the submission of the return if the dealer satisfies the authority that he was unable to furnish the return within the prescribed period for a reasonable cause. Under section 16 of the Act, assessment is made mainly on the basis of the return filed either within the prescribed period or within the extended period as permitted by Sec.14 (3 ). Sub-section (4) of Sec.16 says that, if the return is not furnished within the aforesaid period (including the extended period), the taxing authority may assess the dealer to the best of his judgment. Here, admittedly, the petitioner was not assessed under the best of judgment principle, but was assessed on the return submitted by it. Hence, though the return was submitted one day late, viz. , on the 1st August, 1961, nevertheless, as the assessment was based on that return, it must be held that, impliedly, the period for furnishing the return was extended by one day, as permitted by Sub-section (3) of section 14. It is true that the record does not show that any express order was passed by the taxing authority regarding its satisfaction about the existence of reasonable cause for the failure to furnish the return by the 31st July, 1961 ; but, as pointed out by the Privy Council in Mohammad Akbar Khan V/s. Court of Wards (1934) I. L. R.15 Lah.216, on construction of Sec.5 of the Limitation Act, in some circumstances, the passing of an express order is not necessary. See also Sree Sree Iswar Sridhar Jew V/s. Jnanendra Nath Ghos A. I. R.1960 Gal.718 at p.720, para.11.
4. The relevant portion of Sec.15 may now be quoted : a rebate at the rate of one per centum of the amount of tax admitted to be due in the return furnished under Sub-section (1) of Sec.14 in the prescribed manner and within the prescribed or extended period shall be allowed to a registered dealer who has paid such amount according to the provisions of Sub-section (2) of Sec.20. Even if the view taken by the Tribunal be accepted as correct, it would necessarily follow that the assessee has fulfilled both the conditions because, for the reasons given in the earlier paragraph, it must be pr
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