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1970 Supreme(Ori) 26
G.K. Misra, S. Acharya, JJ.
SUBHASH CHANDRA GHOSH
Versus
STATE OF ORISSA
S.J.Cs. Nos. 32 to 38 of 1966
Decided On: Decided On : 09-02-1970
K. C. Lenka, for the petitioner.
The Standing Counsel (Sales Tax), for the opposite party.
An application for registration under the Central Sales Tax Act, 1956, once allowed, is operative from the date of its filing, and the assessee cannot be treated as an unregistered dealer during the relevant period.
Headnote:
CENTRAL SALES TAX ACT, 1956 - REGISTRATION - APPLICATION FOR REGISTRATION - DEFECTS IN APPLICATION - OPPORTUNITY TO RECTIFY DEFECTS - GRANT OF REGISTRATION CERTIFICATE - OPERATIVE FROM DATE OF APPLICATION - ASSESSMENTS UNDER RULE 12(6) OF ORISSA RULES - NOT VALID.
Fact of the Case:
The assessee, a timber dealer, filed an application for registration under section 7 of the Central Sales Tax Act, 1956, on 20th February 1959. However, the application contained various defects. The assessee was given opportunities to rectify the defects, and the registration certificate was ultimately granted in December 1962. The department treated the assessee as an unregistered dealer from 20th February 1959 till December 1962 and assessed him to sales tax under rule 12(6) of the Central Sales Tax (Orissa) Rules, 1957.
Finding of the Court:
The court held that once the registration certificate was granted, it must be operative from the date of the application. It was not open to the department after the grant of the registration certificate to say that during the relevant period the assessee was an unregistered dealer. That conclusion was possible only if the application had been rejected for non-removal of defects when it could be said that no application for registration had been filed.
Issues: Whether the assessee was an unregistered dealer during the relevant period and whether the assessments made under rule 12(6) of the Orissa Rules were valid in law.
Ratio Decidendi: The court held that the assessee was not an unregistered dealer during the relevant period as the application for registration was ultimately allowed and must be operative from the date of its filing. Rule 12(6) of the Orissa Rules, which provides for assessment of unregistered dealers, has no application in this case.
Final Decision: The court answered the question of law in the negative, holding that the assessments made under rule 12(6) of the Orissa Rules were not valid in law.
JUDGMENT
MISRA, C.J. - The assessee carries on business in timber and has been assessed under rule 12(6) of the Central Sales Tax (Orissa) Rules, 1957 (hereinafter referred to as the Orissa Rules) for the quarters ending 31st of March, 1959 to 30th September, 1960. The facts leading to assessment under rule 12(6) may be mentioned in short. On 20th February, 1959, the assessee filed an application for registration under section 7 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act). Section 7(1) of the Act says that every dealer liable to pay tax under that Act shall, within such time as may be prescribed for the purpose, make an application for registration under that Act to such authority in the appropriate state as the Central Government may, by general or special order, specify, and every such application shall contain such particulars as may be prescribed. Rule 3 of the Central Sales Tax (Registration and Turnover) Rules, 1957 (hereinafter referred to as the Registration and Turnover Rules) provides for filing an application for registration under section 7 of the Act by a dealer to the notified authority in Form 'A'. Form 'A' prescribes various particulars. It appears that there were various defects. From time to time the assessee was given an opportunity to remove the defects, and ultimately the application for registration was granted in December, 1962. The department treated the assessee as not having been registered from 20th of February, 1959, till December, 1962, when the registration certificate was granted, and accordingly assessed to sales tax under rule 12(6). The assessee contended that as ultimately the registration certificate was granted it must be operative from the date of the application and that during the relevant period he must be treated as a registered dealer and not as an unregistered dealer. The assessee's stand was rejected although. Being aggrieved by the order of the Tribunal, the assessee asked for a reference. The reference application was rejected. The assessee approached this court. On 12th December, 1966, a Bench of this court was of opinion that the following question of law arose out of the appellate order :
"Where on the facts and circumstances of the case the assessments made under rule 12(6) of the Orissa Rules framed under the Central Sales Tax Act are valid in law."
2. The answer to the aforesaid question would depend upon a decision as to whether the assessee would be treated as a registered or unregistered dealer from 20th of February, 1959, till December, 1962.
3. Rule 5 of the Registration and Turnover Rules runs thus :
"5. (1) When the notified authority is satisfied, after making such enquiry as it thinks necessary, that the particulars contained in the application are correct and complete and the fee referred to in sub-rule (3) of the rule 4 has been paid, it shall register the dealer and grant him a certificate of registration in Form 'B' and also a copy of such certificate for every place of business within the State other than the principal place of business mentioned therein.
(2) When the said authority is not satisfied that the particulars contained in the application are correct and complete, or where the fee referred to in sub-rule (3) of rule 4 has not been paid, he shall reject the application for reasons to be recorded in writing :
Provided that before the application is rejected, the applicant shall be given an opportunity of being heard in the matter and, as the case may be, of correcting and completing the said particulars or complying with the requirements of sub-rule (3) of rule 4."
It is clear from sub-rule (2) that if the particulars in the application are not correct and complete of if the appropriate fee has not been paid, the application shall be rejected for reasons to be recorded in writing. This is, however, subject to the proviso that before the application is rejected, the applicant shall be given an opportunity of being heard in the
