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1962 (4) TMI 66 - HC - VAT and Sales Tax
Issues Involved:
1. Whether the registration certificate issued to the opponents can be deemed to be effective from 1st April, 1954. 2. Whether the opponents are entitled to a set-off under rule 11(2) of the Bombay Sales Tax (Exemptions, Set-off and Composition) Rules, 1954, despite non-compliance with rule 11(4). Issue-Wise Detailed Analysis: 1. Effective Date of Registration Certificate: The primary issue was whether the registration certificate issued to the opponents on 14th July, 1955, could be deemed effective from 1st April, 1954, due to the compounding of their offence under section 36(1)(a) of the Bombay Sales Tax Act, 1953. The Tribunal, by majority, held that the legal fiction in section 11(5) must be deemed to take effect from 1st April, 1954, onwards, thereby granting the opponents the status of registered dealers from that date. However, the High Court found it unnecessary to answer this question directly, as the entitlement to set-off was contingent on compliance with rule 11(4), which was not fulfilled by the opponents. 2. Entitlement to Set-Off: The second issue was whether the opponents were entitled to a set-off under rule 11(2) despite not complying with rule 11(4). Rule 11(2) allows set-off for purchases made by registered dealers, provided they maintain a register in Form (10) and submit quarterly statements in Form (12) within the prescribed time. The opponents did not comply with these requirements. The Tribunal's majority opinion was that strict compliance with rule 11(4) was not necessary due to the impossibility of maintaining the required records before obtaining registration. However, the High Court disagreed, stating that even if the opponents were deemed registered from 1st April, 1954, they were not entitled to set-off without complying with rule 11(4). The Court emphasized that the set-off is conditional upon fulfilling procedural requirements, which were not met by the opponents. Conclusion: The High Court concluded that the opponents were not entitled to the set-off claimed, as they did not comply with the mandatory requirements of rule 11(4). The Court did not address the first question regarding the retrospective effect of the registration certificate, as it was deemed unnecessary. The reference was answered in the negative, and the opponents were ordered to pay the costs of the Collector of Sales Tax.
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