1951 (2) TMI 12 - HC - VAT and Sales Tax

Summary

Issues: Application for writs in the nature of mandamus, certiorari, and prohibition for canceling requisition, determination of whether the petitioners' firm is a dealer, the liability of the petitioners to pay tax as a dealer, the effect of the repeal of Section 18 of the Act on the petitioners' case, the maintainability of the application for mandamus without an allegation of demand of justice and its refusal.

Analysis:

The petitioners, engaged in the business of auctioneers, sought writs to cancel a requisition calling for the submission of returns and imposition of penalties under the Bengal Sales Tax Act. The petitioners claimed they were not dealers but auctioneers, not liable to tax. However, the court held that an auctioneer, by having dominion and possession of goods and completing sales, falls under the definition of a dealer as per the Act. The court emphasized that the tax is on the transaction of sale, not ownership of goods, making the petitioners liable for tax under Section 2(c) of the Act.

Regarding the effect of the repeal of Section 18 of the Act, the court noted that the Commercial Tax Officer's powers were enlarged, allowing him to determine dealer status. However, since the petitioners were already registered as dealers and had not taken steps to cancel their registration, they remained liable to pay tax. The court rejected the argument that the repeal of Section 18 left the petitioners without a remedy, emphasizing their existing registration status and consequent tax liability.

The court addressed the issue of the maintainability of the application for mandamus without an allegation of demand of justice and its refusal. Citing a previous case, the court held that the absence of such an allegation rendered the application for mandamus unsustainable. As a result, the petition was dismissed, and the rule discharged with costs, based on the binding precedent and the lack of essential allegations in the petition.

In conclusion, the court's decision affirmed the petitioners' status as dealers under the Act, their liability to pay tax, and the dismissal of the application due to the absence of crucial allegations, ultimately leading to the discharge of the rule with costs.