1953 (1) TMI 15 - HC - VAT and Sales Tax

Issues Involved:
1. Limitation period for filing a petition under Section 25 of the Bihar Sales Tax Act.
2. Treatment of two firms as separate dealers under the Indian Partnership Act.
3. Application of the Bihar Sales Tax (Amendment) Act, 1949.
4. Applicability of the Amending Act to proceedings commenced before its extension to Chota Nagpur.

Detailed Analysis:

1. Limitation Period for Filing a Petition:
The first issue pertains to whether a petition filed under Section 25 of the Bihar Sales Tax Act after the expiry of 90 days from the date of the passing of the orders by the Board can be admitted. The court examined the proper construction of Section 25(1) of the Bihar Sales Tax Act, 1947, which states: "Within ninety days from the passing by the Board of Revenue of any order under sub-section (4) of Section 24 affecting any liability of any dealer to pay tax under this Act, such dealer may, by application in writing accompanied by a fee of one hundred rupees, require the Board to refer to the High Court any question of law arising out of such order." The court held that the period of limitation should be computed from the date of the passing of the order and not from the date of its communication to the assessee. This decision is consistent with the precedent set by the Division Bench in *Firm of Mohan Lal Hardeo Das v. Commissioner of Income-tax, Bihar and Orissa* (1930) I.L.R. 9 Pat. 172, which emphasized that the limitation period begins from the date of the order, not its communication.

2. Treatment of Two Firms as Separate Dealers:
The second issue questions whether, in the circumstances of this case and in consideration of the provisions of the Indian Partnership Act, the two firms should be treated as separate dealers, and whether Telu Ram Jain alone can be assessed to sales tax on the contracts obtained by him from the Central Public Works Department. The court found that the Sales Tax Officer and the Commissioner of Sales Tax did not accept the story of partnership as the real contractor was Telu Ram Jain, who was the moving spirit in both alleged firms. The Board of Revenue also doubted the bona fides of the alleged partnerships, considering them a convenience for Telu Ram and his partners to carry out the work done by the assessee. Thus, the two firms were not treated as separate dealers.

3. Application of the Bihar Sales Tax (Amendment) Act, 1949:
The third issue involves whether the Amending Act VI of 1949 can be applied, as it appears to be the intention of the legislature to correct the 1947 Act with effect from the date of its first publication, and whether the petitioners have been rightly assessed under the 1947 Act as amended by the 1949 Act. The court held that the provisions of the Ordinance and the amending Act have retrospective effect, meaning that the petitioners were rightly assessed under the 1947 Act as amended by the 1949 Act.

4. Applicability of the Amending Act to Proceedings Commenced Before its Extension:
The fourth issue questions whether the Amending Act, which was extended to Chota Nagpur on 22nd March, 1949, would govern the proceedings which were commenced on 13th January, 1949. The court did not find it necessary to express any opinion on this issue, as the first question of law was answered against the assessee, rendering the other questions moot.

Conclusion:
The court concluded that the first question of law should be answered against the assessee and in favor of the Sales Tax Department. Consequently, it was not necessary to address the other three questions of law. The assessee was ordered to pay the costs of the hearing, with the hearing fee fixed at ten gold mohurs.

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