1953 (8) TMI 17 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of Section 24(2) of the Cochin Sales Tax Act for reference of questions of law to the High Court.
2. Validity of the refusal of licenses for the years 1123 and 1124.
3. Exemption on sales of bullion and specie based on license requirement.
4. Consideration of readiness and willingness for license application.
5. Impact of diversion of capital on turnover assessment.
6. Competency of the Commissioner to grant licenses with retrospective effect.
7. Burden of proof for exemption from sales tax.
8. Ignorance of relevant provisions as a valid excuse for exemption.
9. Jurisdiction of the Commissioner to decide questions of law.
10. Application of Section 24(1) for reference to the High Court.
11. Interpretation of "otherwise prejudicial" under Section 18 of the Act.

Analysis:

1. The petitioner sought reference of questions of law to the High Court under Section 24(2) of the Cochin Sales Tax Act, challenging the Commissioner's decisions on various issues arising from the assessment for the years 1123 and 1124.

2. The refusal of licenses for the years 1123 and 1124 was based on the Commissioner's jurisdiction to decide on granting licenses with retrospective effect, which was contested by the petitioner. The Commissioner's decision was deemed binding, regardless of its correctness.

3. The exemption on sales of bullion and specie was denied to the petitioner due to the absence of a license. The power to issue a license was distinguished from the power to levy tax, requiring the petitioner to prove license grant for tax exemption.

4. The petitioner's readiness and willingness for license application were not considered as a valid excuse for exemption, as ignorance of relevant provisions did not justify exemption from sales tax.

5. The impact of capital diversion on turnover assessment was discussed, emphasizing the reduction in turnover due to capital diversion, which was a key factor in the assessment.

6. The competency of the Commissioner to grant licenses with retrospective effect was challenged, but the Commissioner's decision was upheld as within his jurisdiction.

7. The burden of proof for exemption from sales tax rested on the petitioner, necessitating proof of license grant for tax exemption claims.

8. Ignorance of relevant provisions was not accepted as a valid excuse for exemption from sales tax, reinforcing the requirement for compliance with licensing regulations.

9. The jurisdiction of the Commissioner to decide questions of law was affirmed, with the Commissioner's decisions deemed binding on the parties.

10. The application of Section 24(1) for reference to the High Court was discussed, highlighting the conditions under which an application for reference could be made and the Commissioner's role in such referrals.

11. The interpretation of "otherwise prejudicial" under Section 18 of the Act was analyzed, with the Commissioner's decision to decline interference not deemed prejudicial to the petitioner, leading to the dismissal of the petitions without costs.