1956 (7) TMI 43 - HC - VAT and Sales Tax

Summary

Issues: Validity of sales tax assessment under Bihar Sales Tax Act for the period prior to the notification extending the Act to Chota Nagpur Division.

The judgment addressed the argument put forward by the assessee's counsel regarding the validity of the sales tax assessment under the Bihar Sales Tax Act for the period preceding the notification extending the Act to Chota Nagpur Division. The counsel contended that the revenue authorities could not impose sales tax for the period from July 1, 1947, to March 31, 1949, as the Act was not applicable to Chota Nagpur Division during that time. However, the court found no substance in this argument based on the legislative provisions and notifications issued. The court analyzed the original enactment of sub-section (1) of section 4 of the Bihar Sales Tax Act, which set the threshold for tax liability based on the dealer's gross turnover. It was noted that the Act came into force on July 1, 1947, through a notification under sub-section (3) of section 1, and subsequently, another notification extended the Act to Chota Nagpur Division under section 92(1) of the Government of India Act.

The judgment highlighted the subsequent developments in the legislative framework, particularly the Bihar Sales Tax (Amendment) Act of 1948, which substituted sub-section (1) of section 4 with a revised provision, retrospectively applicable from the commencement of the Act. The court emphasized the significance of section 16 of the Amendment Act, which deemed the amendment to have always been a part of the Act from its commencement. This retrospective application was crucial in determining the applicability of the amended provision to Chota Nagpur Division. The court underscored that the Amendment Act was extended to Chota Nagpur Division through a notification by the Governor of Bihar under section 92(1) of the Government of India Act, dated March 22, 1949.

In conclusion, the judgment affirmed the legal validity of the sales tax assessment imposed on the assessee, emphasizing that the Act was applicable to Chota Nagpur Division with retrospective effect. The court ruled in favor of the State of Bihar, rejecting the argument against the validity of the assessment. Additionally, since the counsel for the assessee conceded the legal point during the proceedings, no order was made regarding costs. The reference was answered accordingly, settling the issue of the sales tax assessment under the Bihar Sales Tax Act for the period preceding the extension of the Act to Chota Nagpur Division.