1957 (1) TMI 22 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the assessment of tax under section 10(5) of the Bihar Sales Tax Act, 1944.
2. Legality of the imposition of penalty under section 10(5) of the Bihar Sales Tax Act, 1944.
3. Whether the assessment of tax for the period from 1st April, 1946, to 31st March, 1947, is barred by limitation under the proviso to section 10(6) of the Bihar Sales Tax Act, 1944.
4. Legality and validity of the assessment of tax under section 13(5) of the Bihar Sales Tax Act, 1947.

Detailed Analysis:

1. Legality of the Assessment of Tax under Section 10(5) of the Bihar Sales Tax Act, 1944:
The court examined whether the assessment of tax upon the petitioner under section 10(5) was legal. The petitioner argued that the assessment should have been made upon the firm located at Jamui, not upon the firm at Barh. The court found that the Hindu joint family owned both businesses, and thus, the dealer carrying on both businesses was the same. The court held that the assessment under section 10(5) was validly made upon the petitioner, as the Hindu joint family was the dealer carrying on both businesses within the meaning of section 2(c) of the Act.

2. Legality of the Imposition of Penalty under Section 10(5) of the Bihar Sales Tax Act, 1944:
The court considered whether the imposition of the penalty was legal. The petitioner contended that the business at Barh was an extension of the Jamui business and should not be treated separately for registration purposes. The court found that the Hindu joint family had not applied for registration of the Barh business as required by rule 6 of the Bihar Commercial Taxes Manual. Consequently, the provisions of section 10(5) were applicable, and the imposition of the penalty was deemed legal.

3. Whether the Assessment of Tax for the Period from 1st April, 1946, to 31st March, 1947, is Barred by Limitation under the Proviso to Section 10(6) of the Bihar Sales Tax Act, 1944:
The court evaluated whether the assessment was barred by limitation. Section 10(6) stipulates that no order assessing the amount of tax due from a dealer shall be passed later than 24 months from the expiry of the period. The assessment was made on 21st June, 1948, for the period from 1st April, 1946, to 31st March, 1947. The court concluded that the assessment was made within the prescribed period and was not barred by limitation.

4. Legality and Validity of the Assessment of Tax under Section 13(5) of the Bihar Sales Tax Act, 1947:
The court addressed the assessment under section 13(5) of the 1947 Act. The appellate court clarified that the assessment up to June 1947 was under the 1944 Act, and the subsequent period was under the 1947 Act. The court found no prejudice caused by this, as the assessment for the period up to June 1947 could be made under the 1944 Act, as provided in section 32 of the 1947 Act. Therefore, the assessment under section 13(5) was deemed legal and valid.

Conclusion:
The court answered all the questions against the petitioner and in favor of the Sales Tax Department. The assessment of tax and the imposition of penalties were found to be legal and valid. The assessment was not barred by limitation, and the assessment under section 13(5) of the 1947 Act was also upheld. The petitioner was ordered to pay the costs of the references, with a hearing fee of Rs. 100 in each case.

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