1957 (1) TMI 24 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner is a dealer within the meaning of section 2(c) of the Bombay Sales Tax Act.
2. Whether sub-section (5) of section 11 or section 11A of the Act was the proper provision to be applied in this case.

Analysis:
1. The case involves a reference made by the Bombay Sales Tax Tribunal regarding the status of the petitioner as a dealer under the Bombay Sales Tax Act. The petitioner, a private limited company engaged in importing and selling cycles and accessories, had a clearing agent in Bombay during the relevant period. The Sales Tax Authorities in Bombay assessed the petitioner for sales tax on transactions where goods were delivered in Bombay. Despite the petitioner's argument that contracts were entered into at Nagpur, lower authorities found that sales took place in Bombay, making the petitioner a dealer under section 2(c) of the Act, which defines a dealer as any person carrying on the business of selling goods in the Province of Bombay. The Tribunal's decision was upheld, concluding that the petitioner was indeed a dealer based on the factual findings.

2. The second issue pertains to the appropriate provision to be applied in the assessment of the petitioner. The petitioner contended that section 11A of the Sales Tax Act should apply instead of section 11(5) as determined by the Sales Tax Authorities. Section 11(5) deals with cases where a dealer liable to pay tax has failed to apply for registration. On the other hand, section 11A addresses cases of escaped assessment or under-assessment. The Court held that the petitioner's situation fell under section 11(5) due to the failure to register before 1952. The Court reasoned that section 11A is not applicable as it requires a return by the dealer, which was not the case here. Therefore, the proper provision to be applied was deemed to be sub-section (5) of section 11. Consequently, the Court answered both questions in favor of the Sales Tax Authorities, requiring the petitioner to bear the costs of the respondent.

In conclusion, the judgment affirmed the petitioner's status as a dealer under the Bombay Sales Tax Act and determined that sub-section (5) of section 11 was the appropriate provision for the assessment in this case, dismissing the petitioner's contentions regarding section 11A.