1956 (4) TMI 51 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of sales tax for the financial year 1947-48, liability for sales tax on jute and gunny bags despatches, validity of penalty for non-registration under section 13(5) of the Bihar Sales Tax Act, 1947.

Detailed Analysis:

Assessment of Sales Tax:
The case involved an assessment under section 13(5) of the Bihar Sales Tax Act, 1947, for the financial year 1947-48. The assessee, a firm engaged in various businesses, did not apply for registration as required by the Act. The Sales Tax Officer assessed the firm's gross turnover and taxable turnover, resulting in a sales tax liability of Rs. 19,514-2-0 along with a penalty of Rs. 956-12-0 for failure to register. The firm appealed the assessment, leading to a series of modifications by the Commissioner of Sales Tax and the Board of Revenue. The matter was then brought before the Patna High Court for a reference on specific legal questions related to the assessment.

Liability for Sales Tax on Jute and Gunny Bags Despatches:
The Sales Tax Officer based the assessment on despatches of 31,500 maunds of jute and 431 maunds of gunny bags made by the firm. The firm denied making these despatches, claiming they were done by partners or employees individually. However, the Sales Tax Officer, relying on railway forwarding notes and despatch registers, concluded that the despatches were made by the firm. The court upheld the assessment, stating that the property in goods could pass to the buyer at the time of the contract, even if despatches were made to the consignor's address. The court emphasized that the firm failed to provide evidence to refute the assessment, leading to the confirmation of the sales tax liability on the jute and gunny bags despatches.

Validity of Penalty for Non-Registration:
The firm challenged the penalty imposed for non-registration under section 13(5) of the Act, arguing against double penalization. However, no evidence of a previous penalty was presented, and the court deemed this argument raised for the first time. Consequently, the court upheld the penalty of Rs. 956-12-0 as legally valid, affirming the decision of the taxing authorities.

In conclusion, the Patna High Court affirmed the sales tax liability on the jute and gunny bags despatches, upheld the penalty for non-registration, and ruled in favor of the Department on all legal questions referred, entitling the Department to costs and a hearing fee. The judgment was delivered by Banerji, J., with concurrence from Choudhary R.K., J.