1959 (7) TMI 37 - HC - VAT and Sales Tax

Issues Involved:
1. Estoppel against the Sales Tax Department
2. Requirement to show total turnover in registration application
3. Liability to pay sales tax due to failure to disclose aggregate turnover
4. Proper section for assessment under the Bombay Sales Tax Act

Issue-wise Detailed Analysis:

1. Estoppel Against the Sales Tax Department:
The Tribunal initially held that the Sales Tax Department was estopped from claiming sales tax for the period from 1st October, 1946, to 21st March, 1950, due to the department's refusal to grant a registration certificate for the Dholka shop. The assessee argued that this refusal misled them into believing that no registration was required, thus they paid tax on purchases instead of sales. However, the High Court rejected this plea of estoppel, stating that the failure to grant registration was due to the assessee's own conduct of not disclosing the total turnover. The court emphasized that the Sales Tax Officer was not bound to issue a registration certificate when the turnover did not exceed the prescribed limit, and the assessee could not claim prejudice due to their own non-disclosure.

2. Requirement to Show Total Turnover in Registration Application:
The court examined whether the opponents were required to disclose the total turnover of sales at both their business places in their registration application under Form II of the Bombay Sales Tax Rules, 1946. The court held that the liability to pay sales tax is in respect of the entire business, and thus, it was necessary to disclose the gross turnover of the entire business, even if conducted at different places. The court affirmed that the assessee was required to show the total turnover, and failure to do so justified the non-issuance of the registration certificate by the Sales Tax Officer.

3. Liability to Pay Sales Tax Due to Failure to Disclose Aggregate Turnover:
Given the affirmative answer to the requirement of disclosing total turnover, the court held that the opponents were liable to pay sales tax on their turnover of sales at the Dholka shop from 1st October, 1946, to 21st March, 1950. The court reasoned that the failure to disclose aggregate turnover meant the assessee could not claim exemption from tax liability for that period.

4. Proper Section for Assessment Under the Bombay Sales Tax Act:
The assessee contended that the assessment should have been made under section 11A instead of section 11(5) of the Bombay Sales Tax Act, 1953. The court, however, did not address this contention in detail due to the small amount in dispute, following the submission by the Department's counsel. Consequently, the court did not answer questions (2) and (3) related to this issue in Reference No. 21 of 1958.

Conclusion:
In Sales Tax Reference No. 18 of 1958, the court answered:
1. The Tribunal was not right in holding that the applicant was estopped from claiming sales tax for the specified period.
2. The opponents were required to show their total turnover in the registration application.
3. The opponents' failure to reveal their aggregate turnover made them liable to tax for the specified period.
4. The opponents were liable to pay sales tax for the specified period.

In Sales Tax Reference No. 21 of 1958, the court answered the first question in the negative and did not answer the remaining questions due to the small amount in dispute.

Costs:
The assessee was ordered to pay the costs of the State in Reference No. 18 of 1958, quantified at Rs. 250. No order as to costs was made in Reference No. 21 of 1958, and the fees deposited by the assessee were to be refunded.

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