1959 (6) TMI 12 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the officer issuing the registration certificate.
2. Validity of the registration certificate and subsequent assessment.
3. Constitutional validity of the tax levied under the Central Provinces and Berar Sales Tax Act, 1947.

Detailed Analysis:

1. Jurisdiction of the Officer Issuing the Registration Certificate:
The appellant contended that the officer who granted the registration certificate had no jurisdiction as he was not validly appointed. The court examined the notification (exhibit P-16) which appointed District Excise Officers as Sales Tax Officers for the purpose of receiving applications for registration and issuing certificates under section 8 of the Act. The court concluded that the power to issue a certificate necessarily implies the power to consider whether such a certificate ought to be issued, and thus, the officer had the jurisdiction to grant the certificate.

2. Validity of the Registration Certificate and Subsequent Assessment:
The appellant argued that if the registration certificate was invalid, then all subsequent proceedings, including assessment, would be invalid. The court disagreed, stating that the validity of the registration is not relevant in considering the validity of the assessment or the liability to pay tax. The court emphasized that the charging section of the Act, section 4, lays down the incidence of taxation in the widest terms and is plenary. The provisions of sections 8 and 11(5) provide machinery for the effective realization of the tax and do not control the charging section. The court held that the assessment was valid regardless of the validity of the registration certificate.

3. Constitutional Validity of the Tax Levied:
The appellant argued that the tax levied by Act No. XXI of 1947 was not a sales tax but a corporation tax, falling under Entry No. 46 in List I of the Seventh Schedule to the Government of India Act, 1935, and Entry No. 85 of the Union List in the Constitution. The court examined the definitions of "corporation tax" and "sales tax" and concluded that the tax levied was on the sale of goods, not on income, and thus did not constitute a corporation tax. The court further held that the definitions of turnover and taxable turnover, read with the charging section, make it clear that the enactment aimed to tax sales of goods alone. The contention that the tax only sought to tax the consideration or price of goods, and not the sale itself, was also rejected.

Conclusion:
The appeal was dismissed, and the reference was answered as follows:
1. The authority who issued the registration certificate had jurisdiction to do so.
2. The validity of the registration certificate did not affect the validity of the assessment.
3. The tax levied under the Central Provinces and Berar Sales Tax Act, 1947, was constitutionally valid as a sales tax and not a corporation tax.

Final Orders:
- The appeal was dismissed with costs.
- The reference was answered as above, with no order as to costs for the reference.

Appeal dismissed.