1969 (9) TMI 104 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of rules regarding deduction of credit sales for sales tax assessment.
2. Review jurisdiction of the Tribunal in rectifying orders of the Board of Revenue.

Analysis:
1. The judgment revolves around the interpretation of rules concerning the deduction of credit sales for sales tax assessment. The assessee, M/s. Budhram Kashiram, had credit sales to registered dealers, seeking deduction under section 5 of the Bihar Sales Tax Act, 1947. The assessing officer rejected the claim due to the absence of a declaration required under rule 18 of the Bihar Sales Tax Rules, 1949. Despite appeals, the Board of Revenue upheld the requirement of producing the declaration. The Tribunal also dismissed the dealer's contention, leading to a review application. The Tribunal's decision was based on the necessity of the declaration for claiming exemption on credit sales. The High Court was approached to determine if the Tribunal was justified in refusing to rectify the Board's order under section 24(5)(a) of the Act.

2. The Tribunal's decision was influenced by the Supreme Court's ruling in a similar case, emphasizing the importance of the declaration but allowing for exemption based on other evidence if the Sales Tax Officer is satisfied. The Court highlighted that the Board of Revenue lacked the power to review its order, and hence, the Tribunal could not possess a higher power. The Tribunal's jurisdiction for review was found to be limited by the provisions of the Bihar Sales Tax Act, 1947. The Court referenced a Supreme Court decision to support the Tribunal's stance on the review jurisdiction, emphasizing the distinction between an erroneous decision and an error apparent on the face of the record.

3. The central issue was whether the dealer was obligated to produce a declaration for credit sales to claim deduction from the taxable turnover. The Tribunal differentiated the Orissa case, stating that the selling dealer could be granted exemption without the declaration if the Sales Tax Officer was convinced by other evidence. However, without such satisfaction, the dealer could not benefit from the exemption. The Tribunal referred to rule 18 of the Bihar Sales Tax Rules, highlighting the conditions for claiming deduction from the gross turnover for sales to registered dealers. The absence of material supporting the goods' use as required by the rule led to the Tribunal's decision being upheld, resulting in the question being answered against the assessee.

In conclusion, the judgment elucidates the significance of adhering to statutory requirements, specifically the production of declarations for claiming deductions on credit sales for sales tax assessment. The Tribunal's jurisdiction for review was delineated within the framework of the applicable sales tax legislation, emphasizing the need for compliance with the rules governing such assessments.