1971 (9) TMI 167 - HC - VAT and Sales Tax

Issues Involved:
1. Initiation of proceedings under Section 13(5) of the Bihar Sales Tax Act, 1947.
2. Limitation period for assessment under Section 13(5) of the Bihar Sales Tax Act, 1947.
3. Imposition of sales tax on sugarcane sales in light of Section 29(1) of the Bihar Sugar Factories Control Act, 1937.

Detailed Analysis:

1. Initiation of Proceedings under Section 13(5) of the Bihar Sales Tax Act, 1947
The main issue was whether the initiation of proceedings under Section 13(5) of the Act began with the order dated September 28, 1959, directing the issuance of notice, or with the actual issuance of the notice on January 10, 1962. The Tribunal held that the initiation of proceedings began when the notice was issued on January 10, 1962. The court agreed, stating that "initiation of proceedings for assessment" means when a notice is issued to the dealer, not merely when an internal order to issue such a notice is made. The court emphasized that initiation must be understood in the context of achieving the objective of informing the dealer about the assessment, which only occurs when the notice is actually issued.

2. Limitation Period for Assessment under Section 13(5) of the Bihar Sales Tax Act, 1947
The court examined whether any part of the assessment for the period from April 1, 1955, to June 30, 1959, was barred by limitation under Section 13(6) of the Act. The Tribunal had interpreted the term "period" as the entire block of time during which the dealer failed to register. However, the court found that "period" should be understood as a unit of one year. As a result, the assessment for the periods from April 1, 1955, to March 31, 1956, and from April 1, 1956, to March 31, 1957, were barred by limitation since the proceedings were initiated on January 10, 1962, beyond the four-year limitation period.

3. Imposition of Sales Tax on Sugarcane Sales in Light of Section 29(1) of the Bihar Sugar Factories Control Act, 1937
The dealer argued that the imposition of sales tax on sugarcane sales was barred by Section 29(1) of the Control Act, claiming it amounted to double taxation. The Tribunal rejected this argument, stating that the imposition of cess under the Control Act and sales tax under the Sales Tax Act were two separate imposts authorized under different entries of the Constitution of India. The court concurred, referencing the Supreme Court's decision in M/s. Mathra Parshad and Sons v. State of Punjab, which upheld the validity of dual taxation. The court also noted that no cess had been levied under the Control Act during the relevant period, making the issue of double taxation moot.

Summary of Judgments:
- Initiation of Proceedings: The Tribunal's decision that proceedings under Section 13(5) were initiated on January 10, 1962, was upheld.
- Limitation Period: The court held that the assessment for the periods from April 1, 1955, to March 31, 1956, and from April 1, 1956, to March 31, 1957, were barred by limitation.
- Imposition of Sales Tax: The court ruled that Section 29(1) of the Control Act did not bar the imposition of sales tax on sugarcane sales under the Sales Tax Act.

Conclusion:
The court provided clear interpretations and upheld the Tribunal's findings on the initiation of proceedings and the imposition of sales tax while ruling that certain assessments were barred by limitation. The decisions were based on a thorough analysis of the relevant statutory provisions and judicial precedents.

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