1971 (11) TMI 150 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether a dealer registered under section 7(2) of the Central Sales Tax Act will be deemed to be a dealer registered under section 7(1) of the Central Sales Tax Act?
2. Whether the penalty imposed under section 18(6) of the M.P. General Sales Tax Act read with section 9(3) of the Central Sales Tax Act has been rightly set aside?

Analysis:
1. The case involved a dealer engaged in the business of manufacturing and selling water for injections and medicines. The dealer was registered under the M.P. General Sales Tax Act and had obtained registration under section 7(2) of the Central Sales Tax Act but not under section 7(1). The dispute arose regarding the dealer's classification as an unregistered dealer for assessment purposes. The Tribunal set aside the penalty imposed, considering the dealer's registration under section 7(2) of the Central Sales Tax Act. However, the High Court disagreed, emphasizing the distinct purposes of registration under section 7(1) and section 7(2). The Court held that registration under section 7(2) does not equate to registration under section 7(1) for inter-State sales, thereby upholding the penalty.

2. The Court delved into the provisions of the Central Sales Tax Act to differentiate between registration under section 7(1) and section 7(2). It highlighted the mandatory nature of registration under section 7(1) for dealers liable to pay tax under the Act, contrasting it with the voluntary nature of registration under section 7(2) for dealers not liable to pay tax under the Act. The Court elucidated that the concessional rate of tax under section 8 of the Act is linked to registration under section 7(1), emphasizing the distinct purposes and advantages associated with each type of registration. Consequently, the Court concluded that a dealer registered under section 7(2) cannot be deemed as registered under section 7(1) and upheld the penalty imposed under section 18(6) of the M.P. General Sales Tax Act read with section 9(3) of the Central Sales Tax Act.

3. In conclusion, the High Court answered the first question in the negative, ruling that registration under section 7(2) does not fulfill the requirement of registration under section 7(1) of the Central Sales Tax Act. Subsequently, the Court answered the second question by affirming that the penalty imposed under the relevant sections was rightfully upheld. The Court directed the parties to bear their own costs due to the absence of the assessee during the proceedings, thereby concluding the reference accordingly.