1971 (9) TMI 178 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 5(2)(a)(ii) of the Punjab General Sales Tax Act, 1948 regarding deductions for sales made to a canceled registration certificate holder.

Analysis:
The judgment of the court addressed two connected General Sales Tax References made by the Sales Tax Tribunal, Haryana, involving the entitlement of a firm to deductions under section 5(2)(a)(ii) of the Punjab General Sales Tax Act, 1948, for sales made to a canceled registration certificate holder. The firm in question, a dealer in vegetable ghee, claimed deductions for sales made to a canceled registration certificate holder, arguing that the cancellation of the certificate had not been published in the Official Gazette as required under the relevant rules. The cancellation of the certificate was done before the sales were made, but the publication requirement was not met. The assessing authority created additional demands for the assessment years, leading to appeals and revisions that were unsuccessful, ultimately reaching the Sales Tax Tribunal for a decision on the legal questions raised.

The main contention of the assessee was that without publication in the Official Gazette, the cancellation of the certificate could not be considered effective, depriving the selling dealer of the benefit of deductions under section 5(2)(a)(ii). The Tribunal's view was that the power to cancel registration certificates under section 7 had been delegated to lower authorities, and the assessing authority was not obligated to follow the publication procedure under rule 12 since the cancellation was done under section 7(4) by the assessing authority itself. The court agreed with the Tribunal's interpretation, emphasizing that rule 12 applied only when the assessing authority did not have the power to cancel registration certificates under section 7(4), which was not the case here. The court highlighted that the delegation of powers under section 7(4) to the assessing authorities meant that the publication requirement in the Official Gazette was not necessary in this scenario.

Consequently, the court ruled in favor of the department and against the assessee, upholding the decision of the Sales Tax Tribunal. The judgment clarified that in cases where the assessing authority had been delegated the power to cancel registration certificates under section 7(4), the publication requirement in the Official Gazette as per rule 12 was not mandatory. The court found the reasoning of the Tribunal sound and rejected the arguments presented by the assessee's counsel, leading to the dismissal of the references with no order as to costs.