1978 (11) TMI 131 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of registration requirements under section 7(1) and 7(2) of the Central Sales Tax Act. Liability for penalty under section 18(6) of the M.P. General Sales Tax Act for failure to obtain registration under section 7(1) of the Central Sales Tax Act.

Analysis:
The judgment by the High Court of Madhya Pradesh addressed a reference made by the Board of Revenue regarding the liability of an assessee for penalty under section 18(6) of the M.P. General Sales Tax Act for failing to apply and obtain registration under section 7(1) of the Central Sales Tax Act. The facts involved a dealer assessed under both Acts for a specific period, with a penalty imposed for not registering under section 7(1) of the Central Sales Tax Act. The appellate authorities adjusted the quantum of assessment and penalty, leading to a second appeal where the penalty was set aside. The Commissioner of Sales Tax appealed this decision, resulting in the reference to the High Court.

The Court analyzed the registration requirements under section 7(1) and 7(2) of the Central Sales Tax Act, emphasizing that registration under section 7(1) is necessary for dealers engaged in inter-State trade. The Court cited a previous case to clarify that registration under section 7(2) does not fulfill the requirements of section 7(1) and failing to register under section 7(1) can lead to penalties. It was established that the assessee in the present case had not registered under section 7(1), making them liable for penalties under section 18(6) of the M.P. General Sales Tax Act.

In conclusion, the Court answered the reference question in the negative, indicating that registration under section 7(2) of the Central Sales Tax Act is not sufficient to exclude liability for penalties under section 18(6) of the M.P. General Sales Tax Act. The judgment highlighted the importance of complying with the specific registration requirements under the Acts to avoid penalties. The parties were directed to bear their own costs, and the reference was answered accordingly.