1979 (3) TMI 188 - HC - VAT and Sales Tax

Summary

Issues:
1. Retrospective validation of registration certificate affecting rights and liabilities of other dealers.
2. Entitlement of a dealer to claim deduction for sales made to a registered dealer before the actual issuance of the registration certificate.

Analysis:

1. The case involved a reference under section 13(1) of the M.B. Sales Tax Act, where the Commissioner of Sales Tax referred questions of law to the High Court for opinion. The first question was whether retrospective validation of a registration certificate from 15th August, 1958, affects the rights and liabilities of other dealers from the same date. The second question pertained to the entitlement of a dealer to claim deduction for sales made to a registered dealer before the actual issuance of the registration certificate.

2. The facts of the case revealed that the assessee, a registered dealer in cotton, had made sales to M/s. Kotak & Co. before the actual issuance of the registration certificate. The order for registration was passed on 26th August, 1958, and the certificate was issued on 8th September, 1958, with retrospective effect from 15th August, 1958. The key issue was whether the sales made by the assessee to M/s. Kotak & Co. should be considered transactions with a registered dealer.

3. The relevant provisions of section 6 of the Act were examined, which mandated that a dealer must be registered to carry on business. The Supreme Court's decision in Assessing Authority v. Patiala Biscuits Mfrs. P. Ltd. was cited, where it was held that a dealer awaiting registration approval should be treated as a registered dealer during that period. The department's counsel conceded that based on this precedent, the sales to M/s. Kotak & Co. should be considered sales to a registered dealer.

4. The High Court's judgment affirmed that the sales made by the assessee to M/s. Kotak & Co. were indeed transactions with a registered dealer, entitling the dealer to claim deduction for those sales. Consequently, the answer to the second question was in the affirmative and in favor of the assessee. As a result, it was deemed unnecessary to answer the first question, and the parties were directed to bear their own costs for the reference.

5. In conclusion, the High Court's decision clarified the entitlement of a dealer to claim deductions for sales made to a registered dealer before the actual issuance of the registration certificate, based on the legal provisions and precedents cited during the case analysis.