1980 (2) TMI 241 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 3(3)(ii) of the Rajasthan Sales Tax Act regarding liability to pay tax on sales of specified goods and registration requirement.

Analysis:
The judgment of the Rajasthan High Court addressed 11 reference petitions concerning the liability of non-petitioner-assessees dealing in old motor parts to pay sales tax under section 3(3)(ii) of the Rajasthan Sales Tax Act. The assessing authorities contended that the assessees were liable to pay tax on the sale of old automobile parts and accessories as per section 3(3)(ii) and also required registration under section 6 of the Act. Despite the appealable nature of the orders, the assessees directly filed revision petitions before the Board of Revenue, which were allowed. Subsequently, the assessing authorities filed reference petitions under section 15(2) of the Act to refer the question of law to the High Court. The Board of Revenue rejected the applications, stating no substantial question of law existed for reference. However, the High Court directed the Board of Revenue to refer the question of law regarding the liability of the assessees to pay tax and register under the Act.

The key contention raised on behalf of the assessing authority was that the single Member of the Board of Revenue erred in interpreting section 3(3)(ii) of the Act. The section stipulates that any dealer in specified goods, as notified by the State Government, is liable to pay tax under the Act, regardless of turnover. A casual trader, as defined in section 2(ccc), involves occasional transactions of specified goods as notified by the State Government. The notification dated July 24, 1962, specified goods like utensils, automobile parts, watches, cycle parts, and livestock for taxation purposes. The amendment in 1965 renumbered the relevant clause as (ccc), making the notification applicable to the revised section.

The Court clarified that a casual trader or any trader dealing in notified goods under section 2(ccc) is liable to pay tax irrespective of turnover, even if exempt under section 3(1) of the Act. Such traders are also obligated to register under section 6 of the Act. The judgment emphasized that the Court would not investigate whether the goods were tax-paid in reference proceedings, but the assessee could present evidence to the assessing authority regarding tax payment status. Ultimately, all 11 petitions were answered in the affirmative, and parties were directed to bear their own costs.

In conclusion, the judgment provided a detailed analysis of the legal provisions under the Rajasthan Sales Tax Act concerning the liability of traders dealing in specified goods to pay tax and register under the Act. The Court's interpretation of section 3(3)(ii) and the definition of casual trader clarified the obligations of assessees, emphasizing tax liability regardless of turnover and the requirement for registration. The judgment underscored the importance of adhering to statutory provisions and presenting relevant evidence before the assessing authority in tax matters.