1985 (12) TMI 347 - HC - VAT and Sales Tax

Issues Involved:

1. Imposition of penalties under section 16(1)(c) of the Rajasthan Sales Tax Act, 1954.
2. Classification of urad and gram as cattle feed.
3. Bar of limitation for assessments.
4. Liability to pay purchase tax under section 5A of the Act.
5. Levy of sales tax on bardana.
6. Validity of interest levy under section 11B.
7. Validity of assessments based on returns and notices.

Issue-wise Detailed Analysis:

1. Imposition of Penalties under Section 16(1)(c):
The Board upheld the imposition of penalties on the dealer-assessee under section 16(1)(c) of the Act. The dealer-assessee contended that penalties could not be imposed without proving that there was no reasonable cause for not furnishing the prescribed returns. The court maintained the Board's finding that penalties were rightly imposed.

2. Classification of Urad and Gram as Cattle Feed:
The dealer-assessee argued that urad and gram should be classified as cattle feed and thus be exempt from sales tax under item No. 9 of the Schedule appended to the Act. The court referred to the common parlance test established in previous judgments and concluded that urad and gram are primarily used for human consumption and only incidentally as cattle feed. Therefore, these commodities do not qualify for exemption under item No. 9 of the Schedule.

3. Bar of Limitation for Assessments:
The dealer-assessee argued that the assessments were barred by time. The court noted that the Board had stated that proceedings were commenced within the 8-year limitation period as required by section 12 of the Act. The court found that the Board had not specifically addressed whether the assessments were validly made under section 10 of the Act. The court set aside the Board's findings on this issue and directed the Sales Tax Tribunal to redecide the matter.

4. Liability to Pay Purchase Tax under Section 5A:
The Board found that the dealer-assessee was liable to pay purchase tax under section 5A of the Act. The dealer-assessee contended against this liability, but the court did not find it necessary to examine this contention in detail, given the remand to the Sales Tax Tribunal for re-evaluation of the assessments.

5. Levy of Sales Tax on Bardana:
The dealer-assessee contested the levy of sales tax on bardana. The Board had upheld the Deputy Commissioner's finding that the sale of old gunny bags was subject to sales tax. The court affirmed this finding, noting that the dealer-assessee failed to show any provision exempting the sale of old gunny bags from sales tax.

6. Validity of Interest Levy under Section 11B:
The Board upheld the levy of interest by the assessing authorities. The dealer-assessee argued against the validity of this levy, but the court did not find it necessary to examine this contention in detail due to the remand for re-evaluation of the assessments.

7. Validity of Assessments Based on Returns and Notices:
The dealer-assessee argued that the assessments were invalid due to improper returns and notices. The court reviewed the provisions of sections 7(1), 7A, 10(1)(a), 10(1)(b), 10(2), and 10B of the Act and noted that the Board had not specifically addressed these issues. The court set aside the Board's findings and directed the Sales Tax Tribunal to re-evaluate the assessments in light of the relevant provisions.

Conclusion:
The court maintained the findings that urad and gram are not cattle feeds and that sales tax is payable on the sale of gunny bags. The direction regarding ajwain, sua, and methi, and the setting aside of penalties under section 7AA were also maintained. The court remanded the case to the Sales Tax Tribunal to redecide the seven revisions filed by the dealer-assessee against the orders of the Deputy Commissioner, focusing on the validity of the assessments under the relevant provisions. The applications under section 15 of the Act, considered as revisions under section 13(10) of the Amendment Act, were disposed of accordingly, with each party bearing its own costs.

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