1995 (1) TMI 313 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of provisions under section 15A-I of the Bombay Sales Tax Act, 1959 regarding the liability of an assessee to pay additional tax.

Analysis:
The case involved a reference under section 61(1) of the Bombay Sales Tax Act, 1959 regarding the liability of an assessee to pay additional tax under section 15A-I of the Act. The assessee, a transferee of a business, challenged the levy of additional tax under section 15A-I on the grounds that he was not liable to pay tax under section 3 of the Act but under section 19(6) as a successor to the business. The Tribunal held that a transferee is primarily liable under section 3 of the Act and therefore liable to additional tax under section 15A-I if the turnover exceeds the specified limit. The Tribunal confirmed the orders of the Sales Tax Officer and the Assistant Commissioner, dismissing the appeal of the assessee.

The counsel for the assessee argued that section 15A-I applies only to dealers liable to pay tax under section 3 of the Act, not to transferees under section 19(6). However, the Court found this argument to be misconceived. Section 3 of the Act deals with the incidence and levy of tax, making every dealer liable to pay tax if their turnover exceeds specified limits. Section 19(6) deals with succession of business and makes the transferee liable to pay tax under section 3 from the date of succession. The Court emphasized that section 19 is part of section 3 and must be read together.

Section 15A-I of the Act imposes additional tax on dealers whose turnover exceeds a certain limit. The Court clarified that the expression "dealer liable to pay tax under section 3" in section 15A-I includes all dealers liable to pay tax under the Act, regardless of the specific provision under which their liability arises. The Court held that the assessee, as a transferee under section 19(6), is liable to pay tax under section 3 and therefore subject to additional tax under section 15A-I if the turnover exceeds the specified limit.

In conclusion, the Court answered the reference in favor of the Revenue, affirming that the assessee, as a transferee of a business, is liable to pay additional tax under section 15A-I of the Act if the turnover exceeds the prescribed limit, as the liability arises under section 3 of the Act.