1995 (11) TMI 405 - HC - VAT and Sales Tax

Issues Involved:
1. Whether a dealer deemed as a registered dealer under section 7(1) of the M.P. General Sales Tax Act, 1958, is also deemed to be a registered dealer under the M.P. Entry Tax Act when section 13 of the Entry Tax Act has not adopted section 7 of the Sales Tax Act.

Issue-wise Detailed Analysis:

1. Dealer Registration Under Different Acts:
The primary issue was whether a dealer deemed as a registered dealer under section 7(1) of the M.P. General Sales Tax Act, 1958, could also be considered a registered dealer under the M.P. Entry Tax Act. The Tribunal had held that the dealer would not be deemed to be a registered dealer under the Entry Tax Act since section 13 of the Entry Tax Act did not adopt section 7 of the Sales Tax Act.

Facts and Procedural History:
The assessee, engaged in bridge construction, was assessed to entry tax for the assessment year 1977-78. The assessee appealed under section 13 of the Entry Tax Act, depositing 50% of the balance demand. The Appellate Deputy Commissioner of Sales Tax, Raipur, issued a notice for summary rejection of the appeal due to non-deposit of 75% of the balance amount. The appeal was summarily dismissed without a hearing. The assessee then appealed to the Board of Revenue, Gwalior, which accepted the appeal on grounds of the need for a hearing and the opportunity to deposit the balance amount.

Board of Revenue's Findings:
The Board of Revenue held that the non-applicant was not a registered dealer but was only deemed as such under section 7(2) and (4) of the Sales Tax Act. It concluded that section 7 had not been adopted by section 13 of the Entry Tax Act, thus categorizing the assessee as an unregistered dealer under section 38(3)(e) of the Act.

Contentions:
The Revenue argued that section 7 should be deemed applicable by implication, emphasizing that the dealer should be considered a registered dealer for all purposes, including filing returns and assessment. They referenced section 2(2) of the Entry Tax Act, which states that expressions not defined in the Act but defined in the Sales Tax Act should carry the same meanings. The Revenue also cited the case of Harish Tandon v. Addl. District Magistrate, Allahabad to support their argument.

Conversely, the assessee's counsel argued that the Legislature did not intend to apply section 7 of the Sales Tax Act to the Entry Tax Act, as the two Acts are based on different constitutional entries (Entry 52 and Entry 54 of List II of the Seventh Schedule). They emphasized that the deeming provision should not be stretched beyond its intended context, citing the Supreme Court decision in Commissioner of Sales Tax v. Union Medical Agency.

Court's Analysis and Conclusion:
The Court agreed with the assessee's counsel, stating that the deeming provision should not be extended beyond its intended purpose. Section 13 of the Entry Tax Act specifically lists the applicable provisions of the Sales Tax Act, deliberately omitting section 7. The Court noted that the Entry Tax Act and Sales Tax Act are based on different constitutional entries, and the Legislature intentionally excluded section 7 to avoid applying purchase tax provisions to the Entry Tax Act.

The Court rejected the Revenue's argument that the word "deemed" in section 7(4) of the Sales Tax Act should imply applicability under the Entry Tax Act. It emphasized that the deeming provision must be interpreted within its context and should not be extended to include "registered dealer" under the Entry Tax Act.

Final Judgment:
The Court concluded that the non-applicant/assessee could not be deemed a registered dealer under the Entry Tax Act. The reference was answered in the affirmative, against the Revenue, confirming that the Tribunal was justified in its decision.

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