1997 (1) TMI 483 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the validity of subrule (6) of rule 15 of the Bihar Sales Tax Rules, 1983 and assessment order requiring payment of sales tax on coal transfer.

Analysis:

1. The challenge in this batch of writ applications pertains to the validity of subrule (6) of rule 15 of the Bihar Sales Tax Rules, 1983, specifically regarding the requirement of the challan mentioned in clause (b) of sub-section (4) of section 30 of the Bihar Finance Act, 1981 to be in form X. It is contended that form X is ultra vires and contrary to the Act. Additionally, there is a challenge to the assessment order demanding payment of sales tax on the transfer of coal between the petitioner's collieries, treating it as a sale under the Act. The impugned order was passed by the Assistant Commissioner of Commercial Taxes.

2. Section 30 of the Act mandates registered dealers to maintain accounts for all goods transactions. Sub-section (4) of section 30 requires the issuance of a challan for goods transfer in a form specified by the Commissioner. The State Government, under its powers, framed Rules superseding earlier ones. Sub-rule (6) of rule 15 prescribes the format of the challan as form X. The petitioner argues that the Commissioner, not the State Government, has the authority to specify the form under the Act. However, it is acknowledged that form X existed before the enactment of the Act and Rules.

3. The State's counsel cited section 59(2) of the Act, which saves rules and orders from the previous legislation unless inconsistent or modified. The petitioner's counsel did not challenge form X's validity under the earlier Act and Rules. The court opined that section 59(2) protects form X from challenges to its validity.

4. The impugned order by the Assistant Commissioner is contradictory, stating both the coal transfer between collieries and questioning its propriety. The nature of the petitioner's business as coal sale in the registration certificate is deemed irrelevant to determine if a sale occurred. The petitioner contests the imposition of sales tax on the stock transfer, asserting no sale took place. The court notes the lack of clarity on whether the authority found an actual sale but still imposed a substantial sales tax liability.

5. Consequently, the court sets aside the impugned orders in all writ applications and remands the matter to the Assistant Commissioner for a fresh assessment. The authority is directed to review the petitioner's records thoroughly, provide a full opportunity for the petitioner's defense, and determine conclusively if a sale transpired during the coal transfer between collieries.

6. The writ applications are allowed, and the impugned orders are annulled. The petitioner is instructed to appear before the Assistant Commissioner for further proceedings. No costs are awarded in this matter.