1998 (11) TMI 630 - HC - VAT and Sales Tax

Summary

Issues Involved
1. Date of effectiveness of registration under section 9-A of the Orissa Sales Tax Act, 1947.
2. Liability to pay sales tax prior to the issuance of the registration certificate.
3. Applicability of precedents and interpretation of relevant statutory provisions.

Issue-Wise Detailed Analysis

1. Date of Effectiveness of Registration under Section 9-A
The primary issue was to determine the effective date of registration under section 9-A of the Orissa Sales Tax Act, 1947. The petitioner argued that the registration certificate should be effective from the date of service, January 6, 1997, rather than the date determined by the Sales Tax Officer, which was September 1, 1996. The court examined section 9-A, which allows voluntary registration for dealers whose gross turnover exceeds ten thousand rupees, even if they are not liable to pay tax under section 4. The court noted that the registration certificate was granted on December 26, 1996, and the petitioner could not have collected tax before receiving the certificate.

2. Liability to Pay Sales Tax Prior to Issuance of Registration Certificate
The court addressed whether the petitioner was liable to pay sales tax for the period before receiving the registration certificate. It was noted that under section 9-B, only registered dealers could collect tax. The court referenced the decision in State of Orissa v. Bhagabati Timber, which held that liability to pay sales tax commences from the date the registration certificate is received. The court agreed with this precedent, stating that the petitioner could not be saddled with the liability to pay sales tax for the period before receiving the registration certificate, as they had no right to collect tax.

3. Applicability of Precedents and Interpretation of Relevant Statutory Provisions
The court examined several precedents, including State of Orissa v. Vijoy Laxmi Trading Co. and State of Orissa v. Auto Syndicate, which dealt with the liability to pay tax under section 4 and the implications of registration. The court distinguished these cases, noting that they related to section 9, whereas the current case concerned section 9-A. The court reaffirmed the principle from Bhagabati Timber and Deepak Medical Store that liability to pay sales tax commences only from the date of receipt of the registration certificate.

The court concluded that the petitioner was liable to pay tax from the date of receipt of the registration certificate and not from an earlier date, as they could not collect tax without being registered. The writ petition was disposed of accordingly, with the court holding that the petitioner shall be liable to pay tax from the date when the registration certificate was received.

Conclusion
The court held that the petitioner's liability to pay sales tax commenced from the date of receipt of the registration certificate, January 6, 1997, and not from September 1, 1996, as determined by the Sales Tax Officer. The court emphasized that without the registration certificate, the petitioner could not collect tax, and thus could not be held liable for the period prior to receiving the certificate. The writ petition was disposed of with this ruling.