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1960 (12) TMI 72 - SC - VAT and Sales TaxWhether in view of the composition of tax liability under section 39, the order imposing penalty under sub-section (4) of section 21 could not be passed? Held that - Appeal dismissed. It is unnecessary to consider this question. Tribunal was right in holding that the Sales Tax Officer had no jurisdiction to forfeit the amount of general tax collected by the respondents.
Issues: Interpretation of section 21(2) of the Bombay Sales Tax Act, 1953 regarding the prohibition on collecting tax without registration or license.
The Supreme Court analyzed the case where the respondents, as dealers in special goods, did not register under section 9 of the Bombay Sales Tax Act, 1953, despite being liable for general and special taxes. The issue revolved around the interpretation of section 21(2), which prohibited collecting tax without proper registration or licensing. The Court examined the legislative intent behind the provision and whether the respondents, being licensed but not registered dealers, could collect general tax. The State contended that a person liable for general tax must register to collect it, regardless of having a license for special goods. However, the Court held that the prohibition in section 21(2) did not apply to licensed dealers, allowing them to collect general tax even without registration. The Court emphasized that interpreting taxing statutes should not involve adding words to presume legislative intent and that any doubt should benefit the taxpayer. Therefore, the Sales Tax Officer had no jurisdiction to forfeit the general tax collected by the respondents. The Court further deliberated on whether the penalty under section 21(4) could be imposed due to the composition of tax liability under section 39. However, since the primary issue concerning the forfeiture of general tax was resolved in favor of the respondents, the Court deemed it unnecessary to delve into the penalty imposition aspect. Consequently, the appeal was dismissed, affirming the Tribunal's decision and holding that the Sales Tax Officer exceeded jurisdiction in forfeiting the general tax amount collected by the respondents.
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