1962 (3) TMI 59 - SC - VAT and Sales Tax

Whether the appellant is not liable to pay tax under the provisions of the Central Provinces and Berar Sales Tax Act 1947 (Act 21 of 1947) on the ground alleged that it had not been validly registered as a dealer under section 8 of the Act? Held that - Appeal dismissed. Even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under section 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of assessment passed in those proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that section 10(1) had not been followed. This must a fortiori be so when the appellant has itself submitted to jurisdiction and made a return. We accordingly agree with the learned Judges that even if the registration of the appellant as a dealer under section 8 is bad that has no effect on the validity of the proceedings taken against it under the Act and the assessment of tax made thereunder. As section 21 of the Act bars the jurisdiction of Civil Courts to entertain suits calling in question any orders passed by the authorities under the Act and in the view which we have taken it is unnecessary to go into the question whether in view of this section the present suit is maintainable.

Summary

Issues:
1. Validity of tax liability under the Central Provinces and Berar Sales Tax Act, 1947 based on registration status.
2. Interpretation of sections 4, 8, 10, and 11 of the Act in relation to dealer registration and tax assessment.
3. Jurisdiction of taxing authorities and impact of registration status on assessment proceedings.
4. Applicability of section 21 of the Act regarding jurisdiction of Civil Courts in challenging tax-related orders.

Analysis:
The Supreme Court of India addressed the issue of tax liability under the Central Provinces and Berar Sales Tax Act, 1947 based on the appellant's registration status. The core question was whether the appellant was exempt from tax payment due to alleged invalid registration under section 8 of the Act. The Court examined the timeline of events, including notifications issued by the Provincial Government regarding registration requirements and the appointment of Sales Tax Officers. The appellant, a pottery and chinaware company, applied for registration on July 2, 1947, received a certificate on July 21, 1947, and subsequently paid taxes from June 1, 1947, to June 30, 1951.

The Court delved into the statutory provisions of the Act, emphasizing that the liability to pay tax under section 4 is not contingent on registration under section 8. While section 8 mandates registration for dealers liable to pay tax, section 4 imposes the tax liability. The Court highlighted that failure to register may impact procedural aspects like assessment notices under section 10, but it does not absolve the dealer from tax liability under section 4. The Court rejected the appellant's argument that assessment proceedings were invalid due to lack of notice under section 10, stating that jurisdiction for assessments arises from sections 3 and 11, not section 10.

Furthermore, the Court differentiated between lack of jurisdiction and irregular assumption of jurisdiction, noting that even if assessment proceedings were irregular, they would not be void if the authority had jurisdiction over the matter. The Court emphasized that the appellant voluntarily submitted returns and participated in the assessment process, precluding a collateral attack on the assessment orders. Consequently, the Court affirmed that the validity of tax assessments is not impacted by the registration status of the dealer under section 8.

Regarding the jurisdiction of Civil Courts, the Court referenced section 21 of the Act, which bars suits challenging orders made under the Act. However, the Court deemed it unnecessary to delve into this issue given the dismissal of the appeal on its merits. Ultimately, the Court concluded that the appeal lacked merit and was dismissed with costs, upholding the appellant's tax liability under the Act irrespective of the validity of registration under section 8.