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TMI Blog1960 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 8 of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). He compounded the offence after paying a composition fee. Thereafter, on 20th April, 1951, a notice was issued to him for effecting assessment for the years 1st June, 1947 to 12th November, 1947, 13th November, 1947 to 31st October, 1948, and 1st November, 1948 to 31st October, 1949. As no returns were filed by the petitioner, the Sales Tax Authorities proceeded to assess tax on him on the basis of what is known as "the best judgment assessment". 3.. Shri R.K. Pandey for the petitioner contends that the business which the petitioner carried on was only of manufacturing ornaments. He used to purchase gold at the instance of the customers, though the gold vendors used to recover the price thereof from him alone. He asserts that he did not make any profit on the gold used in the ornaments and therefore he did not carry on the business of selling gold. As he was only charging the price for his labour in making the ornaments, he is not liable to pay any sales tax. 4.. In the order of the Sales Tax Officer passed on 10th October, 1952, the business carried on by the petitioner is descri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. This decision was considered in Sundaram Motors (Private) Ltd. v. State of Madras[1958] 9 S.T.C. 687; A.I.R. 1959 Mad. 33., and it was observed: "Although the effect of the judgment is to negative the power of the State to tax a works contract as such, there is no impediment in the State levying a tax on the sale of goods properly so called. If therefore a works contract includes sale of goods the levy would be proper. If, on the other hand, the contract is only a works contract with no element of sale of goods it would not be taxable." 6.. In Saraswati Printing Press v. Commissioner of Sales Tax[1959] 10 S.T.C. 286., it was held that a printer who supplied stationery for executing the printing work given to him by a customer was liable to pay sales tax on the value of the stationery supplied by him, as the contract in such a case was essentially for the sale of the finished goods. In Indralaya Ltd. v. Additional Commissioner, Commercial Taxes[1958] 9 S.T.C. 633., it was held that the transaction of the supply of ready-made cloth made by the tailoring department as well as garments made by the assessee on the order of customers from cloth taken from their selling department wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole assessment is bad. As we have stated, the petitioner was liable for the sales tax on the sale price of ornaments which were prepared at the instance of customers, this point does not arise. What has been done by the Sales Tax Authorities is to ascertain the sale price of the finished products in which the gold purchased by the petitioner must have been used. It was for the petitioner to show that the gold purchased by him was used in a particular manner and in the absence of such proof, the Sales Tax Authorities were entitled to presume that the whole of it was used for preparing ornaments which were sold to customers. Under these circumstances, the assessment of sales tax on the estimated value of the ornaments based on the purchases of gold was correct. 10.. In the connected petition (M.P. No. 13 of 1959) an additional argument was raised that the assessment for the year 1948-49 on the basis of the sales in the previous years was incorrect. We find that the petitioner did not go up in appeal against the assessment made by the Sales Tax Officer. If the manner of assessment was wrong, the appellate authority could have corrected it. As the petitioner has not exhausted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is satisfied about the necessity for action. We agree that in the case of unregistered dealers, the proceedings for assessment commence from this notice. 14.. Such a notice was given to the petitioner on 29th July, 1952. The three assessment periods ended respectively on 12th November, 1947, 31st October, 1948, and 21st October, 1949. If section 11(5) applies to the case, the assessment has to commence "within three calendar years from the expiry of the periods". In Kanhayyalal v. Deputy Commissioner, Sales Tax [1958] 9 S.T.C. 503; 1958 M.P.C. 295., it was held that the three calendar years have to be calculated from the first of January following the date of expiry of the period of assessment. On this interpretation, the assessment for the first two periods only would be out of time. Shri Pandey, however, contends that the assessment for the third period is also beyond time under section 11(5) as it stood before the amendment made in 1953. 15.. Before the amendment, the Commissioner could make an assessment "at any time within three calendar years from the commencement of this Act and thereafter within twelve months from the expiry of such period". The words underlined were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed to be a certificate issued under sub-section (3), i.e., it shall be deemed to be a certificate issued on an application under sub-section (2) which was in order. The application, to be in order, must, as already stated, satisfy the conditions laid down in sub-section (1) and sub-section (2) and must, as in the instant case, be made before the 31st August, 1947. In the event of a composition, the making of such an application is dispensed with; and the dealer is registered as if he had made the application required by law, i.e., before the prescribed date, and had thus not contravened sub-section (1). The certificate issued under subsection (5) thus takes effect in a case like the present from the commencement of the Act." The fiction was actually extended to interpret section 2(j)(a)(ii) and the sales made to B were exempted from tax. Following this decision, we must hold that the registration related back to the commencement of the Act and the petitioner must be treated as a registered dealer all along. That being so, section 11(5) had no application to the case. The matter fell to be governed by sub-section (4) as in the case of any other registered dealer. 18.. In Regio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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