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TMI Blog1967 (2) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. The Sales Tax Officer considered the stand taken by the Sangh but in disallowing its claim he came to the conclusion that the sale pertaining to the cereals was also taxable. The contention of the petitioner before the Sales Tax Officer was that the cereals had been purchased by it from certain dealers in Ganganagar who were unconditionally exempt on the basis of exemption certificates held by them. It was also submitted that wheat was supplied by the Government departments and exemption was claimed in respect of such supply as well. The Sales Tax Officer, after considering the matter, came to the conclusion that the explanation to rule 15, which defined for purposes of the rules as to what was the first point in the series of sales, was attracted in the case and since the sale by the petitioner was the first sale in the series of sales by a registered dealer the petitioner was held liable to pay the sales tax. This assessment order was passed by the Sales Tax Officer on 10th February, 1964, and is exhibit 1 on the record. It is the validity of this assessment order which is challenged before us and the principal ground that has been taken by the learned counsel for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes runs as follows: Section 5. Rate of tax.-The tax payable by a dealer under this Act shall be at such single point in the series of sales by successive dealers as may be prescribed and shall be levied at such rate not exceeding ten per cent on the taxable turnover, as may be notified by the State Government in the Official Gazette: ............................................................." Section 6 provides for registration of dealers. It enacts that every dealer liable to pay tax shall get himself registered in the prescribed manner. Section 16 provides for prosecutions and penalties for any person failing to get himself registered as required by the Act or who has without reasonable cause failed to pay the tax within the time allowed. Section 26 of the Act empowers the State Government to make rules to carry out the purposes of the Act. Sub-section (4) of this section provides that the power to make the rules conferred by this section shall be subject to the condition of the rules being made after previous publication. Sub-section (5) of the same section provides that all rules made under this section shall be published in the Official Gazette, and upon such pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confine the operation of rule 15 only to one class of such dealers, namely, the registered dealers. We have already set out above section 5 of the Act. On a proper analysis it seems to provide inter alia for two things: (i) that the tax is payable by a dealer under this Act at a single point in the series of sales by successive dealers; (ii) such single point may be prescribed by the rules. This section thus enables the Government to make the rules for prescribing at what point in the series of sales, sales tax shall be payable. Now, rules are made to carry out the purposes of the Act and the avowed purpose amongst others of the Act is to provide for the levy of a tax on the sale of goods in the State of Rajasthan. Section 3 of the Act lays down as to what is the incidence of taxation. It provides that subject to the provisions of the Act, every dealer whose turnover in respect of sales exceeds the prescribed limits, shall be liable to pay tax on his taxable turnover. What is noteworthy in this section is that it is subject to the other provisions of the Act. Therefore, it has to be read subject to the provisions of section 5 of the Act, which provides for the payment of tax by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. In construing the explanation to rule 15, it may be pointed out, that so far as the enacting part of the rule is concerned it does not go contrary to section 5 of the Act, in any manner. In reading the explanation we have to construe it in harmony with the scheme of section 5 as well as that contained in the enacting part of rule 15. The explanation can be said to be ultra vires only if it cannot be so harmoniously read with the enacting part of rule 15, or the provisions of section 5 of the Act for that matter. Having devoted consideration to it, we are satisfied that the explanation does not appear to be out of tune with the scheme of the enacting part of the rule or with the provisions of section 5 of the Act. The explanation, as we have already pointed out, embodies only the normal rule that the assessing authority will follow, but thereby it is not precluded from proceeding against preceding dealers, if any, if they are liable to the payment of tax under the Act. Rule 15, as a whole, also does not go contrary to the provisions of the Act in that the sales are taxable only at one point in the series of sales and no more. In other words, we cannot read rule 15, including it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were carrying on business so as to render the sales of the commodities in the hands of the Government or its departments liable to sales tax. Mere supplying essential commodities for the benefit of the people is normally not carrying on business as is contemplated by section 2(f) of the Act. In these circumstances it was not enough for the petitioners to merely allege that the Government or its departments were dealers. It is essentially a question of fact whether the Government carried on business in the commodities which were purchased by the Sangh from the Government or its departments. Therefore, there is no sufficient material before us for holding that prior to the goods coming into possession of the Sangh and it selling them in turn, there was any other dealer who had rendered himself liable to sales tax, so that imposition of any sales tax from the Sangh could be regarded as the imposition of sales tax at more than a single point in the series of sales. Having considered the matter, we do not find any good ground to interfere with the order of assessment passed against the petitioner-Sangh. The result is that the writ petition fails and is hereby dismissed. In the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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