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TMI Blog1991 (8) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods despatched from Ahmedabad were taken delivery of by the dealer at Delhi on 21st June, 1976, after getting the documents released from the bank on payment of the balance purchase price. The assessing authority granted registration to the dealer under the local and Central Sales Tax Acts but made them effective from 21st June, 1976. The contention of the dealer, that the registration certificate should be operative from 10th June, 1976 and from the said date he must be treated as a registered dealer so that he could avail of the relief from tax on issue of "C" form/declaration, did not find favour with the assessing authority. The dealer impugned the validity of the order of the assessing authority by an appeal to the Assistant Commissioner, Sales Tax, but with no success. Feeling still aggrieved, the dealer filed appeals before the Sales Tax Appellate Tribunal. The Tribunal recorded its findings as under: "Feeling aggrieved the appellant has moved the present appeals. I have heard the parties and given my due consideration to all the circumstances. I find that under section 3 of the Central Sales Tax Act, a sale or purchase of goods shall be deemed to take place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x or at much reduced tax. This is a valuable benefit available to the dealer and is not co-related to the sales which he may effect. This is all the more so on inter-State sales where no minimum taxable turnover is prescribed. In other words, a registered dealer is entitled to the benefits available while effecting purchases although there are no sales. The Revenue has laid considerable emphasis on section 7 of the Central Act and section 15 of the Delhi Sales Tax Act, 1975, in order to show that liability to pay tax arises only when sales are effected. In Delhi it is pointed out, there is no purchase tax. However, this is alright so far as the Revenue and the exigibility to tax are concerned. The dealer, on the other hand, may be more interested to avail the benefit of registration while effecting purchases. It may not be correct to deny him this benefit especially when he qualifies to be a dealer and the effecting of purchases may itself constitute a stage in the activity of business. This may have all the more significance for a beginner in business as he has to in any case start the same by first effecting purchases. Sales come later. There is nothing in the law which purports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereof is extracted below: Section 7(1): "Every dealer liable to pay tax under this Act shall, within such time as may be prescribed for the purpose, make an application for registration under this-Act to such authority in the appropriate State as the Central Government may, by general or special order, specify, and every such application shall contain such particulars as may be prescribed. Section 7(2) ............................................. Section 7(3): "If the authority to whom an application under sub-section (1) or subsection (2) is made is satisfied that the application is in conformity with the provisions of this Act and the Rules made thereunder and the condition, if any, imposed under sub-section (2A), has been complied with, he shall register the applicant and grant to him a certificate of registration in the prescribed form which shall specify the class or classes of goods for the purposes of sub-section (1) of section 8." Section 7(1) of the Act stipulates that every dealer liable to pay tax under the Act shall, within such time as may be prescribed for the purpose, make an application for registration under the Act to such authority in the appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction, it is only the seller who is within the taxing jurisdiction of the Act. Whereas section 6 of the Act postulates the liability for tax on interState sales, section 3 of the Act specifies as to when a sale of goods is said to take place in the course of inter-State trade or commerce. Section 3 enacts: Section 3: "When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.-A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another; ......................" Clause (a) of section 3 of the Act contemplates a sale in the course of inter-State trade or commerce which occasions the movement of goods from one State to another. It thus, seems clear that a sale would fall in section 3(a) if the terms of contract stipulate movement of goods sold. Sub-section (1) of section 7 mandatorily enjoins such a dealer to be registered irrespective of the gross turnover, exceeding or not excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing the certificate of registration. Broadly speaking, the same is the position in the local Act. Section 14 of the Delhi Sales Tax Act, 1975 (hereinafter referred to as "the local Act") in material respect, is in pari materia to section 7 of the Central Act. In that it lays down that no dealer, shall, while being liable to pay tax under section 3 of the local Act, carry on the business as a dealer, unless he has been registered and possesses a certificate of registration. It is therefore, obligatory on such dealer, like under the Central Act, who has become liable to pay tax under the local Act, to get himself registered. Rule 15(5) of the Rules made under the local Act (like rule 4 of the Rules made under the Central Act) prescribes a period of 30 days, from the date of dealer's becoming liable to pay tax, within which he is liable to get himself registered. The liability to pay tax is imposed by section 3 of the local Act. Clause (ii) of sub-section (2) of section 3, of the local Act, which is relevant for the present purpose, provides that all such dealers who, after the commencement of the local Act either become liable to pay tax under the Central Sales Tax Act or ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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