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TMI Blog1991 (7) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment on the ground that M/s. Vijay Traders did not hold any licence under the Bombay Act, but it posed as a licensed dealer and had consequently issued fake certificates in form 16 to the dealer. It was also noticed that the abovesaid certificates were given under the signature of different persons. Such transactions of sale were of Rs. 14,85,738 in Samvat Year 2024, and of Rs. 3,12,581 in Samvat Year 2025, and of Rs. 5,70,322 for the period from Kartik Sud 1 to Chaitra Vad 30 of Samvat Year 2026. The Sales Tax Officer had reassessed the assessee under section 35 of the Bombay Act under his orders dated January 21, 1976, and in this reassessment the transactions of sales made to M/s. Vijay Traders were subjected to tax. However, the Sales Tax Officer had excluded those transactions from taxation where the goods were repurchased by the dealer from M/s. Vijay Traders and were resold by the applicant dealer eventually. So far as Samvat Year 2028 is concerned the Sales Tax Officer while assessing the dealer for the first time on January 21, 1976 under section 41 of the Gujarat Act, had disallowed the sales made by the dealer to M/s. Vijay Traders, M/s. Sadhana Traders, M/s. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declared goods would normally pass was not adhered to by the dealer and therefore the dealer was required to be blamed for being in predicament for its sale being at the last stage for the levy of the General Sales Tax Act. The Tribunal had considered the rival contentions advanced in support of the assessee and the Revenue and ultimately had come to the conclusion that it is true that regard being had to section 15 of the Central Act and section 9 of the Gujarat Act the subsequent sale cannot be taxed. But in the instant case the stage set for the levy of general sales tax is when a licensed dealer sells the goods to a dealer who was not holding a licence, and therefore in the instant case the dealer was liable to be taxed as the last dealer. Taking the abovesaid view the Tribunal had preferred to dispose of all the second appeals by the orders dated September 10, 1981. Later on the dealer-assessee had made the necessary application for making a reference of certain questions to this High Court which came to be granted by the Sales Tax Tribunal and ultimately the following questions have been referred to this High Court under section 61(1) of the Bombay Act: "(1) Whether, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing questions to this High Court under section 69(1) of the Gujarat Act, 1969, relating to the proceedings for Samvat Year 2028: "(1) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the applicant-firm was estopped from denying the genuineness of sales made by it to M/s. Vijay Traders and M/s. Sanjivani Textile Traders as evidenced by the returns filed by them and from contending before the Tribunal that such transactions of sales were mere havala transactions or accommodation sales entered into, in order to accommodate the profit of the applicant-firm? (2) If the answer to question No. (1) is in the affirmative, whether on the facts and in the circumstances of this case, the Tribunal was right in law in holding that deductions admissible under section 8(iii) of the Gujarat Sales Tax Act, 1969, in respect of sales made by the applicant-firm to M/s. Vijay Traders and Sanjivani Textile Traders were rightly disallowed? (3)(a) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that if a licensed dealer made the first sale of declared goods to a dealer not holding licence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any licence under the Bombay Act, but it posed as a licensed dealer and had consequently issued false certificates in form 16 to the applicant-dealer firm. Because of this position the Sales Tax Officer had excluded the transaction of sales in respect of Samvat Years 2024, 2025 and for a period from Kartik Sud 1 of Samvat Year 2026 to Chaitra Vad 30 of Samvat Year 2026. It is in the back ground of this undisputed fact that Mr. Pathak has tried to urge that though the dealer can be said to be a last dealer there is a scope for a subsequent last dealer also because in the instant case the dealer had sold the goods to unlicensed dealers but again those unlicensed dealers had sold the goods to the licensed dealer and they had sold the goods to the textile mills company where the goods ultimately came to be consumed. It is in the background of these facts that Mr. Pathak has further contended that when the licensed dealer had purchased the goods from unlicensed dealer he becomes a second last dealer. The abovesaid contentions raised by Mr. Pathak requires to be scrutinised in view of certain provisions of the Central Act as well as certain provisions of the Gujarat Act. Section 15 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which section 6 finds its place. Therefore again on a plain reading of section 6 it becomes clear that the taxes under the Act are to be paid by a dealer in accordance with the provisions of the Act. That takes us to the provisions contained under section 9 of the Gujarat Act. It is in respect of the stage of levy of sales tax, general sales tax or purchase tax on declared goods. Clause (b) of sub-section (1) of section 9 of the Gujarat Act says that in the case of levy of general sales tax under section 8, the stage would be of sale of such goods by the last dealer liable to pay such tax under the Act. It therefore becomes clear from section 9(1)(b) that in respect of the levy of the abovesaid taxes the stage of levy of such tax would be the last dealer. It is not in dispute and Mr. Pathak, learned counsel appearing on behalf of the dealer, has never contended before us that the dealer would not be a last dealer. It therefore becomes clear that under the provisions contained under section 9(1)(b) of the Gujarat Act the assessee or the dealer who has requested the Tribunal for making reference of the abovesaid questions to this High Court is the last dealer within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act at any subsequent stage on the sale or purchase thereof.' Placing reliance upon the abovesaid provision, Mr. Pathak has urged that in the instant case before us, the tax had become leviable and had already been levied and is recovered from the licensed dealer, and therefore the tax on the same commodity cannot be levied or collected at a subsequent stage from the dealer before us. But the very text of the abovesaid provision would go to show that what is meant by Legislature is that if any tax has been levied or has become leviable under the Act, on the sale or purchase of the goods, at any stage then, no further tax shall be levied under the Act on any subsequent stage on the sale or purchase of the same goods. It requires to be appreciated that in the instant case when the dealer before us had sold the goods to unlicensed dealers the tax had become already leviable. In view of this position when the tax had already become leviable it could not have been levied at a subsequent stage. But we are not concerned with that aspect of the case. In our view the abovesaid provision on which Mr. Pathak had placed heavy reliance would on the contrary disprove his contention befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy" has not been used in the Act or the Rules as meaning actual collection.'" Therefore looking to the abovesaid observation of the Supreme Court it becomes clear that the term 'levy' appears to be wider in its import than the term "assessment". The term "levy" may include both the imposition of a tax as well as the assessment. Looking to this wider meaning of word 'levy' it can be said without any hesitation that in the instant case the tax had become leviable on the sale by the dealer before us, to the unlicensed dealer. Before parting with this point a reference also requires to be made to rule 25 and rule 31 of the Gujarat Sales Tax Rules, 1970. A bare reading of the above said rules would go to show that it is the liability rather the obligation of the assessee to submit the returns and declarations periodically and pay up the tax within the stipulated period. Rule 31 which is in respect of the time fixed for payment gives the exact time during which the payment of the tax, for the month or the quarter as the case may be, for which any return or declaration is required to be furnished, is to be made. It therefore becomes clear that looking to the abovesaid rules the tax had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst sale of declared goods to a dealer not holding the licence then the protection provided under section 7(3) of the Bombay Sales Tax Act, 1959, read with section 9(4) of the Gujarat Act, 1969, was not available. It appears that in the light of the view which we have taken as aforesaid the Tribunal was perfectly justified in holding so. The same would be the position in respect of the question No. (4)(b). In view of this position the abovesaid question in the first set requires to be replied and answered in affirmative, against the assessee and in favour of the Revenue. So far as the second set of questions regarding Samvat Year 2028 is concerned it becomes clear that on the same analogy the dealer was estopped from denying genuineness of sale made by it to M/s. Vijay Traders and others and they were not entitled to contend before the Tribunal that the said transactions were mere havala transactions. In the same way the Tribunal was right in law in holding that the deductions granted to the dealer before us in respect of the abovesaid transactions in favour of M/s. Vijay Traders and others were required to be disallowed. In the same way, further the Tribunal was justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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