9911796707
TMI Blog1995 (2) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... iness in Bombay. Soon thereafter, it applied for cancellation of the registration certificate granted to it as a non-resident dealer and for grant of fresh registration certificate as dealer in the State. On the above application of the assessee, the Sales Tax Officer cancelled the registration certificate earlier granted to the assessee as a non-resident dealer and issued a fresh certificate in respect of his place of business situated in Bombay with effect from July 1, 1975. 3. It appears that the assessee had also opened another place of business at Madhavnagar in Sangli District in the State of Maharashtra. No separate application for registration was however made by the assessee to the registering authority having jurisdiction over Sangli in respect of the place of business at Sangli. The Sales Tax Officer, Sangli, having learnt about the said place of business, visited the same on November 18, 1977. On such visit, he noticed that though the assessee was required under the Rules to make an application to him for registration in respect of its above place of business, he had not done so. He, therefore, took possession of five books of account found at the above place of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) for the period April 1, 1975 to March 31, 1976. The amount of tax assessed, penalty levied and amounts forfeited in the three assessment periods are as under: Heading Period Sales tax payable 1-4-1975 to 31-3-1976 Rs. 52,586 1-4-1976 to 31-3-1977 Rs. 13,774 1-4-1977 to 31-5-1977 Rs. 6,077 Additional tax under section 15A-I 3,155 826 365 Total 55,741 14,600 6,442 36(2)(a) penalty 2,000 ... ... Forfeiture 52,586 13,774 6,077 1,10,327 28,374 12,519 Advance payment 53,652 Nil Nil Balance due 56,675 28,374 12,519 4. Aggrieved by the orders of the Sales Tax Officer, the assessee appealed to the Assistant Commissioner of Sales Tax. The orders were challenged on the following grounds: (i) It was already registered as a dealer under the Act having its place of business in Bombay. Hence, the Sales Tax Officer erred in treating it as an unregistered dealer in respect of its turnover at Sangli. (ii) The assessing officer erred in forfeiting the amount of tax collected by it. (iii) The Sales Tax Officer erred in levying penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Mr. B.C. Joshi, learned counsel for the assessee, submits that the Tribunal committed a manifest error of law in upholding the order of forfeiture of the amount of tax collected by the assessee on the face of the admitted factual position that the whole of the said amount had already been paid by the assessee to the Sales Tax Department by way of tax and nothing was left with the assessee which could be forfeited. The alternate contention of Mr. Joshi is that the assessee in the instant case being a registered dealer under the Bombay Sales Tax Act, 1959, since May 20, 1966, first having been registered as a non-resident dealer, and later with effect from July 1, 1975, as a dealer having a place of business in the State situated at Bombay, has to be treated as a registered dealer for all purposes under the Act. It is contended that the requirement of separate registrations for places of business situated within the jurisdiction of different registering authorities is merely a procedural requirement and for non-compliance of the same, a dealer, who is already a "registered dealer" under the Act, cannot be regarded as an unregistered dealer in respect of any of its establishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: (i) Where there has been a contravention referred to in clause (a)(i) or (iii), a penalty of an amount not exceeding two thousand rupees or double the sum collected by way of tax-whichever is less. (ii) Where there has been a contravention referred to in clause (a)(ii) or (ii-a) or (b), a penalty of an amount not exceeding two thousand rupees, and in addition, any sum collected by the person by way of tax in contravention of sub-section (2) of section 15A-I or section 46 shall be forfeited to the State Government. When any order of forfeiture is made, the Commissioner shall publish or cause to be published a notice thereof for the information of the persons concerned giving such details and in such manner as may be prescribed. (2) If the Commissioner in the course of any proceeding under this Act, or otherwise, has reason to believe that any person has become liable to a penalty or forfeiture or both penalty and forfeiture of any sum under sub-section (1), he shall serve on such person a notice in the prescribed form requiring him on a date and at a place specified in the notice to attend and show cause why a penalty or forfeiture or both penalty and forfeiture of any su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that amount was granted, he shall refund the sum or any part thereof, which is found due to the person concerned." (Emphasis* supplied) Contravention of the provisions of section 46, without reasonable excuse, is also an offence under section 63(1)(h) of the Act, which is punishable with imprisonment and fine. 9.. Section 37(1) of the Act, which was also applicable to Gujarat State, came to be considered by the Supreme Court in Joshi, Sales Tax Officer v. Ajit Mills Limited [1977] 40 STC 497. After elaborate discussion, it was observed by Krishna Iyer, J. (at page 514): "Section 37(1) does say that 'any sum collected by the person by way of tax.......shall be forfeited......'. Literally read, the whole sum goes to the State. Let us suppose the dealer has returned the whole or part of the collections to the customers. Should the whole amount, regardless of such repayment, be forfeited? We think not." It was further observed: "Section 37(1) uses the expressions, in relation to forfeiture, 'any sum collected by the person....shall be forfeited'. What does 'collected' mean here? Words cannot be construed effectively without reference to their context. The setting colours t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feited' has been used. Section 37(2) directs the Commissioner to issue notice to the assessee to show cause why a penalty, with or without forfeiture, should not be imposed on him. Such a notice, with specific reference to forfeiture, points to an option in the Commissioner to forfeit or not to forfeit or partly to forfeit. This is made plainer in section 37(3), which reads: 'The Commissioner shall, thereupon, hold an enquiry and shall make such order as he thinks fit'. This order embraces penalty and forfeiture. Therefore, the Commissioner is vested with a discretion to forfeit the whole or any lesser sum or none at all. We limit the sense of 'shall be forfeited' as meaning' shall be liable to be forfeited'." (Emphasis* supplied). In the light of the above discussion, it was observed (at page 515): "This signification of 'forfeiture' as 'liability to forfeiture' saves the equity of the statute. The Commissioner must have regard to all the circumstances of the case, including the fact that amounts illegally collected have been returned to the purchasers to whom they belong before passing the final order. We are clear in our minds that the forfeiture should operate only to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of effecting these sales, of refunding any amount to the purchasers and, from the nature of things, it is not possible that they could do so to those purchasers whose addresses or whose names and addresses had not been taken down. If it was thus impossible for the petitioners to refund the amounts to these purchasers, justice and equity both require that the petitioners should not be allowed to profit from this by reason of their wrongful act. It is also pertinent to note that, in fact, the petitioners have not refunded any part of these amounts to their purchasers though they had an opportunity to do so. By the assessment order dated June 30, 1970, the transactions in question effected in the course of the year 1966-67 were held not to be exigible to tax. Though between the date of the order of assessment and the date of the order of forfeiture ten months had elapsed, no effort whatever was made by the petitioners to refund any part of these amounts to their purchasers." 11.. On a careful perusal of the above decision of this Court in Trustees of the Port of Bombay [1979] 44 STC 102, it is clear that the decision of the Supreme Court in Ajit Mills case [1977] 40 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the assessee by the Sales Tax Officer for these three periods were exactly the same as the amounts collected, viz., Rs. 52,586, Rs. 13,774 and Rs. 6,077. Thus the sums collected by the assessee on transactions of sale effected by it at Sangli were paid by the assessee to the Sales Tax Officer as tax payable under the Act on those transactions. Nothing was left with the assessee out of the said sums. No part of it was kept by the assessee. It was in fact assessee's own case before the Sales Tax Officer that he had collected only such amount of tax as was payable by him under the provisions of the Act, which was found to be correct on assessment. The following chart gives the true picture of the collection of tax by the assessee, tax payable/paid to the Sales Tax Officer and amount, if any, left with the assessee after deducting from the amount collected the amount assessed by the Sales Tax Officer during the three periods: Period Amount collected Amount of tax assessed as payable Amount retained by the assessee Rs. Rs. Rs. April 1, 1975 to March 31, 1976 52,586 52,586 Nil April 1, 1976 to March 31, 1977 13,774 13,774 Nil April 1, 1977 to May 17, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him in the State. This liability does not depend upon registration under the Act. He would be liable to pay the tax even if he fails to apply for registration and get himself registered. He is required to get himself registered because of section 22 of the Act which provides that "no dealer shall, while being liable to pay tax under section 3 or under sub-section (6) of section 19, carry on business as a dealer, unless he possesses a valid certificate of registration as provided by this Act". Once he is registered under this section, he becomes a "registered dealer" under the Act. This is clear from clause (25) of section 2 of the Act which defines "registered dealer " to mean "a dealer registered under section 22". Registration is thus of the dealer, not of his place of business. Consequently, once a dealer is registered under section 22 of the Act, he becomes a registered dealer for all purposes of the Act. He cannot be treated as registered dealer only in respect of a particular place of business and unregistered dealer in respect of some other places. The requirement of making separate applications in respect of different places of business within the jurisdiction of different ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
