9911796707
TMI Blog2013 (1) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn, since the petitioner had made interstate purchase of goods for local sale, during the year Held that:- Both sub sections 1 and 2 of Section 7 do not give an idea that petitioner/ dealer is liable to take out registration under the CST Act. This is more so, when there is no case for the respondent that the petitioner has effected any Inter-State purchases, paying lesser rate of tax under the CST Act or that, the petitioner has effected any Inter-State sales. The petitioner is entitled to have the benefit of "Input Tax Credit", in so far as he happens to be an 'importer' as defined under Section 2(xxii) of the KVAT Act and there is absolutely nothing wrong for having collected and remitted the tax, without having any registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below the taxable limit of Rs. 10 lakhs. The petitioner had collected tax of Rs.36,914/- from customers and paid over to the respondent along with return, since the petitioner had made interstate purchase of goods for local sale, during the year. However, the petitioner was served with Ext.P2 notice by the respondent, calling for explanation as to how and why tax was being collected by him, without having any authority and observed that the petitioner was not eligible for the "Input Tax Credit," sought for. 3. On receipt of such notice, the petitioner preferred Ext.P3 reply stating that, the petitioner very much satisfies the definition of the term "importer" as defined under Section 2(xxii) and as such, was liable to satisfy the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant provisions of law. During the course of hearing, learned Government Pleader submits that, the petitioner is pursuing business as defined under Section 2(aa) of the CST Act and that the term dealer" is defined under Section 2(b). Referring to the term 'business', it has necessary to be read into Section 7 of the CST Act, which speaks about the registration and this being the position, the petitioner ought to have taken registration under the CST Act for the purpose of such business being a dealer, submits the learned Government Pleader. 7. In the course of hearing, it was brought to the notice of this Court that, the question whether a dealer, whose turnover is below the taxable limit, is liable to take permission for collecting tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales or purchases of goods as provided in this Act. The liability to pay tax shall be on the taxable turnover, - The above provision does not speak about any necessity to have registration for the purpose of payment of tax under Section 6(1) of the KVAT Act. This being the position, the observation made by the first respondent to the contrary in Ext.P4 does not appear to be correct or sustainable. 9. With regard to the sustainability of punishment imposed vide Ext.P8, for not having CST registration, the scope and extent of registration has to be looked into. Section 7 of the CST Act deals with registration, Sub Sections (1) and (2) of which are relevant, as extracted below: Registration of dealers:- (1) Every dealer liable to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btain registration under the CST Act, upon which, it may be open for him to effect the Inter-State purchase satisfying the CST at a lesser rate, but for which, he will have to satisfy the CST at full/higher rate. It is also relevant note that the terminology used in Sub Section 2 of Section 7 is may" and not "shall". The course provided in Sub Section 2 clearly speaks about the discretion vested with the dealer, giving him an option to have registration under the CST Act, notwithstanding the fact that he is not liable to pay any tax under the CST Act. It is for the dealer to decide, whether he should apply for and obtain registration, to make use of the privileges that may follow by virtue of having such registration . If the dealer is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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