9911796707
TMI Blog2007 (10) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... ths of April, May and June, 2006. Obviously, the said order of assessment is appealable and this court would be reluctant to entertain the challenge against the order of assessment, unless there are extraordinary circumstances warranting the same. But since a challenge has been mounted as regards the statutory prescription, I have considered the writ petition insofar as it relates to the challenge against the note to form No. 9 forming part of the Rules. The petitioner is a dealer in pipes registered on the files of the first respondent, it filed annual return for the year 2005-06 and also for the month of June, 2006. The second respondent proposed to pass an order of assessment after rejecting the returns. This was opposed by the petitioner. Overruling the contention, a best judgment assessment was passed by the assessing authority as per exhibit P4. One of the aspects dealt with in the order of assessment related to a claim made by the assessee in relation to certain goods, which apparently were returned by the purchaser. The assessing authority proposed acceptance of only such credit notes, to which there were corresponding debit notes issued by the purchasing dealer. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormat that is consistent with section 41 of the Act. It is also contended that the order of assessment is rested on other grounds as well. Essentially section 41(1) deals with a case of return of taxable goods once sold and the selling dealer accepting such return. The section would have frequent application, to cases where consumer goods are sold in small quantities, but nevertheless, sales turnover would reflect a high volume of sales. The assessee, in the present case, is a dealer in pipes, and therefore, the commodity might be required by small contractors and plumbers, frequently in small quantities. There could be a variety of reasons for return of the same. In such circumstances, though the sale is complete and therefore the taxable event, as contemplated by the Act, has also taken place law gives a liberty to the selling dealer to demonstrate that a portion of the goods once sold was actually returned and therefore, the tax effect on such sales as reflected in the sale invoice would actually be lower than what was originally contemplated. The sales turnover would also, therefore, be proportionately reduced. For every sale made by a dealer, there ought to be a correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vires section 41 of the Act read with rule 59 of the Rules. Since what is involved is a matter which will have recurring application to traders/assessees, I have considered the said contention on merits. Section 41 of the Act provides for a situation where subsequent to the sale of taxable goods effected by a dealer, the purchaser has returned the goods covered by the tax invoice fully or partly. There is a period prescribed for return of such goods, so as to invite the application of section 41 of the Act (90 days from the date of sale). Thereupon the dealer effecting the sale shall issue forthwith, to the purchaser a credit note containing such particulars, as may be prescribed. "Prescribed" means prescribed under the Rules. Rule 59 of the Rules specifically provides that the credit note and debit note specified in section 41 shall be in form No. 9. Form No. 9 is a common form for a credit note/debit note. It provides for description of goods, quantity, sales/purchase bill number and date, date of return with documents details, amounts involved in the sale, related tax and miscellaneous remarks. Other particulars relating to the credit note/debit note is also required to be pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforced. The tax collected by the selling dealer, less the tax, which he must have paid at the time of purchase of the goods, is to be remitted to the Government. A sale of goods, as contemplated by law, has actually therefore become completed pursuant to an agreement for sale and the delivery of the goods is completed and the property in the goods has passed from the seller to the purchaser. (I have only indicated the most common mode of transaction constituting a sale of goods. Obviously sale of movable property can take place under variety of circumstances. A reference is not made to such myriad possibilities because, it is unnecessary to do so). section 41 of the Act essentially contemplates a situation where taxable goods, which are once sold, are returned by the purchasing dealer to the selling dealer for variety of reasons. In effect, section 41 of the Act is a beneficial provision, because by a fiction, it provides for the reversal of a taxable event which has already taken place, viz., a completed sale of taxable goods. When A sells taxable goods to B pursuant to an agreement between them, irrespective of the time when the consideration actually passes hands, sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have incorporated such a prescription as a part of the rule itself is obviously not a contention pressed forth by the petitioner. In such circumstances, where section 41 of the Act provides that the format of the credit note/debit note will be as is prescribed, and it is so prescribed, there cannot be a contention that the "note" forming part of form No. 9 is ultra vires section 41 of the Act. The contention is misconceived and untenable. Learned counsel for the petitioner cited the decision reported in CIT v. Ahmedbhai Umarbhai and Co. [1950] 18 ITR 472 (SC); AIR 1950 SC 134 for the proposition that marginal notes in an Indian Statute, as in an Act of Parliament cannot be referred to for the purpose of construing the statute. He also referred to the decisions of the Supreme Court in St. Johns Teachers Training Institute v. Regional Director National Council for Teacher Education [2003] 3 SCC 321 and Nedurimilli Janardhana Reddy v. Progressive Democratic Students Union [1994] 6 SCC 506 and repeated the submission that Rules cannot supplant the provisions in the parent Act Obviously, there cannot be any quarrel with the said proposition as laid down by the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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