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TMI Blog2009 (8) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... is called for. Thus penalty under section 36(4A) is upheld. - Writ Petition No. 1140 of 1998 - - - Dated:- 21-8-2009 - FERDINO I. REBELLO AND KARNIK D.G. , JJ. JUDGMENT:- The judgment of the court was delivered by FERDINO I. REBELLO J. By the present petition the petitioners seek to challenge the order of assessment whereby the petitioners have been held liable to pay purchase tax on gold purchased from MMTC under a replenishment licence under section 13AA of the Bombay Sales Tax Act, 1959. The petitioners are also aggrieved by the action of the respondents in charging purchase tax on a vehicle purchased for the use of its employees as also consequential charging of interest under section 36(3)(b) and penalty under section 36(2)(c) (Explanation 1) as also penalty under section 36(4A) of the Bombay Sales Tax Act. A show-cause notice was issued to the petitioners. The petitioners filed their reply to the said show-cause notice on October 3, 1997 denying their liability to pay purchase tax on purchase of gold. There was no specific denial in so far as purchase tax on the purchase of vehicle was concerned. The assessing officer was pleased to pass an order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng filed in form CK setting out that petitioner is authorised to purchase gold from MMTC without paying sales tax in view of the Government notification dated December 28, 1959 issued under section 41 of the Bombay Sales Tax Act on declaration in CK form without paying sales tax. The petitioners by this petition apart from challenging these orders of assessment have, in the alternative, also sought a declaration that section 13AA as was in force between April 1, 1990 and September 13, 1995 of the Bombay Sales Tax Act is unconstitutional. We will first examine the matter on the merits and only in the event that the relief as prayed for by the petitioner cannot be granted, do we propose to consider the challenge to the constitutionality of the provisions though, in our opinion, prima facie such challenge is debatable as the Bombay Sales Tax Act has been enacted pursuant to the power in the State Legislature under entry 54, List II of the Constitution of India. Rule was issued on July 9, 1998. The short question for our consideration is whether the petitioner is liable for payment of purchase tax on purchase of gold/bullion from MMTC. There is no dispute that the petitioner h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Maharashtra Act 25 of 1999 with effect from March 31, 1999 and the previous amendment by Maharashtra Act 19 of 1995 with effect from October 1, 1995. It would thus be clear that tax included purchase tax and the Government notification exempted the whole of the tax. It is the submission on behalf of the respondents that the petitioners would be liable to pay purchase tax and at the highest they would be entitled to the set-off under rule 51. Section 13AA, before its substitution by Maharashtra Act 16 of 1995 with effect from January 1, 1995, read as under: 13AA. Purchase tax payable on goods in Schedule C, Part I when unsold. Where a dealer, who is liable to pay tax under this Act, purchases any goods specified in Part I of Schedule C, directly or through commission agent, (from any person) then, unless the goods so purchased are resold by the dealer, there shall be levied, in addition to the sales tax, paid or payable, if any, or as the case may be, the purchase tax levied or leviable, if any, under the other provisions of this Act in respect of purchases of such goods, a purchase tax at the rate of two paise in the rupee on the turnover of such purchases. It is thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not fall within the purview of section 13 and no purchase tax would be leviable in respect of such purchases. The court further observed that purchases or sales of any and every goods by a person who is a dealer, cannot be regarded as purchases or sales by a dealer, unless such sales or purchases are in course of his business or incidental or ancillary thereto. This court thereafter in Morarji Brothers (Import Export) Pvt. Ltd. v. State of Maharashtra [1995] 99 STC 117 was pleased to hold that a person carrying on the business of buying or selling certain goods cannot be regarded as a dealer in any and every goods sold by him without a finding that either he carries on the business of buying or selling such goods or that the sales of such goods are connected with or incidental or ancillary to his business of buying or selling goods . In our opinion it will not be possible to apply the ratio of the judgments of this court in the absence of the petitioner having produced any material either before us or before the appellate authority. As noted earlier, on the contrary there is a finding against the petitioner that he had not established that the purchase was not from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment. That leaves penalty under section 36(2)(c) Explanation 1. Explanation 1 to section 36(2)(b) requires that on assessment or reassessment the total amount of tax paid by the dealer with returns for any period is found to be less than eighty per cent of the amount of tax so assessed or reassessed or found due in appeal or revision or rectification, then, for the purpose of clause (c) he shall be deemed to have concealed the particulars of the transactions or knowingly furnished inaccurate particulars of transactions liable to tax. In the instant case considering that we have held that the petitioner is not liable to pay purchase tax for the gold purchased from MMTC Explanation 1 would not be attracted. Even otherwise the petitioner had disclosed all particulars. The penalty on that count has to be set aside. The penalty imposed under section 36(4A) is in a sum of Rs. 200. Though it is true that in so far as gold is concerned we have held that no tax was payable nevertheless considering that we have held that tax was payable on purchase of capital asset, namely, motor vehicle, we find that no interference with the penalty under section 36(4A) is called for. Rule to tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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