Y.V.Dixit, President -
(1.) THIS is a revision application against an order made by the Additional Collector of Sales Tax, Bombay City Division, (Revision), Bombay, on the28th April, 1959 and the point raised on behalf of the applicants by Mr. Patel is that the applicants were not liable to pay the purchase tax under Section 10(a) of the Bombay Sales Tax Act, 1953. The facts which have a bearing upon the question seem to be these.
(2.) THE applicants had business in waste paper and rags. The period of assessment with which this case is concerned is from 1st April, 1954, to 31st March, 1955. The applicants do not maintain any regular books of account. When the Sales, Tax Officer had to deal with the assessment he held that the applicants were liable to pay the purchase tax under Section 10 (a) of the Act and directed that a sum of Rs. 1,639 -14 -0 should be recovered from the applicants. This order was questioned by the applicants before the Assistant Collector of Sales Tax who agreed with the conclusion of the Sales Tax Officer and dismissed the applicants' appeal. From the appellate order an application for revision was filed by the applicants before the Additional Collector of Sales Tax who, by his order of the 28th April,1959, dismissed the application and it is this last order which has been questioned on this revision application. The Section which imposes upon a dealer the liability to pay a purchase tax arises from Section 10(a) of the Act of 1953 and this is not in dispute, but Mr. Patel relies upon Section 10a which by Sub -section (1) provides
10A. (1) Notwithstanding anything contained in Section 8 or 10, a registered dealer who is liable to pay the purchase tax under Clause (a) of Section 10 on the purchases of goods (hereinafter called the said goods) may elect to pay either (a) the purchase tax on such purchases or (b) the sales tax, if any, on the sale of the said goods when they are sold without being processed or altered in any manner. If he elects to pay the purchase tax on the purchase of the said goods, he shall not be liable to pay the sales tax on the sale of the said goods and if he elects to pay the sales tax on the sale of the said goods, he shall not be liable to pay the purchase tax, on the purchase of the said goods.
Section 10A(2) says that such election shall be made by an application to the Collector in the prescribed form and manner and within the prescribed period. It is clear from Section 10A(1) that a dealer has to make a choice and there are two alternatives given to him, which means that he has to make an election. A dealer may elect to pay the purchase tax or he may elect to pay the sales tax. If he elects to pay the sales tax he is not required to pay the purchase tax and if he elects to pay the purchase tax he is not required to pay the sales tax. This is the scheme of Section 10A(1). The election must be reduced to writing and must be, therefore, contained in an application made within the prescribed period and in the prescribed form. If the applicants have made the election within the meaning of Section 10A, Mr. Patel's argument is correct. But the point which now arises is did the applicants make an election ? When the case was heard by the Sales Tax Officer no such election was canvassed on behalf of the applicants before that authority and he, therefore, concluded that the applicants were liable to pay the purchase tax. In appeal, however, reliance was placed upon the fact that the applicants did make an application. For the argument the applicants relied upon an acknowledgement. Upon this, the Assistant Collector of Sales Tax called for a report and in the report it was pointed out that the initials in the receipt or the acknowledgement did not tally with any initials on the muster roll during the month of August,1954. The date of the receipt, as it appears on the record, is 12th August,1954 and it so happens that the application alleged to have been made is not traceable from the record. The appellate authority, therefore, concluded that there was no definite proof of the applicants, having filed an application for election as alleged by them. The Additional Collector of Sales Tax also was not satisfied that the applicants had made an application about election and various reasons were given by him in support of that view. The Additional Collector stated that the proprietor, though present at the assessment proceedings, did not call the attention of the authority to the election alleged to have been made by him and the Additional Collector of Sales Tax concluded that it was surprising that there was complete silence on the part of the applicants in the matter of the election. 'The Additional Collector considered that the receipt of the acknowledgement was not a genuine one, pointing out again that the initials on the acknowledgement did not correspond to any such initials as recorded in the muster roll. But what surprises one most is the statement of Mr. Desai before the revising authority when he stated that the proprietor was not aware regarding the election having been made by his accountant. Now, if art application for election is made and signed by the proprietor it is difficult to understand how the proprietor could be unaware of an application signed by him self. This raises a strong suspicion that the application was not, in fact, made and that the alleged acknowledgement is not a genuine one. If the applicants did not make the application as contemplated by Section 10A(2), Mr. Patel cannot rely upon Section 10A(1) and if Mr. Patel cannot rely upon Section 10A(1), the liability of the applicants must arise under Section 10(a). That is the view which has been taken by the authorities below and for the reasons given above, the view appears to us to be plainly right.
(3.) BUT Mr. Patel strongly relies upon the circumstances that in the returns which the applicants made the fact that they had collected the sales tax has been recorded. Mr. Patel argues that this strongly shows that the applicants had made an election. Now, an election has to be made by an application in the prescribed form and before the prescribed date. As we take the view that, in fact, no application was made by the applicants the fact that in returns the collection of sales tax by the applicants have been shown does not assist Mr. in his contention. But even assuming that the circumstance has a bearing upon the question at issue, it is clear that the statement made by the applicants in the returns is a statement made by the applicants in their own favour. It has, therefore, no evidentiary value. The applicants collected the sales tax and showed the collection in the returns submitted by them. This is about all, but it does not go to prove the applicants' case.;