COMMISSIONER OF SALES TAX Vs. COOPER AND CO

JUDGEMENT

(1.) This is a reference under section 9(3) of the Central Sales Tax Act, 1956, read with section 34(1) of the Bombay Sales Tax Act, 1953, whereby the following questions have been referred to this Court for determination :

(2.) The relevant period for the purpose of the present reference is from the 1st of July, 1957, to the 31st of March, 1958, but the dispute between the parties centres round a part of that period, viz., the period from the 1st of July, 1957, to the 15th of November, 1957, it being the case of the respondents, who are the assessees, that they are entitled as from 1st July, 1957, to certain deductions granted by a notification dated the 6th of November, 1957, which was published and came into force on the 16th of November, 1957. It is, on the other hand, contended on behalf of the taxing authorities that the said notification cannot be given retrospective operation and that the deductions to which it refers could be availed of by the respondents only as from the date of the coming into force of the said notification, viz., the 16th of November, 1957. The Sales Tax Officer, by his order dated the 24th of March, 1961, held in favour of the taxing authorities and came to the conclusion that the deductions in question could be availed of only after the 15th of November, 1957. On appeal to the Assistant Commissioner of Sales Tax, that decision was confirmed on 1st September, 1961, and in revision to the Deputy Commissioner of Sales Tax, the same was also confirmed by his order dated the 30th of August, 1963. The assessees applied in revision to the Sales Tax Tribunal which, however, by its order dated 31st August, 1965, set aside the order of the Deputy Commissioner of Sales Tax and allowed the deduction in respect of tax as from the 1st of July, 1957. At the instance of the Commissioner of Sales Tax the above five questions have thereafter been referred to this Court for determination.

(3.) Before discussing the arguments advanced by the learned counsel on either side, it would be convenient to set out the relevant statutory provisions with which we are concerned in the present case. It may be mentioned that the charging section which is section 6 of the Central Sales Tax Act, 1956, came into force on the 1st of July, 1957. The material portion of the said section provides that, subject to the other provisions of the said Act, every dealer shall, with effect from the date when the said section came into force, be liable to pay tax under the said Act "on all sales effected by him in the course of inter-State trade or commerce during any year on and from the date so notified". Section 9(1) of the said Act, as it stood at the time material for the purpose of this reference, enacted that the tax payable by a dealer under the said Act was to be levied and collected in the appropriate State by the Government of India in the manner provided in sub-section (2) of that section. Sub-section (2) then proceeded to lay down that the authorities for the time being empowered to assess, collect and enforce payment of tax under the general sales tax law of the appropriate State should, on behalf of the Government of India and subject to any rules made under the said Act, assess, collect and enforce payment of any tax under the said Central Act in the same manner as the tax on the sale or purchase of goods under the general sales tax law of the State was assessed, paid and collected. Section 13(1) of the said Central Act empowers the Central Government by notification in the Official Gazette to make rules providing inter alia [clause (b)] for the period of turnover, the manner in which the turnover in relation to the sale of any goods under the said Act was to be determined, "and the deductions which may be made in the process of such determination". In exercise of the powers conferred upon it by the said sub-section (1) of section 13 of the Central Sales Tax Act, 1956, the Central Government has added to rule 11 of the Rules framed under the Central Sales Tax Act, 1956, a new sub-rule, the material portion of which is as follows :