DWARKA PRASAD, J. - (1.) THIS reference has been made by the Board of Revenue for Rajasthan at Ajmer under section 15 (3a) of the Rajasthan Sales Tax Act, 1954 (hereinafter called "the Act"), at the direction of this Court and following questions of law arising out of the order of the Board of Revenue dated 23rd January, 1970, have been referred : " (1) Whether the assessing authority was justified in treating the exemption certificate not valid, even when it was not properly cancelled ? (2) Whether the period of 30 days prescribed under rule 12 of the Act for filing renewal application is directory and whether the assessing authority was not competent to ignore the renewal on the ground of delay in the submission of the application and taking into consideration the turnover for the period from 1st April, 1957, to 5th May, 1957 ?" The assessee is a dealer registered under the Act and carries on the business of selling allopathic medicines. The Government of Rajasthan by Notification No. F. 21 (7)SR/55 dated 14th April, 1955, granted exemption from payment of sales tax to dealers in allopathic medicines subject to their obtaining an exemption certificate on payment of fixed annual fee of Rs. 10. The assessee obtained an exemption certificate in accordance with the aforesaid notification, regarding the sale of allopathic medicines on 3rd June, 1957, for the financial year 1957-58. During the proceedings for assessment of sales tax for the period from 1st April, 1957, to 31st March, 1958, the assessee claimed exemption on the basis of the aforesaid certificate in respect of sales of allopathic medicines for the period from 1st April, 1957, to 5th May, 1957, as the provisions in respect of exemption were modified by the notification dated 6th May, 1957. The assessing authority, namely, Commercial Taxes Officer, Jodhpur, disallowed the assessee's claim for exemption on the ground that he had applied for renewal of the exemption certificate on 7th May, 1957, while the exemption could have been granted under the notification dated 14th April, 1955, up to 5th May, 1957, only. According to rule 12 of the Rajasthan Sales Tax Rules, 1955, an application for granting an exemption certificate or renewal thereof could have been filed within 30 days, i. e. , up to 30th April, 1957.
(2.) THE assessee filed an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, who dismissed the appeal by his order dated 22nd June, 1962. THE assessee thereafter preferred a revision petition before the Board of Revenue for Rajasthan at Ajmer. A Division Bench of the Board of Revenue dismissed the revision petition by its order dated 21st March, 1969, holding that according to the notification dated 14th April, 1955, it was a condition precedent for obtaining benefit of the exemption that the assessee must hold a valid certificate of exemption. It was further held that the post-dated certificate could not form the basis of relief retrospectively. The assessee thereafter filed an application before the Board of Revenue under section 15 (1) of the Act, requesting it to refer to this Court questions of law arising out of its order passed on the revision petition. However, as the Board of Revenue failed to dispose of the application under section 15 (1) within the period of 180 days, the assessee applied to this Court under section 15 (3a) of the Act, praying that the Board of Revenue may be directed to refer three questions to this Court for its opinion. This Court, by its order dated 28th August, 1970, reframed the questions and directed the Board of Revenue to refer the questions mentioned above to this Court for its opinion. Thereupon, the Board of Revenue by its order dated 13th April, 1972, submitted a statement of case and referred the aforesaid two questions to this Court. Sub-section (2) of section 4 of the Act authorises the State Government, by issuing a notification in the Official Gazette, to exempt from tax under the Act any goods or class of goods or any person or class of persons on such conditions and on payment of such fee as may be specified in the notification, if in its opinion it is necessary or expedient in the public interest to do so. By the notification issued on 14th April, 1955, in exercise of the powers conferred under sub-section (2) of section 4 of the Act, the State Government exempted the sale of allopathic and homoeopathic medicines and drugs from tax on the condition that the dealer claiming exemption holds a valid certificate of exemption, for which a fixed annual fee of Rs. 10 was prescribed. It is not in dispute that the assessee held an exemption certificate under the aforesaid notification in respect of the financial years 1956-57. It is also not in dispute that the assessee submitted an application on 7th May, 1957, for renewal of the exemption certificate. The Sales Tax Officer, Jodhpur City, issued the exemption certificate to the assessee on 3rd June, 1957, and ordered that the turnover of the assessee of allopathic and homoeopathic medicines and drugs will be exempted from payment of sales tax up to 5th May, 1957. The said exemption certificate specifically mentions that "this certificate shall be valid till the 5th May, 1957, unless cancelled earlier". It may be pointed out here that the exemption certificate issued by the Sales Tax Officer was stated to be valid only up to 5th May, 1957, because the notification dated 14th April, 1955, was partially modified by the notification issued by the State Government on 6th May, 1957, with effect from that very day and thereafter the sale of allopathic and homoeopathic medicines and drugs were exempted from payment of sales tax subject to the dealer obtaining an exemption certification on the basis of his annual turnover. Before taking up the questions referred to this Court for consideration, it would be proper for us to refer to the provisions contained in the Rajasthan Sales Tax Rules relating to the procedure connected with the grant of exemptions under sub-section (2) of section 4 of the Act. Rule 8 prescribes that it shall be necessary for the person claiming exemption under a notification issued under section 4 (2) to obtain a certificate of exemption and in the absence of such certificate of exemption, such exemption shall not be allowed and such sales shall be liable to payment of sales tax. Rule 9 relates to fee to be paid by the dealer for obtaining the exemption certificate. Rule 10 provides that an application in form S. T. 1 shall be submitted by the dealer to the assessing authority within 30 days from the date of issue of the notification, for obtaining an exemption certificate according to the notification issued under sub-section (2) of section 4. Rule 12 provides that the exemption certificate granted under rule 10, unless it is cancelled or the business is discontinued, shall remain valid till the expiry of the assessment year in respect of which the fee is paid and it shall also continue to be valid thereafter provided the fee specified therefor is paid for each subsequent assessment year within 30 days or with any return that may fall due within 3 months before the commencement of any such year. Rule 14 provides for cancellation of exemption certificate by the assessing authority concerned, after giving the dealer a reasonable opportunity of hearing, if the assessing authority is satisfied that the dealer has contravened the provisions of rule 13 relating to maintenance of separate accounts in respect of the turnover of the goods mentioned in the certificate of exemption or has contravened any condition of the exemption certificate or if the certificate has been obtained by fraud.
(3.) NOW, we shall take up the first question referred to us as to whether the exemption certificate could be considered as invalid by the assessing authority even when it was not properly cancelled. The argument of the learned Additional Advocate-General who appeared before us on behalf of the revenue is that as the assessee did not submit an application for obtaining the exemption certificate within 30 days as required under rule 12, the exemption certificate granted by the Sales Tx Officer in favour of the assessee on 3rd June, 1957, was a nullity and the same was rightly ignored by the assessing authority as well as by the appellant authority and the Board of Revenue. The contention of the learned Additional Advocate-General is that the submission of an application for obtaining an exemption certificate within the prescribed period of 30 days was an essential pre-requisite for the Sales Tax Officer obtaining the jurisdiction to issue an exemption certificate. It was further contended that the Sales Tax Officer was a Tribunal of limited jurisdiction and if the essential pre-requisites were not complied with, there was total absence of jurisdiction. It is, of course, not denied nor it is disputed before us that the exemption certificate granted by the Sales Tax Officer on 3rd June, 1957, was not cancelled or set aside by any competent authority, either the Sales Tax Officer himself or by any higher authority in appeal or revision. The contention of Mr. Kakkar on the other hand is that the exemption certificate issued by the Sales Tax Officer in favour of the assessee was a valid certificate of exemption in spite of the fact that the application for obtaining such certificate was filed by the assessee beyond the period of 30 days. His submission is that once a certificate of exemption was granted by the Sales Tax Officer, the same could not be ignored by the taxing authority even if it was irregular or illegal, unless the same was set aside or cancelled, either by the assessing authority by recourse to proceedings for rectification under section 17 of the Act, or by the Board of Revenue in revision proceedings under section 14 of the Act. Learned counsel referred to sub-section (3) of section 26 of the Act and submitted that penalty for disobedience or breach of any provision of the Rules could be made punishable by the State Government with fine not exceeding Rs. 500, and in the case of a continuing offence with a fine not exceeding Rs. 25 for every day till the offence continues. Thus, the argument of the learned counsel for the assessee is that so long as the exemption certificate was neither cancelled nor set aside, the same could not be ignored by the Sales Tax Officer and the benefit of the exemption should have been allowed to the assessee for the period between 1st April, 1957, to 5th May, 1957. The question as to whether an order is a nullity or it is merely illegal, depends upon the question whether the act was done in breach of a mandatory provision. If the provision of a statute is only directory, an act done in contravention thereof is manifestly not a nullity. Even if the provision is couched in a mandatory form, yet the act done in breach thereof is not per se a nullity. In Ashutosh Sikdar v. Behari Lal Kirtania (1908) ILR 35 Cal 61, Mookerjee, J. , observed as under : " No hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of law which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas a nullity is a proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated. " Whether a provision falls under one category or another is not easy to decide, but in ultimate analysis the distinction between a nullity and an illegal order depends upon the nature, scope and object of a particular provision, in contravention of which the order was passed. A workable test in this respect was laid down by Coleridge, J. , in Holmes v. Russell (1841) 9 Dowl 487 in the following terms : " It is difficult sometimes to distinguish between an irregularity and a nullity, but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity. " ;