RAJPUR FARMS LTD Vs. COMMISSIONER OF COMMERCIAL TAXES BIHAR PATNA

JUDGEMENT

(1.) THESE references under section 25 (1) of the Bihar Sales Tax Act, 1947 (hereinafter referred to as the Act), raise certain important questions of law. One of these references is by Lala Kailashpat Singhania (hereinafter referred to as the dealer) and another by the Commissioner of Commercial Taxes, Bihar (hereinafter referred to as the department ). The question referred by the Commercial Taxes Tribunal (hereinafter referred to as the Tribunal) on the application by the department is : "whether on the facts and in the circumstances of the case the decision of the Tribunal on the question of initiation of the proceeding under section 13 (5) of the Act is correct or not. " The questions referred on the application by the dealer are :

(2.) THE facts leading to the aforesaid references are few :- Shri Lala Kailashpat Singhania, the dealer, grew sugarcane in his agricultural farm and had been supplying the same to a local sugar mill, the value of which exceeded Rs. 15,000 (Rupees fifteen thousand) each year and yet the dealer had not got itself registered under the Act. During the period of the twelve months ending on the 30th of June, 1954, similar amount was received on the sale of sugarcane. Consequent upon this information, the Superintendent of Commercial Taxes, Champaran Circle, Motihari, within whose jurisdiction the dealer made the sales, recorded an order dated the 28th September, 1959, directing the issue of notice under section 13 (5) of the Act requiring the dealer to produce its books of accounts for the period from 1st April, 1955, to 30th June, 1959, at Motihari. The date fixed for the production of the books of accounts as per the said order was the 30th November, 1959. The notice required to be issued under the said order dated 28th September, 1959, was, however, not issued then. The Superintendent of Commercial Taxes discovered the omission only when the records of the case were put up before him on the 30th October, 1961. He then directed the office to send the notice immediately requiring the dealer to produce the books of accounts for the above period on the 29th of January, 1962. A notice under section 13 (5) of the Act was accordingly issued on the 10th January, 1962, and it is not in dispute that the said notice was duly served on the dealer. After seeking a few adjournments, the dealer filed a petition before the Superintendent of Commercial Taxes on the 13th October, 1962, denying his liability to be assessed in respect of his sales of sugarcane. Of the various objections raised denying his liability to be assessed, the two, which are relevant for the purposes of these references, were : (i) The levy of sales tax under the Act on sale of sugarcane crushed in a sugar factory was barred in view of the provisions of section 29 of the Control Act, inasmuch as it amounted to double imposition of tax on the sale of one and the same commodity, and (ii) the proposed assessment for the period sought to be assessed by the proceedings of section 13 (5) of the Act was time-barred in view of the proviso to section 13 (6) of the Act. The Superintendent of Commercial Taxes by his order dated the 1st October, 1962, rejected all the objections against the proposed assessment including the aforesaid two objections. With regard to the first of the two objections referred to above he held that the levy of sales tax under the Act and the levy of tax under the Control Act were two separate imposts authorised by two different enactments, both of which were constitutionally valid. With regard to the next of the two objections he held that the proceeding under section 13 (5) of the Act was initiated against the dealer on 28th September, 1959, and consequently the period for which the assessment made was not beyond time. He made a consolidated assessment under section 13 (5) of the Act for the period 1st April, 1955, to 30th June, 1959, after separately allocating the turnover on the sale of sugarcane into five parts (a) from 1st April, 1955, to 31st March, 1956, (b) from 1st April, 1956, to 31st March, 1957, (c) from 1st April, 1957, to 31st March, 1958, (d) from 1st April, 1958, to 31st March, 1959, and (e) from 1st April, 1959, to 30th June, 1959. The rate of sales tax as applicable to the aforesaid periods of allocation was levied. After an unsuccessful appeal to the Deputy Commissioner of Commercial Taxes, Tirhut Division, Muzaffarpur, on the validity of the assessment, the dealer appealed to the Tribunal. The aforesaid two objections were pointedly raised by the dealer before it. With regard to the question of limitation the dealer's case before the Tribunal was that the proceeding under section 13 (5) of the Act was initiated not by the order dated the 28th September, 1959, but only when a notice dated 10th January, 1962, under section 13 (5) of the Act was issued. It was urged that any period prior to 4 years from the said date could not, therefore, be assessed to sales tax in view of the proviso to section 13 (6) of the Act. It was further argued that even if the date of initiation of the proceeding under section 13 (5) of the Act was taken to be 28th September, 1959, namely, the date on which the order was made calling upon the office to issue notice under section 13 (5) against the dealer, even then the first few months of the year 1955-56 would be barred inasmuch as that period fell beyond four years from the date of the initiation of the proceedings. The dealer's contention that levy of sales tax on sale of sugarcane amounted to double taxation on the identical commodity at identical point, was reiterated. The Tribunal held : (i) that the proceeding under section 13 (5) of the Act would be deemed to have been initiated on the 10th January, 1962, that is, when a notice under section 13 (5) of the Act was issued to the dealer. To quote the words of the Tribunal,

(3.) IT was urged by Mr. Sudhir Chandra Ghose, appearing for the dealer, that the expression "period" occurring in the aforesaid sub-sections (5) and (6) of section 13 of the Act must retain the same meaning throughout the Act irrespective of the fact whether the assessment was that of a registered dealer or of a dealer who though liable to pay sales tax had wilfully failed to apply for registration. It was contended that one of the cardinal principles of interpretation of statutes was that it should connote the same meaning wherever that expression occurred in the statute unless a different meaning in one or more of the provisions was a compelling necessity. It was further submitted that since the Act imposed pecuniary burden upon the subject, the construction most beneficial to the subject must be adopted. In other words, according to the learned counsel for the dealer the expression "period" occurring in section 13 (5) must be understood in the same sense as was the meaning in the case of a registered dealer. If it was attributed a meaning different than that, as was done by the sales tax authorities, it would not only be a violation of the rules of interpretation of statutes but would also lead to an avoidable pecuniary burden on the dealer, namely, the subject. It was, therefore, submitted that the expression "period" in section 13 (5) of the Act must be understood as meaning "quarter of a year" or "a year" because according to the provisions of the charging section 4 read with rule 22 of the Act, a dealer was required to submit quarterly returns of its turnover and also an annual consolidated return in respect of the whole year. It was submitted that if this part of his contention was accepted then even in the case of a dealer whose assessment was proposed to be made under section 13 (5) of the Act, the period could not be the whole block of period howsoever long it was but would only be the units of a quarter of a year or a year during which the dealer, though liable to pay tax, had nevertheless wilfully failed to apply for registration. According to the learned counsel for the dealer the period even for an assessment under section 13 (5) of the Act must, therefore, be a quarter of a year or a year. The block of time during which the dealer failed to get itself registered must be split up into units of time as was unit of time in the case of a registered dealer. Referring to the facts of the case it was submitted that since the proceedings for assessment under section 13 (5) had been initiated only on the 10th January, 1962, when a notice under section 13 (5) of the Act was issued to the dealer, all periods falling beyond four years from the said date were barred for the purposes of assessment. In other words, according to the learned counsel for the dealer no assessment could be made in respect of any period falling beyond four years from the 10th January, 1962.