R.A. Sharma, J.
1. The petitioner has filed this writ petition challenging notice dated July 20, 1989, issued by the Deputy Commissioner of Commercial Taxes, Dhanbad, calling upon it to show cause as to why penalty Under Section 16(9) of the Bihar Finance Act (hereinafter referred to as 'the State Act') read with Section 9(2A) of the Central Sales Tax Act (hereinafter referred to as 'the Central Act') be not imposed on it.
2. This writ petition was filed on July 31, 1989, and on August 2, 1989. This Court while admitting it passed an interim order staying the operation of the aforesaid notice with the observations that if the tax has already been paid on the sale or purchase of coal, no road permits shall be withheld.
3. On August 2, 1989 itself an order imposing penalty on the petitioner was passed, a copy of which has been filed as annexure 6 to the rejoinder-affidavit filed by the petitioner in reply to the counter-affidavit of the State.
4. At the time of final hearing, the learned counsel for the petitioner challenged the order of penalty also which was resisted by the learned S.C.I. saying that the said order has not been challenged in the writ petition although it has been filed as annexure 6 to the rejoinder-affidavit. The learned counsel for the petitioner, in this connection, while admitting that the writ petition which was filed against the notice only has not been amended so as to challenge the order of penalty, submitted that if the impugned notice is void ab initio, the order of penalty passed pursuant thereto will fall on the ground automatically after the notice is set aside. The learned S.C.I. has disputed the above submission.
5. The submission of the learned counsel for the petitioner is that the impugned notice is illegal and without jurisdiction because the Central tax on inter-State sale of goods is not required to be paid if the State tax on the sale/ purchase of the same goods inside the State has already been paid. Accordingly, he submits that Sub-Sections (5) and (9) of Section 16 of the State Act read with Section 9(2A) of the Central Act cannot be applied to the petitioner's case. The learned S.C.I. has disputed the said submission.
6. The sales tax in this State is a single point tax to be levied on the first sale of the goods. The petitioner purchased coal from the subsidiary of the Coal India Limited after paying the tax on the same. It manufactured coke out of the coal so purchased. The coke so produced was sold by it. It appears, as is clear from the latter part of paragraph No. 7 of the counter-affidavit and the impugned notice, that the petitioner filed returns under the State Act disclosing intra-State sales of coke but after the notice was issued by the department to it Under Section 20(1)(a) of the State Act read with Section 9(2A) of the Central Act, it filed modified returns disclosing inter-State sales. Although the petitioner filed the modified returns disclosing inter-State sales but it did not deposit the admitted Central tax in terms of Section 16(5) of the State Act. Sub-section (9) of Section 16 of the State Act has provided that if a dealer fails to make payment of admitted tax under Sub-section (5) of Section 16 within the specified time, the prescribed authority shall, after giving an opportunity of being heard to him, impose penalty on him. As the petitioner did not pay the admitted tax in terms of Sub-section (5) of Section 16, the impugned notice under Sub-section (9) of Section 16 of the State Act read with Section 9(2A) of the Central Act was issued to it.
7. It is true that this Court had laid down that coal in any form is not a distinct subject-matter for taxation and if the tax has been paid on coal no tax is required to be paid on the sale of coke which is another form of coal. Reference, in this connection, may be made to Anil Hard Coke Industries v. State of Bihar [1988] 71 STC 322 (Pat). But this principle cannot be applied to the case of inter-State sale. Section 6 of the Central Act, which is a charging section, has laid down that every dealer is liable to pay the Central tax on the sale effected by him in course of inter-State trade or commerce. Sub-section (1-A) of the said section, which is reproduced below, has further laid down that the dealer has to pay the tax under the Central Act on the inter-State sale notwithstanding that no tax would have been leviable under the State law if that sale had taken place inside the State :
'6(1-A) A dealer shall be liable to pay tax under this Act, on a sale of any goods effected by him in the course of inter-State trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State).'
Every dealer who sells goods in the course of inter-State trade or commerce has to pay the tax under the Central Act. If he has paid the State tax on the sale of the same goods inside the State prior to their inter-State sale, the State tax has to be reimbursed to him. In this connection, Section 15(b) of the Central Act being relevant is reproduced below :
'15(b). Where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law, shall be reimbursed to the person making such sale in the course of inter-State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State.'
Rule 35 of the Bihar Sales Tax Rules, 1983, has provided for refund of the State tax paid under the State law in respect of sale or purchase of the declared goods inside the State if the said goods are sold in the course of inter-State trade or commerce, sub-Rule (1) of the said Rules being relevant is reproduced below :
'35. Refund necessitated by Clause (b) of Section 15 of the Central Sales Tax Act, 1956.--(1) Subject to the other provisions of this Rule, any tax paid under the Act in respect of the sale or purchase inside the State of any declared goods, shall, if the said goods are sold in the course of inter-State trade or commerce, be refunded to the dealer who has made the inter-State sale under the Central Sales Tax Act, 1956 (74 of 1956), in respect of such sale.'
The necessary consequence of the aforesaid provisions is that every dealer has to pay the Central tax on the sale of goods effected in the course of inter-State trade or commerce even if the State tax has already been paid by him on the sale of such goods inside the State. The only right & dealer can claim in such a case is the reimbursement Under Section 15(b) of the Central Act/refund Under Rule 35 of the Bihar Sales Tax Rules, 1983. As the petitioner has not paid the tax under the Central Act in terms of Section 16(5) of the State Act, the respondent, Deputy Commissioner of Commercial Taxes was fully justified to initiate the penalty proceeding against it Under Section 16(9) of the State Act. The impugned notice is thus perfectly valid. The submission of the learned counsel for the petitioner is therefore rejected.
8. Presuming that the order passed pursuant to a void notice falls to the ground automatically if the notice is set aside represents correct legal position even then the petitioner cannot succeed because in the instant case the impugned notice is perfectly valid.
9. It is true that in para 20 of the rejoinder-affidavit, the petitioner has sought quashing of the order of penalty which has been annexed as annexure thereto and described as annexure 6 to the writ petition. Next annexure (annexure 7) is a notice of demand issued pursuant thereto. The learned counsel for the petitioner has challenged the order imposing penalty on two grounds, which have been set out in the said rejoinder-affidavit, namely, (i) it has been passed in violation of the interim order passed on August 2, 1989 by this Court in this petition ; and (ii) if the tax has been paid on the coal, no tax is liable to be paid on the coke even if it has been sold subsequently in the course of the inter-State trade or commerce.
10. The first submission of the learned counsel for the petitioner has no merit. In Mulraj v. Murti Raghunathji Maharaj AIR 1967 SC 1386, the apex Court has laid down that mere order of stay does not take away the jurisdiction of the court/authority and its only effect is to prohibit them from proceeding further in the matter after the stay order comes to their knowledge. In the instant case, it is quite apparent that the order of penalty was passed before this Court's stay order was communicated to the concerned authority. The perusal of the penalty order clearly indicates that the petitioner has been making applications for adjournment before the assessing authority from time to time and on August 2, 1998 also, it made an application for adjournment on the ground that his counsel has gone out of station. The record does not disclose that the authority concerned was ever informed about the interim order dated August 2, 1989 passed by this Court before the order imposing penalty was passed.
11. The second ground of attack is the same which has been dealt with while dealing with the challenge to the impugned notice. For the reason given above, this submission is also rejected.
12. This writ petition is dismissed. No costs.
A.K. Prasad, J.
13. I agree.