State of Orissa Vs. M.A. Tulloch and Co. - Court Judgment

Excerpt:
sales tax - registration certificate - section 5 (2) of orissa sales tax act, 1947, orissa sales tax (amendment) act, 1957 and rule 27 (2) of orissa sales tax rules, 1947 - respondent claimed deduction in respect of goods sold to registered dealer - state in pursuance of amendment filed memorandum of cross objection - tribunal upheld objection and directed for fresh assessment - matter referred to high court - court gave affirmative answer that copy of relevant cash receipt or bill necessary for deduction from gross turnover - renewal certificate of registration necessary for claim of deduction - declaration under rule 27 (2) not always necessary on part of selling dealer for claiming such exemption - sales tax officer satisfied by statement of dealer - decision of high court in favour of respondent upheld by apex court. - indian evidence act, 1872 section 3 :[dr.arijit pasayt, dr.mukundakam sharma & h.l.dattu,jj] circumstantial evidence murder case all incriminating facts and circumstances found to be incompatible with innocence of accused held, inference of guilt can be drawn. section 3: circumstantial evidence murder case - held, circumstances have to be shown to be connected with principal fact sought to be inferred. section 3: circumstantial evidence held, conviction can be based solely on circumstantial evidence. but it should be tested by touchstone of law relating to circumstantial evidence laid down by supreme court indian penal code, 1890 sections 300 & 304,part i : murder or culpable homicide - circumstantial evidence - deceased was doing money-lending business - accused persons and deceased were quarrelling over issue of payment of commission - after half an hour, dead body of deceased was found - evidence of witness who had business transaction with deceased, that both parties were quarrelling and appellant was holding handle of soil cutter at time of quarrel held, mere exchange of hot words by deceased and accused would not give him impression that appellant would take life of deceased. fact that he left the place on being told by deceased to do so, cannot be a ground to disbelieve his evidence. time gap when deceased was last seen alive in company of appellant and when his dead body was seen was not very large. conviction of appellant under section 304, part i instead of section 302 is proper. - it is for the sales tax officer to be satisfied that, in fact, the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts. but if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. in this case, the sales tax officer was satisfied by a mere statement of the dealer and it has not been shown that in fact the registration certificate of the buying dealer, m/s. 5. the appeals accordingly fail and are dismissed with costs.sikri, j.1. the respondent, hereinafter referred to as the dealer, filed a return for the quarter ending june 30, 1951, under the orissa sales tax act (orissa act xiv of 1947) (hereinafter referred to as the act). he claimed a deduction of rs. 2,40,000/- under s. 5(2)(a)(ii) in respect of the goods sold to a registered dealer, named m/s. lal & co. ltd., ba 1335. similarly, for the quarter ending september 30, 1951, he claimed a deduction of rs. 15,677/1/3. by two assessment orders passed under s. 12(2) of the act, the sales tax officer, cuttack iii circle, jaipur, orissa, determined the tax payable allowing the deduction of rs. 2,40,000/- and rs. 15,677/1/3, under s. 5(2)(a)(ii). the dealer filed appeals to the assistant collector, sales tax, challenging the assessment on grounds which are not relevant. the dealer later filed revisions against the decision of the assistant collector. while the revisions were pending, the legislature amended the orissa sales tax act, in 1957, by orissa sales tax (amendment) act (orissa act xx of 1957). the effect of this amendment was that revisions were treated as appeals to sales tax tribunal, and it enabled the government to file cross-objections. the state of orissa, in pursuance of this amendment, filed memorandum of cross-objections challenging the deduction of rs. 2,40,000/- and rs. 15,677/1/3, on the ground that the dealer had not produced any declaration, as required under r. 27(2) of the orissa sales tax rules, 1947, as evidenced from the check sheet kept on record. the tribunal upheld this objection and directed that fresh assessments be made. certain other questions were raised before the tribunal by the dealer, but as nothing turns on them as far as these appeals are concerned, they are not being mentioned. the tribunal stated a case to the high court and one of the questions referred to was 'whether the assessing officer was not wrong in allowing deductions of rs. 2,40,000/- for the quarter ending on 30-6-51 and rs. 15,677/1/3 for the quarter ending on 30-9-51 from the respective gross turnover of the applicant.' the high court, following its earlier decision in member, sales-tax tribunal, orissa v. messrs. s. lal & co. limited (1961) 12 s.t.c. 25 answered the question in the affirmative. the state of orissa having obtained special leave from this court, these appeals are now before us for disposal. 2. mr. ganapathy iyer, on behalf of the state of orissa, has contended before us that it is clear that r. 27(2) was not complied with, and, therefore, the sales tax officer was wrong in allowing the said deduction. the answer to the question referred depends on the correct interpretation of s. 5(2)(a)(ii), and r. 27(2). they read thus :- 's. 5(2)(a)(ii) - sales to a registered dealer of goods specified in the purchasing dealer's certificate of registration as being intended for resale by him in orissa and on sales to a registered dealer of containers or other materials for the packing of such goods. provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover.' 'rule 27(2). claims for deduction of turnover under sub-clause (ii) of clause (a) of sub-section (2) of section 5 - a dealer who wishes to deduct from his gross turnover on sales which have taken place in orissa the amount of a sale on the ground that he is entitled to make such deduction under sub-clause (ii) of clause (a) of sub-section (2) of section 5 of the act, shall produce a copy of the relevant cash receipt or bill according as the sale is a cash sale or a sale on credit in respect of such sale and a true declaration in writing by the purchasing dealer or by such responsible person as may be authorised in writing in this behalf by such dealer that the goods in question are specified in the purchasing dealer's certificate of registration as being required for resale by him or in the execution of any contract : provided that no dealer whose certificate of registration has not been renewed for the year during which the purchase is made shall make such a declaration and that the selling dealer shall not be entitled to claim any deduction of sales to such a dealer.' 3. it is plain from the terms of s. 5(2)(a)(ii) that a selling dealer is entitled to a deduction in respect of sales to a registered dealer of goods, if the goods are specified in the purchasing dealer's certificate of registration as being intended for re-sale by him in orissa. no other condition is imposed by the above section. the proviso deals with consequences that follow if the purchasing dealer uses them for purposes other than those specified in his certificate of registration, and directs that, in that event, the price of goods so utilised shall be included in his turnover. therefore, there is nothing in the section itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer. but mr. ganapathy iyer says, be it so, but the rule making authority is entitled to make rules for carrying out the purposes of the act, and r. 27(2) is designed to ensure that a buying dealer's certificate of registration does, in fact, mention that the goods are intended for resale by him, and for that purpose it has chosen one exclusive method of proving the fact before a sales tax officer. he further urges that no other method of proving that fact is permissible. rule 27(2) is mandatory and if there is breach of it the selling dealer is not entitled to deduction. the learned counsel for the respondent, on the other hand, contends that r. 27(2) is directory. he points out that the word 'shall' should be read as 'may', in the context. he further says that supposing the selling dealer brought the original certificate of registration of a buying dealer and produced it before the sales tax officer, according to the appellant, this would not be enough, but this could never have been intended. in our opinion, r. 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory. but the rule must be substantially complied with in every case. it is for the sales tax officer to be satisfied that, in fact, the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts. but if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2), before being entitled to a deduction. 4. we are, therefore, of the opinion that the high court came to a correct conclusion. the high court is correct in holding that the production of a declaration under r. 27(2) is not always obligatory on the part of a selling dealer when claiming the exemption. it is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of s. 5(2)(a)(ii) of the act. in this case, the sales tax officer was satisfied by a mere statement of the dealer and it has not been shown that in fact the registration certificate of the buying dealer, m/s. s. lal & co., did not contain the statement that the goods were intended for resale by him in orissa. 5. the appeals accordingly fail and are dismissed with costs. one set of hearing fee. 6. appeals dismissed.