Mandatory Central sales tax registration cannot be substituted by enabling registration once inter-State sales begin.

A dealer registered under section 7(2) of the Central Sales Tax Act cannot be treated as registered under section 7(1), because the two provisions serve different purposes: section 7(1) requires compulsory registration once liability to Central sales tax arises on inter-State sales, while section 7(2) is an enabling registration for a dealer not yet liable under the Central Act. The scheme of section 8 confirms that section 7(2) does not replace mandatory registration under section 7(1). On that basis, a dealer who commenced inter-State sales without obtaining section 7(1) registration remained unregistered for the relevant period, and the penalty for assessment as an unregistered dealer was upheld.

---

---

Issues: (i) Whether a dealer registered under section 7(2) of the Central Sales Tax Act can be deemed to be a dealer registered under section 7(1) of that Act; (ii) whether, on the facts and in the circumstances, the penalty imposed under section 18(6) of the M.P. General Sales Tax Act read with section 9(3) of the Central Sales Tax Act was rightly set aside.

Issue (i): Whether a dealer registered under section 7(2) of the Central Sales Tax Act can be deemed to be a dealer registered under section 7(1) of that Act.

Analysis: Section 7(1) deals with compulsory registration of every dealer liable to pay tax under the Central Sales Tax Act, whereas section 7(2) permits registration by a dealer who is liable under the State sales tax law but is not yet liable under the Central Sales Tax Act. The scheme of section 8 shows that registration under section 7(2) serves a different purpose, namely enabling the purchasing dealer to obtain concessional purchases for resale or manufacture, and not substituting for the mandatory registration required under section 7(1) when a dealer begins inter-State sales. The two sub-sections operate in distinct fields and cannot be treated as equivalent.

Conclusion: A dealer registered under section 7(2) of the Central Sales Tax Act cannot be deemed to be registered under section 7(1) of that Act.

Issue (ii): Whether, on the facts and in the circumstances, the penalty imposed under section 18(6) of the M.P. General Sales Tax Act read with section 9(3) of the Central Sales Tax Act was rightly set aside.

Analysis: Since the assessee was liable to obtain registration under section 7(1) once it commenced inter-State sales and was not covered by section 7(2) for that purpose, it remained an unregistered dealer for the relevant assessment period. The penalty imposed for assessment as an unregistered dealer was therefore consistent with the statutory scheme, and the Tribunal was in error in setting it aside.

Conclusion: The penalty was not rightly set aside.

Final Conclusion: The reference was answered against the assessee on both questions, affirming the applicability of compulsory Central registration for inter-State sales and the validity of the penalty imposed for failure to obtain it.

Ratio Decidendi: Registration under the anticipatory or enabling provision for a dealer not yet liable under the Central Act does not satisfy the mandatory registration requirement that arises when the dealer becomes liable to pay Central sales tax on inter-State sales.

---