Deemed registration date allows stock tax adjustment under sales tax rules, subject to prescribed formalities.

A dealer whose registration certificate was amended to include country liquor with effect from the application date could claim adjustment of tax paid on stock held on that deemed registration date. The certificate, though earlier surrendered, had not been cancelled and therefore remained operative. Applying rule 7(3), registration took effect from the date of application, and the second proviso to rule 36 allowed adjustment of tax paid on purchases of stock held on that date, subject to the prescribed certificate and other formalities. The stock of country liquor held on 19 November 1976 therefore qualified for adjustment, provided the rule 36 requirements were satisfied.

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Issues: Whether a dealer, whose registration certificate was amended to include country liquor with effect from the date of application, was entitled under rule 36 of the Orissa Sales Tax Rules, 1947 to adjust the tax paid on purchase of stock held on that deemed date of registration against the admitted sales tax liability.

Analysis: The registration certificate, though surrendered earlier, had not been cancelled and therefore remained alive. The application for amendment to include country liquor was made on 19 November 1976, and the amendment granted later related back to that date. Under rule 7(3) of the Orissa Sales Tax Rules, 1947, registration becomes effective from the date of application. The second proviso to rule 36 permits a dealer to adjust from the admitted tax payable a sum equivalent to the tax paid on purchase of stock held on the date of registration, subject to the prescribed certificate and other formalities. On that basis, the stock of country liquor held on 19 November 1976 qualified for adjustment.

Conclusion: The dealer was entitled to claim adjustment of the tax paid on purchase of the country liquor stock held on 19 November 1976, subject to compliance with the formalities under the second proviso to rule 36 of the Orissa Sales Tax Rules, 1947.

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