AI Drafter 
TaxTMI 
TaxTMI 
1962 (12) TMI 47
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....x for the year 1960-61. Notwithstanding this fact, his learned counsel rather strenously urged that this view that his client is not liable for payment of sales tax is not correct. 3.. There is some significance in the nature of the attack that is made as against the order exhibit P-3, because, according to the learned Government Pleader, inasmuch as the party is not able to satisfy the authority concerned, that he is liable for payment of sales tax in the circumstances of this case, the order of cancellation of the certificate of registration issued under section 7(2) of the Central Sales Tax Act will have to be held to be valid. 4.. The petitioner obtained a certificate of registration under section 7(2) of the Central Sales Tax Act as is evidenced by exhibit P-1. 5.. The petitioner entered into a transaction, regarding what he calls a transaction by way of sale, under exhibit P-2. That was a transaction which was very strongly relied upon by the petitioner in respect of the assessment for the year in question to satisfy the officer that there has been a transaction of sale by the petitioner for the year in question which attracts his liability to pay sales tax. But so f....
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....r time under the sales tax law of the appropriate State, in view of the fiction created under section 7, subsection (2), he may be entitled to get a certificate of registration. 10.. Sub-section (3) of section 7 of the Central Sales Tax Act gives power to the authority concerned, to whom the application under subsection (1) or (2) is made, to register the applicant, if the authority is satisfied that the application is in conformity with the provisions of the Act and the rules made thereunder. 11.. Sub-section (4) of section 7 deals with (a) amending a certificate of registration granted under the Act, and (b) cancelling the certificate of registration issued by the authority, under the circumstances mentioned therein. 12.. Sub-section (5) again gives freedom to a party to apply, within the period mentioned therein, for cancellation of the registration certificate, and there is an obligation on the part of the authority to cancel the registration as desired by the applicant, except in cases where the dealer is liable to pay sales tax under the Central Act. It is further provided in this sub-section that the cancellation of the certificate of registration shall take effect ....
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....e of the pictures mentioned by him. The petitioner also states that the said amount has been received from M/s. Kumaraswamy & Co., and credited in their account. Finally, under exhibit P-5, the petitioner requests the Sales Tax Officer to reconsider the question, and not to cancel the certificate of registration issued to him. 16.. The Sales Tax Officer evidently was not satisfied with the explanation furnished by the petitioner, as will be seen from the order exhibit P-6 dated 10th January, 1962. After referring to the fact that during the years 1959-60 and 1960-61 the petitioner has been declared non-assessee and as such not liable to pay sales tax under the sales tax law of the appropriate State, and also to the notice issued by the officer under exhibit P-4 as well as the reply exhibit P-5 sent by the petitioner, the assessing authority finally says that the Central Sales Tax Registration Certificate No. 8-50/C issued to the petitioner is cancelled, and the petitioner was directed to return the original certificate as well as the unused forms with him forthwith. 17.. Therefore, it will be seen from the various matters mentioned above, that the one and only reason given by....
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.... a person who has ceased to carry on business or has ceased to exist, that is under a circumstance which has become more or less permanent or certain, the same idea must again be understood to be incorporated when dealing with the third contingency, namely, when a dealer registered under sub-section (2) of section 7 has ceased to be liable to pay tax under the sales tax law of the appropriate State or for any other sufficient reason. On the other hand, Mr. Subramonian Potti, learned counsel for the petitioner, urged that what the authority has actually done is not to consider the applicability of the third contingency under clause (b) of sub-section (4) of section 7, but to take into account the fact that the petitioner has not paid tax under the General Sales Tax Act in the State for the years 1959-60 and 1960-61. Payment or non-payment of tax under the sales tax law of the appropriate State for a particular year or years, according to the learned counsel, has no bearing in considering the question as to whether a dealer "has ceased to be liable to pay tax under the sales tax law of the appropriate State". According to the learned counsel, that condition can be said to be satisfie....
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....4)(b) deals with a dealer ceasing to carry on business or ceases to exist. That means that there must be some sort of permanency, i.e., when a dealer has stopped his business, or again when the dealer has ceased to exist, which means the dealer has become extinct or practically dead for the purposes of the Sales Tax Act. The expression, in my view, occurring in relation to a dealer who has been registered under sub-section (2) of section 7, has ceased to be liable to pay tax under the sales tax law of the appropriate State, which is the third contingency provided for taking action for cancellation of the certificate of registration, must bear the same meaning, namely that the dealer has practically placed himself in a more or less permanent position when no longer sales tax can be levied as against him under the State Statute. 23.. That is certainly not the approach made by the officer in this case, and, as I mentioned earlier, he has proceeded on the basis that in as much as the party has not paid tax under the General Sales Tax Act for the years 1959-60 and 1960-61, that fact by itself gives him jurisdiction to cancel the certificate of registration. That approach is absolutel....