TaxTMI 
TaxTMI 
1967 (2) TMI 91
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....ant period was Rs. 7,31,851. About this it was claimed by the Sangh that it was not liable to sales tax under the Act. The Sales Tax Officer considered the stand taken by the Sangh but in disallowing its claim he came to the conclusion that the sale pertaining to the cereals was also taxable. The contention of the petitioner before the Sales Tax Officer was that the cereals had been purchased by it from certain dealers in Ganganagar who were unconditionally exempt on the basis of exemption certificates held by them. It was also submitted that wheat was supplied by the Government departments and exemption was claimed in respect of such supply as well. The Sales Tax Officer, after considering the matter, came to the conclusion that the explanation to rule 15, which defined for purposes of the rules as to what was the first point in the series of sales, was attracted in the case and since the sale by the petitioner was the first sale in the series of sales by a registered dealer the petitioner was held liable to pay the sales tax. This assessment order was passed by the Sales Tax Officer on 10th February, 1964, and is exhibit 1 on the record. It is the validity of this assessment orde....
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....able turnover. Section 5 prescribes the rate of tax and the material portion which is relevant for our present purposes runs as follows: Section 5. Rate of tax.-The tax payable by a dealer under this Act shall be at such single point in the series of sales by successive dealers as may be prescribed and shall be levied at such rate not exceeding ten per cent on the taxable turnover, as may be notified by the State Government in the Official Gazette: ............................................................." Section 6 provides for registration of dealers. It enacts that every dealer liable to pay tax shall get himself registered in the prescribed manner. Section 16 provides for prosecutions and penalties for any person failing to get himself registered as required by the Act or who has without reasonable cause failed to pay the tax within the time allowed. Section 26 of the Act empowers the State Government to make rules to carry out the purposes of the Act. Sub-section (4) of this section provides that the power to make the rules conferred by this section shall be subject to the condition of the rules being made after previous publication. Sub-section (5) of t....
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.... for tax. Shri Hastimal, therefore, contends that it was not open to the rule-making authority to leave out dealers as such and confine the operation of rule 15 only to one class of such dealers, namely, the registered dealers. We have already set out above section 5 of the Act. On a proper analysis it seems to provide inter alia for two things: (i) that the tax is payable by a dealer under this Act at a single point in the series of sales by successive dealers; (ii) such single point may be prescribed by the rules. This section thus enables the Government to make the rules for prescribing at what point in the series of sales, sales tax shall be payable. Now, rules are made to carry out the purposes of the Act and the avowed purpose amongst others of the Act is to provide for the levy of a tax on the sale of goods in the State of Rajasthan. Section 3 of the Act lays down as to what is the incidence of taxation. It provides that subject to the provisions of the Act, every dealer whose turnover in respect of sales exceeds the prescribed limits, shall be liable to pay tax on his taxable turnover. What is noteworthy in this section is that it is subject to the other provisions of th....
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....l be for the taxing authority to take appropriate action against such dealers who have been shown to have sold the goods in question. In construing the explanation to rule 15, it may be pointed out, that so far as the enacting part of the rule is concerned it does not go contrary to section 5 of the Act, in any manner. In reading the explanation we have to construe it in harmony with the scheme of section 5 as well as that contained in the enacting part of rule 15. The explanation can be said to be ultra vires only if it cannot be so harmoniously read with the enacting part of rule 15, or the provisions of section 5 of the Act for that matter. Having devoted consideration to it, we are satisfied that the explanation does not appear to be out of tune with the scheme of the enacting part of the rule or with the provisions of section 5 of the Act. The explanation, as we have already pointed out, embodies only the normal rule that the assessing authority will follow, but thereby it is not precluded from proceeding against preceding dealers, if any, if they are liable to the payment of tax under the Act. Rule 15, as a whole, also does not go contrary to the provisions of the Act in that....