Appeal No 721 of 1972
From the Judgment and Order dated 13101970 of the Punjab  Haryana High Court in Civil Writ No 1831 of 1968
KS Suri for the appellants
RS Sharma and A D Mathur for the respondent
The Judgment of the Court was delivered by SARKARIA J
The short question involved in this appeal on certificate directed against a judgment of the High Court of Punjab and Haryana is Whether the sales made to
a dealer who has applied for registration under the Punjab General Sales Tax Act 1948 before his application is al lowed are to be treated as sales to an unregistered dealer or registered dealer when the registration is effected from the date of the application  Ms
Patiala Biscuits Manufacturers Pvt
Ltd hereinaf ter referred to as the assessees appointed Ms Rajpura Biscuit Company as their sole selling agents
The agents made an application on 111966 in the appropriate form for registration as a dealer under the Punjab General Sales Tax Act 1948 hereinafter called the Act
On the same day the agents referred hereafter as the purchasing dealer made a similar application for obtaining registration cer tificate under the Central Sales Tax Act
The appropriate Assessing Authority accepted both these applications and on March 27 1966 issued the registration Certificate with effect from 111966
The assessees filed their return for the quarter ending March 31 1966 in April 1966 and claimed deductions under section 52aii in respect of sales of the value of Rs 325626735 made by them between 1 1 1966 to 31 3 1966 to the purchasing dealer
The Assessing Authority Patiala rejected this claim and assessed tax amounting to Rs 19955894
on the proceeds of the sales made by the asses sees to the purchasing dealer between 111966 and 2731966
The reason given by the Assessing Authority for refusing this relief to the assessees was that during this period the purchasing dealer was not in possession 87 of the registration certificate the same having been issued only on March 27 1966
The assesses impugned the validity of this order of the Assessing Authority by a writ petition in the High Court under Articles 226227 of the Constitution
The High Court held that since the certificate of registration had been granted with effect from 1 1 1966 which was the date of the application it could not be said that the sales during this period commencing from 111966 were made to an unregis tered dealer
It further noted that apart from the asses sees the purchasing dealer had also been taxed with regard to the same transactions resulting in double taxation which was against the basic scheme of the Act the Rules and the notifications issued thereunder
On these premises the High Court allowed the writ petition and quashed the im pugned order to the extent to which it was contrary to s52aii of the Act in respect of sales made between 111966 and 2731966
The High Court however granted a certificate under article 1331a and c of the Constitu tion on the basis of which the Revenue has come in appeal to this Court
It would be appropriate to have at the outset a look at the relevant provisions of the Act and the Rules
The material provision is in section 52 a ii which reads as under In this Act the expression taxable turnover means the part of a dealer s gross turnover during any period which remains after deducting therefrom a his turnover during that period on   i   ii sales to a registered dealer of goods  declared by him in a prescribed form as being intended for re sale in the State of Punjab  
Provided that in case of such sales a declaration duly filled up and signed by the register dealer to whom the goods are sold and containing prescribed particulars on a pre scribed form obtained from the prescribed authority is furnished by the dealer who sells the goods
 Section 7 provides for the registration of dealers
It says 1 No dealer shall while being liable to pay tax under this Act carry on business as a dealer unless he has been registered and possesses a registration certificate
2 Every dealer required by sub section 1 to be registered dealer shall make appli cation in this behalf in the prescribed manner to the prescribed authority
3 If the said authority is satisfied that an application for registration is in order he shall in accordance with 7 240SCI77 88 such rules and on payment of such fees as may be prescribed register the application and grant him a certificate of registration in the prescribed forms which may specify the class or classes of goods for the purpose of sub clause ii of clause a of subsection 2 of section 5
4  5 When any dealer has paid the amount of penalty imposed under section 23 in respect of any contravention of sub section 1 of this section the Commissioner shall register such dealer and grant him a certificate of regis tration and such registration shah take effect as it had been made under sub section 3 of this section on the dealer s applica tion
In case a dealer commits default is not getting himself registered as required by Sec 7 certain consequences follow
Under s116 such a defaulting dealer is liable to be assessed on the basis of best judgment and the Assessing Authority may in addition to the tax so assessed impose on him by way of penalty a sum not exceeding one and half times that amount
Such a defaulter is further liable to prosecution under section 23 1 for carrying on business as a dealer in contravention of the provisions of section 71 and on conviction he can be sentenced to fine not exceeding Rs 1000 
The application for registration has to be made to the appropriate Authority in the prescribed Form
The manner in which such an application is to be dealt with by the Authority is provided in Rule 5 of the Punjab General Sales Tax Rules 1949 framed under the Act
This Rule as it stood before the amendment of October 10 1966 was as follows When the appropriate Assessing Authori ty after making any enquiry that he may think necessary is satisfied that the applicant is a bona fide dealer and has correctly given all the requisite information that he has deposit ed the registration fee into the appropriate Government treasury and that the application is in order he shall register the dealer and shall issue a Certificate of registration in Form STIII or ST IV according as the dealer has one or more than one place of business in Punjab
 Rule 5 was amended by Punjab Government Notification No GSR237PA 4648S 27Amd566 dated 10th October 1966 and in place of the last sentence commencing with the words in Form ST  of the old Rule the following was substituted   in Form ST IV which shall be valid from the date of receipt of application for registration by the Assess 89 ing Authority or from the date of commencement of the liability to pay tax whichever is later
 Ride 26 provides A dealer who wishes to deduct from his gross turnover the amount in respect of a sale on the ground that he is entitled to make such deduction under the provisions of subclause ii of clause a of sub section 2 of section 5 of the Act shall on demand pro duce in respect of such a sate the copy of the relevant cash memo or bill according as the sale is a cash sale or a sale on credit and a declaration in writing in Form ST XXII by the purchasing dealer or by his agent that the goods in question are intended for re sale in the State of Punjab or such goods are specified in his certificate of registration for use by him in the manufacture in the State
of Punjab of any goods for sale
 Rule 26 was also amended later
The amended Rule is in substance the same excepting that it was clarified that the dealer claiming deduction has to produce the declaration of the purchasing dealer in the prescribed form at the time of assessment
The main contention of Shri KS Suri learned Counsel for the appellant is that the declaration form prescribed under the old Rule 26 as it stood at the material time required the purchasing dealer to specify at the time of the sale in the prescribed Form ST XXII the number of the registration certificate
Stress has also been placed on the words registered and possesses used in sub section 1 of Sec 7 which according to Counsel indicate that a dealer having a taxable turnover cannot validly carry on his business unless he is actually registered and is in physical possession of the registration certificate issued under Sec 7
A compliance with the aforesaid mandatory requirement of section 71 and Rule 26 Form XXII proceeds the argument could be possible only if at the time of the sales in question the purchasing dealer as well as the selling dealer both were in actual possession of the requisite registration certificates
Shri Suri has adopted the reasoning of the Sales Tax Tribunal in Appeal No 109 of 1967 68 Ms Darshan Soap Mills Batala Road Amritsar vs The State decided on 12 2 1968
It is contended that Rule 5 as it stood at the material time did not empower the registering Authority to grant the registration Certificate retrospectively with effect from the date of the application
It is maintained such a power was conferred on the Authority only by the Punjab Govern ment Notification No GSR 237PA 4648S 27 Amd516 with prospective effect from October 10 1966
Taking the last point first we are of opinion that the amendment of Rule 5 by the Punjab Government Notification dated October 10 1966 did not confer any new or additional power on the registering Authority
The power to grant the registration Certificate with effect from the date of the application was already there
The amendment was only clarificatory of the law as it stood prior to it
It only 90 made explicit which was formerly implicit
A definite indication is available in the language of sub section 5 read with sub sections 2 and 3 of section 7 
itself that the registering Authority had the power to give effect to the registration from the date of making the application
Be that at it may the words has been registered and possesses a registration certificate used in sub section
1  of section 7 have to be construed in accord with the general tenor of the Section as a whole and in a manner which would avoid oppressive unreasonable and anomalous results
As rightly pointed out in Chandra Industries vs The Punjab State and ors1 it could never be the intention of the Legislature that a dealer liable to pay tax who has in compliance with the requirements of sub sections 2 and 3 of section 7 done all which lay in power to obtain the regis tration certificate should pull down his shutters and keep his business closed under pain of being punished under section 231 and await indefinitely the pleasure and leisure of the prescribed authority in issuing the registration certifi cate
Adoption such a construction would be to make the applicant liable to punishment for the laches and delays of the authority and its office As regards the requirement enjoined by the Form pre scribed under Rule
26 to enter the number of the registra tion certificate in the declaration of the purchasing dealer at the time of sale the same has to be viewed with rea sonable flexibility and reconciled with Rule 5 as clarified by the Notification dated October 10 1966
Thus con strued harmoniously with the related statutory provisions the requirement of Rule 26 will be substantially satisfied if the number of the registration certificate granted subsequently but covering retrospectively the period of the sales in respect of which deduction is claimed is supplied by the claimant along with the declaration of the purchasing dealer at the time of assessment to the Assessing Authority
It is thus clear as daylight that at the relevant time also the registering Authority was fully competent to issue the registration certificate to the dealer with retrospective effect from the date of filing the applica tion
A perusal of the registration certificate would show that it was in terms made effective from January 1 1966
This is manifest from the words the dealer is liable to pay tax wef
111966 used by the Authority prominently in the heading of the Certificate
It necessarily follows therefore that during the period from 111966 to 2731966 also the purchasing dealer was a registered dealer possessing a registration Certificate within the Contemplation of section 71 of the Act
This being the correct position the assessees were enti tled to the deduction under section 52aii of the Act in respect of the sales made by them to the purchasing dealer during the whole of the quarter ending 31st March 1966
The High Court was therefore right in determining the question posed in favour of the assessees and against the Revenue
The appeal fails and is dismissed with costs
PBR Appeal dismissed


Summary:
According to section 52aii of the Punjab General Sales Tax Act 1948 taxable turnover means the part of a deal er s gross turnover during any period which remains after deducting therefrom the turnover during that period on sales to a registered dealer of goods declared by him in a prescribed form as being intended for re sale in the State
Section 71 provides that no dealer shall carry on business as a dealer unless he has been registered and possesses a registration certificate
Rule 5 of the Punjab General Sales Tax Rules 1949 as amended in October 1966 provides that the certificate of registration issued by the Assessing Authority shall be valid from the date of receipt by him of the application for registration or from the date of Commencement of the liability to pay tax whichever is later
Rule 26 provides that a dealer claiming deduction under section 52aii shall produce on demand the cash memos or bill and a declaration in writing by the purchasing dealer that the goods specified in the certificate of regis tration are for use by him
The assessee respondent and the purchasing dealer the sole selling agent of the assessee made applications on January 1 1966 for registration as dealers
The registra tion certificates were issued to them on March 27 1966 with retrospective effect from January 1 1966
The Assessing Authority rejected the assessee s claim for deduction under section 52aii of sales made by them to the purchasing dealer on the ground that during the period between January 1 and March 31 1966 the purchasing dealer was not in possession of the registration certificate
In a petition under article 226 of the Constitution the High Court held that since the certificate of registration had been granted with effect from January 1 1966 ie the date of application it could not be said that the sales during the quarter were to an unregistered dealer
On appeal it was contended that to be entitled to deduc tion under the Act both the purchasing and selling dealers should be in physical possession Of the registration cer tificate at the time of sale
Dismissing the appeal HELD The assessees were entitled to deduction under section 52aii in respect of sales made by them to the purchas ing dealer during the quarter
90 G a At the relevant time the registering authority was fully competent to issue the registration certificate to the dealer with retrospective effect from the date of filing of the application
The amendment of r 5 made in October 1966 did not confer any new or additional power on the registering authority but was only clarificatory of the law
The language of section 7 is clear that the registering authority had the power to give effect to the registration from the date of making the application
90 F A 86 b The words has been registered and possesses a registra tion certificate in section 71 should be construed in accord with the general tenor of the section as a whole and in a manner which would avoid oppressive unreasonable and anomalous results
So construed it could never be the intention of the legislature that a dealer liable to pay tax who has in compliance with the requirements of section 72 and 3 done all which lay in his power to obtain the regis tration certificate should pull down his shutters and keep his business closed under pain of being punished and await indefinitely the pleasure and leisure of the prescribed authority in issuing the registration certificate
Adoption of such a construction would be to make an applicant liable to punishment for the laches and delays of the authority and its office
90 B C Chandra Industries vs The Punjab State  Ors 29 STO 558 approved
c The requirement of r 26 will be substantially satisfied if the number of the registration certificate is supplied by the claimant alongwith the declaration of the purchasing dealer at the time of assessment to the Assessing Authority
90 E