Civil Appeal No 5NT of 1975
From the Judgment and Order dated 159
1971 of the Allahabad High Court in Civil Misc
Writ Petition No 5324 of 1970
Prithvi Raj Mrs Rekha Joshi and Ashok K Srivastava for the Appellants
Manoj Swarup Ms Lalita Kohli and Pramod Swarup for the Respondent
The Judgment of the Court was delivered by 759 SABYASACHI MUKHARJI J
The question involved in this appeal is whether the respondent herein Ms Kasturi Lal Hat Lal is liable to the State of Uttar Pradesh for payment of the Central Sales Tax in respect of the transactions of sale of coal
The Sales Tax Officer in this case passed an order making the respondent liable for the payment of tax on certain transactions during the period from 1st October 1965 to 31st March 1966 amounting to Rs90854881 and tax liability was imposed at the rate of 2 thereof amounting to Rs 18170 98
The Sales Tax Officer found that the assessee carried on business in coal
The Sales Tax Officer noted that the Bilties concerning this kind of sale of coal had been prepared in the name of the dealer
The dealer endorsed these Bilties RRs and gave these to the diverse parties in UP
The parties in UP on receiving these Bilties got the goods released
The dealer admitted that the Bilties RRs having been endorsed to the parties in UP were given to them at the time while the goods were in the state of movement between Bihar and UP The bills connected with Bilties RRs of this kind had also been prepared by the dealer and the money had been realised by the dealer from the purchasing parties
The Sales Tax Officer was of the view that the sale of coal effected in that manner came under interstate sale and as such was liable under section 3b of the  by transfer of document when the goods were in movement
It was the case of the dealer that the goods had been sold to an unregistered dealer and he too was not a registered dealer for the year 1965 66
Therefore there was no question of imposition of any Sales Tax
The Sales Tax Officer did not agree with this view and imposed liability for the said Rs 18 170 98
Challenging the said imposition an application was moved before the High Court under Article 226 of the Constitution by the dealer
The application was allowed and the order of assessment was set aside
The High Court having considered the facts and circum stances of this case noted that the main contention raised on behalf of the assessee was that inasmuch as the movement of the goods had started from the State of Bihar the tax if any payable on such sales was assessable in Bihar and the Sales Tax Officer Lucknow had no jurisdiction to make the order of assessment
The High Court in the light of Section 91 of the was of the view that the appropriate State would be the Sales Tax Officer in Bihar and as such the imposition was not possible in the manner it was done
The assessee succeeded before the High Court on this ground
The question for determination is whether that is so 760 The High Court noted that in the previous case of Karam Chand Thapar and Bros Coal Sales Ltd vs The Sales Tax Officer Moradabad and others Civil Miscellaneous Writ No 4356 of 1969 the High Court had taken the same view on more or less identical facts on 24th of July 1970
We were told at the Bar that in the said matter leave had been granted under Article 136 of the Constitution by this Court
We wanted to know whether the matter had been disposed of by this Court and if so what was the fate of the same and had adjourned this appeal on this account
Neither the assessee nor the revenue has been able to enlighten us on this point
Under the hereinafter called the Act  Section 2a stipulates that the appro priate State means i in relation to a dealer who has one or more places of business situate in the same State that State ii in relation to a dealer who has places of busi ness situate in different States every such State with respect to the place or places of business situate within its territory
On the other hand clause b of section 2 defines dealer to mean any person who carries on whether regularly or otherwise the business of buying and selling in the manner indicated in sub clause b
It is not con fined to a registered dealer only
Section 3 is the charging section and is in Chapter II dealing with the formulation of principles for determining when a sale or purchase of goods takes place in the course of interState trade or commerce or outside a State or in the course of import or export
Sec tion 3 stipulates that a sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase a occasions the movement of goods from one State to another or b is effected by a transfer of documents of title to the goods during their movement from one State to another
There are two explana tions to that section and explanation 1 provides that where goods are delivered to a carrier or other bailee for trans mission the movement of the goods shall for the purposes of clause b be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee
Explanation 2 enjoins that if the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State
Section 6 deals with the liability to tax on inter State sales
Section 61 provides that subject to the other provisions contained in the Act every dealer is liable to pay tax under the Act on all sales effected by him in the course of inter State trade or com merce during any year on and from the date so notified
Sub section 1A of section 761 6 provides that a dealer shall be liable to pay tax under the Act on sale of any goods effected by him in the course of inter State trade or commerce notwithstanding that no tax would have been leviable whether on the seller or the purchaser under the sales tax law of the appropriate State if that sale had taken place inside that State
Subsection 2 of section 6 stipulates that notwithstanding anything contained in sub section 1 or sub section 1A where a sale of any goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another any subsequent sale during such movement effected by transfer of documents of title to such goods to the Government or to a registered dealer other than the Government if the goods are of the description referred to in sub section 3 of section 8 shall be exempt from tax under the Act
Sub section 2 of section 6 provides that no such subsequent sale shall be exempt from tax under that sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time or within such further time as that authority may for sufficient cause permit a a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in the prescribed form obtained from the pre scribed authority and b if the subsequent sale is made i to a registered dealer a declaration referred to in clause a of sub section 4 of section 8 or ii to the Government not being a registered dealer a certificate referred to in clause b of sub section 4 of section 8
Sub section 1 and sub section 2 of section 9 of the Act are material for our present purpose and read as follows 91 The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or commerce whether such sales fail within clause a or clause b of section 3 shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of subsection 2 in the State from which the movement of the goods commenced 2 Subject to the other provisions of this Act and the rules made thereunder the authorities for the time being empowered to assess re assess collect and enforce payment of any tax under general sales tax law of the appropriate State shall on behalf of the Government of 762 India assess re assess collect and enforce payment of taX including any penalty payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State and the provisions of such law including provisions relating to returns provisional assessment advance payment of tax registration of the transferee of any business imposition of the tax liabil ity of a person carrying on business on the transferee of or successor to such business transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family recovery of tax from third par ties appeals reviews revisions references compounding of offences and treatment of documents furnished by a dealer as confiden tial shall apply accordingly Provided that if in any State or part thereof there is no general sales tax law in force the Central Government may by rules made in this behalf make necessary provision for all or any of the matters specified in this sub section
 It is clear from the analysis of the scheme of the Act that the Central Government imposes tax and it is by the Central Government the tax is imposed for inter State sale but it is collected by the Government in accordance with the provisions of sub section 2 of section 9 of the Act in the State
It will be clear from sub section 2 of section 9 that the appropriate State imposes and collects the tax on behalf of the Government of India
The question is which is the appropriate State in a transaction of the nature or the type with which we are concerned Where tax on inter State sale was sought to be imposed
In order to be a sale or inter State transaction the sale must occasion the move ment of goods
Here in the instant case it appears that there were Railway receipts which were endorsed in favour of the parties in UP
It is by that endorsement that title was transferred to the purchases and that transaction occasioned the movement of the goods in other words caused inter State sales to take place namely the sale which occasions the movement of goods from one State to another from the State of Bihar to the State of UP Counsel for the revenue sought to urge at one point of time that as the railway receipts were endorsed in UP in favour of different 763 parties such a sale would not be an inter State sale that would have occasioned the movement of goods
If that is the position here which counsel for the revenue sought to urge then a tax on such sales as an internal sale might have been levied under the UP Sales Tax Act
But that would not be the case of sale on a transaction which occasions the move ment
For this purpose section 9 provides for the collection and levy by the appropriate Government
The appropriate Government means in relation to a dealer who has one or more places of business situate in the same State that State or in relation to a dealer who has places of business situate in different States every such State with respect to the place or places of business situate within its tern tory
It is not the position in the instant case
It was contended on behalf of the revenue that in the State of Uttar Pradesh the concerned Sales Tax Officer was fully competent to make the assessment
The High Court was of the view that this argument proceeded on an omission to consider the opening words of section 2 which is the definition clause and which makes the definitions given thereunder subject to the context
Sub section 1 of section 9 confers jurisdiction to make the levy and collection of the tax on the State where the movement of the goods commences and so the determinative test for discovering the jurisdiction of a particular State in an inter State sale is the place where the movement of the goods commences
The words appropriate Government given in sub section 3 of that section must necessarily refer to the State which by section 91 has been conferred jurisdiction to levy and collect the tax
The provisions must be harmonised
It was next contended that the case of the respondent fell within the ambit of the proviso to Section 91
We havenoted that the provisions of the proviso can apply only if the sale is by a registered dealer
Here the admitted position is that the dealer is not a registered one
It was urged on behalf of the revenue that inasmuch as section 7 of the Act required every dealer to obtain registration within the prescribed period and in the event of not obtaining such a registration penal conse quences ensue under section 10 of the Act the words regis tered dealer as used in the proviso to section 9 do not refer necessarily to a dealer who has obtained registration under section 7 but to a dealer who should have obtained such a registration
In other words counsel tried to import the equitable maxim by stating an argument in the manner that if registration in the facts of a particular case was compulsory then such registration should be deemed to have been made as by law enjoined that it should have been made
Equity it was said the maxim long time ago looks upon a thing as done which ought to have been done
 But that is not the position in a fiscal statute
The fiscal statute with which we are concerned recognised registration and 764 non registration and imposes liabilities on registration and consequences for non registration
It is not therefore possible to look upon a thing as done which ought to have been done for which Legislature has separately featured differently in a fiscal statute of this nature
The Act provides machinery provisions for the imposition and reali sation of the Central Sales Tax
It must be read in a com monsense point of view
It is clear here that registration of dealer is impor tant because the proviso states that in the case of sale of goods during their movement from one State to another the sale subsequent to first sale in respect of the same goods being also a sale which fell under sub section 2 of sec tion 6 the tax shall be levied and collected on a subse quent sale which had been effected by a transfer of docu ments of title to such goods by a registered dealer in the State from which the registered dealer obtained or as the case may be could have obtained the form prescribed in clause a of sub section 4 of section 8 of the Act in connection with purchase of such goods
Sub section 2 of section 6 provides that where a sale of goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another any subse quent sale during such movement effected by a transfer of documents of title to such goods to the Government or to a registered dealer other than the government if the goods are of the description referred to in sub section 3 of section 8 shall be exempt from tax under this Act
The proviso stipulates that no such subsequent sale shall be exempt from tax under this sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time a certificate as mentioned therein
In this case the subse quent sale if there be any in UP did not occasion the movement of the goods
It is therefore not subject to inter State sales tax
In that view of the matter we are of the opinion that the Sales Tax Officer in UP was not the appropriate au thority either to impose or collect the duty on inter State sale
The High Court was right in the view it took
This appeal must therefore be dismissed with costs
HLC Appeal dis missed


Summary:
Section 3 of the stipulates that a sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchasea occasions the movement of goods from one State to another or b is effected by a transfer of docu ments of title to the goods during their movement from one State to another
Sub section
1 of section 9 provides that the tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or com merce whether such sales fall within clause a or clause b of section 3 shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub section 2 in the State I from which the movement of the goods commenced and sub section
2 thereof provides that the authorities for the time being empowered to assess re assess collect and enforce payment of any tax under general sales tax law of the appropriate State shall on behalf of the Government of Indiaassess re assess collect and enforce payment of tax including any  etc
The respondent a dealer in coal had effected certain transactions by endorsing Bilties Railway Receipts made out in its name to various parties in Uttar Pradesh while the goods relating to the Bilties were in a state of movement from Bihar to Uttar Pradesh
The bills connected with such Bilties had also been prepared by the respondent which had realised the money from the purchasing parties
The Sales Tax Officer Lucknow was of the view that the sale of coal effected in this manner came under inter State sale and as such was liable under section 3b of the 
Disagreeing with the contention of the respondent that the goods having been sold to an unregistered dealer the respondent too being not a registered dealer during the particular year
there was no question of imposition of any sales tax the Sales Tax 757 Officer imposed the liability under that provision which was challenged by the respondent by a writ petition
The High Court allowing the petition set aside the order of assess ment
Dismissing the appeal HELD The Sales Tax Officer in Uttar Pradesh was not the appropriate authority either to impose or collect the duty on inter State sale
764G i Sub s1 of section 9 confers jurisdiction to make the levy and collect the tax on the State where the movement of the goods commences and so the determinative test for discovering the jurisdiction of a particular State in an inter State sale is the place where the movement of the goods commences
The words appropriate Government given in sub section
2 of that section must necessarily refer to the State which by section 91 has been conferred jurisdiction to levy and collect the tax
763D E ii It is clear from an analysis of the scheme of the that it is the Central Govern ment which imposes tax on inter State sale but it is col lected by the Government in accordance with the provisions of sub section
2 of section 9 of the Act in the State
It is clear from sub section
2 of section 9 that the appropriate State imposes and collects the tax on behalf of the Government of India
In order to be a sale or inter State transaction the sale must occasion the movement of goods
In the instant case there were Railway receipts which were endorsed in favour of the parties in UP
It is by that endorsement that title was transferred to the purchasers and that transaction occa sioned the movement of the goods in other words caused inter State sales to take place namely the sale which occasions the movement of goods from one State to another from the State of Bihar to the State of UP 762E G iii The proviso to section 91 can apply only if the sale is by a registered dealer
Here the admitted position is that the dealer is not a registered one
It was urged on behalf of the revenue that inasmuch as section 7 required every dealer to obtain registration within the prescribed period and in the event of not obtaining such a registration penal consequences ensue under section 10 the words registered deal er as used in the proviso to section 9 do not refer necessarily to a dealer who has obtained registration under section 7 but to a dealer who should have obtained such a registration
In other words counsel tried to import the equitable maxim by stating an argument in the manner that if registra 758 tion in the facts of a particular case was compulsory then such registration should be deemed to have been made as by law enjoined that it should have been made
Equity it was said looks upon a thing as done which ought to have been done
But that is not the position in a fiscal statute
The fiscal statute with which we are concerned recognises regis tration and non registration and imposes liabilities on registration and consequences for non registration
It is not therefore possible to look upon a thing as done which ought to have been done for which Legislature has separately featured differently in a fiscal statute of this nature
The Act provides machinery provisions for the imposition and realisation of the Central Sales Tax
It must be read in a commonsense point of view
763E H 764A B iv Sub section
2 of section 6 provides that where a sale of goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another any subsequent sale during such movement effect ed by a transfer of documents of title to such goods to the Government or to a registered dealer other than the govern ment if the goods are of the description referred to in sub section 3 of section 8 shall be exempt from tax under this Act
The proviso stipulates that no such subsequent sale shall be exempt from tax under this sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time a certificate as mentioned therein
In this case the subsequent sale if there be any in UP did not occasion the movement of the goods
It is therefore not subject to inter State sales tax
764D F