Case: Central Potteries Ltd Vs. State Of Maharashtra &amp; Others

registration certificate on July 21, 1947 had been cured. He also further held that the liability of the appellant to pay sales tax was not affected by the invalidity of the registration under S. 8. In the result he dismissed the suit with costs.4. Against this decision appellant preferred an appeal to the High Court of Nagpur and that was heard by a Bench of the Bombay High Court to which it stood transferred under the States Reorganisation Act. The learned Judges held that the question whether the registration of the appellant as dealer under S. 8 of the Act was valid or not did not call for a decision as even if it was invalid that did not affect its liability to be assessed to sales tax and in that view they dismissed the appeal with costs but granted a certificate under S. 109, C. P. C. and Art. 132(2) of the Constitution.5. In our judgment the High Court is clearly correct in its view that the appellant was liable to pay the tax under the Act irrespective of whether the registration under S. 8 was valid or not. That liability arose under S. 4 which is the charging section. Section 4 is as follows:"4(1)(a). In Madhya Pradesh excluding the merged territories every dealer whose turnover during the year preceding the commencement of this act exceeded the taxable quantum shall be liable to pay tax in accordance with the provisions of this Act on all sales effected after the commencement of this Act."This liability is not conditional on the registration of the dealer under S. 8. Section 8(1) enacts that "no dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered as such and possesses a registration certificate". Section 11(1) provides that "if the Commissioner is satisfied that returns furnished by a registered dealer in respect of any period are correct and complete, he shall assess the dealer on them". These provisions do not, to any extent, affect the substantive liability to be assessed to tax which is imposed by S. 4.A dealer who fails to get himself registered would be hit by S. 8(1) and may lose the benefit conferred by S. 11(1) but the Act does not put him in a better position than a dealer who has got himself registered under S. 8(1) and absolve him from his liability to pay tax under S. 4. The position of the dealer who has obtained a certificate of registration which turns out to be invalid cannot on principle be distinguished from that of one who has failed to obtain a certificate.6. It was argued for the appellant that it would make a difference in the procedure prescribed for making assessment whether a dealer was registered or not. It was said that under S. 10(1) while every registered dealer is under an obligation to make returns for the purposes of assessment, a dealer who is not registered becomes liable to send the return only if he is required to do so by the Commissioner by notice served in the prescribed manner and Rule 22 which has been framed for carrying out the purpose of S. 10(1) provides that if the Commissioner is of opinion that a dealer other than a registered dealer is liable to pay tax, he may send a notice to him in a form prescribed therein, requiring him to furnish returns. It is contended that the jurisdiction of the Sales Tax Officer to take proceedings for assessment with respect to non-registered dealers depends, on the issue of a notice such as is prescribed by S. 10 and Rule 22 and that as no such notice had been issued in the case of the appellant, the assessment proceedings certificate is invalid. We see no force in this contention. The taxing authorities derive their jurisdiction to make assessments under Ss. 3 and 11 of the Act, and not under S. 10, which is purely procedural. The appellant had itself, acting under S. 10 (1), been submitting voluntarily returns on which the assessments had been made and it is now idle for it to contend that the proceedings taken on its own returns are without jurisdiction.7. In this connection it should be remembered that there is a fundamental distinction between want of jurisdiction and irregular assumption of jurisdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, but has assumed it otherwise than in the mode prescribed by law, is not a nullity. It may be liable to be questioned in those very proceedings, but subject to that it is good, and not open to collateral attack. Therefore even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under S 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of as passed in those proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that S. 10(1) had not been followed. This must a fortiori be so when the appellant has itself submitted to jurisdiction and made a return. We accordingly agree with the learned Judges that even if the registration of the appellant as a dealer under S. 8 is bad that has no effect on the validity of the proceedings taken against it under the Act and the as of tax mad thereunder.8. We should add that S. 21 of the Act bars the jurisdiction of Civil Courts to entertain suits calling in question any orders passed by the authorities under the Act, and in the view which we have taken it is unnecessary to go into the question whether in view of this section the present suit is maintainable.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]5. In our judgment the High Court is clearly correct in its view that the appellant was liable to pay the tax under the Act irrespective of whether the registration under S. 8 was valid orliability is not conditional on the registration of the dealer under S. 8. Section 8(1) enacts that "no dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered as such and possesses a registration certificate". Section 11(1) provides that "if the Commissioner is satisfied that returns furnished by a registered dealer in respect of any period are correct and complete, he shall assess the dealer on them". These provisions do not, to any extent, affect the substantive liability to be assessed to tax which is imposed by S. 4.A dealer who fails to get himself registered would be hit by S. 8(1) and may lose the benefit conferred by S. 11(1) but the Act does not put him in a better position than a dealer who has got himself registered under S. 8(1) and absolve him from his liability to pay tax under S. 4. The position of the dealer who has obtained a certificate of registration which turns out to be invalid cannot on principle be distinguished from that of one who has failed to obtain asee no force in this contention. The taxing authorities derive their jurisdiction to make assessments under Ss. 3 and 11 of the Act, and not under S. 10, which is purely procedural. The appellant had itself, acting under S. 10 (1), been submitting voluntarily returns on which the assessments had been made and it is now idle for it to contend that the proceedings taken on its own returns are without jurisdiction.7. In this connection it should be remembered that there is a fundamental distinction between want of jurisdiction and irregular assumption of jurisdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, but has assumed it otherwise than in the mode prescribed by law, is not a nullity. It may be liable to be questioned in those very proceedings, but subject to that it is good, and not open to collateral attack. Therefore even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under S 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of as passed in those proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that S. 10(1) had not been followed. This must a fortiori be so when the appellant has itself submitted to jurisdiction and made a return. We accordingly agree with the learned Judges that even if the registration of the appellant as a dealer under S. 8 is bad that has no effect on the validity of the proceedings taken against it under the Act and the as of tax mad thereunder.8. We should add that S. 21 of the Act bars the jurisdiction of Civil Courts to entertain suits calling in question any orders passed by the authorities under the Act, and in the view which we have taken it is unnecessary to go into the question whether in view of this section the present suit is maintainable.