Case: Assessing Authority, Patiala District Patiala Andors Vs. M/S. Patiala Biscuits Mfg. Co. Now As Dalmiabiscuit Pvt. Lt

gross turnover the amount in respect of a sale on the ground that he is entitled to make such deduction under the provisions of sub-clause (ii) of clause (a) of sub-section (2) of Section 5 of the Act, shall, on demand, produce in respect of such a sale the copy of the relevant cash memo or bill, according as the sale is a cash or a sale on credit, and declaration in writing in Form S.T. 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." 11. 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. 12. The main contention of Shri K. S. Suri, learned 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 S.T. XXII, the number of the registration certificate. Stress has also been placed on the words "registered and possesses" used in sub-section (1) of Section 7, which according to Counsel, indicate that a dealer having a taxable turnover, cannot validity carry on his business, unless he is actually registered and is in physical possession of the registration certificate issued under Section 7. A compliance with the aforesaid mandatory requirement of Section 7 (1) 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 M/s. Darshan Soap Mills, Batala Road, Amritsar vs. The State. 13. 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 that such a power was conferred on the Authority, only by the Punjab Government Notification No. GSR-237/PA 46/48/S-27/Amd. (5)/16 with prospective effect from October 10, 1966. 14. 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 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. 15. Be that as 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 Ors., 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 his power to obtain the registration certificate, should pull down his shutters and keep his business closed under pain of being punished under Section 23(1) and await indefinitely the pleasure and leisure of the prescribed authority in issued the registration certificate. Adoption of such a constitution would be to make the applicant liable to punishment for the laches and delays of the authority and its office." 15. As regards the requirement enjoined by the Forms prescribed under Rule 26, to enter the number of the registration certificate in the declaration of the purchasing dealer at the time of sale, the same has to be viewed with reasonable flexibility and reconciled with Rule 5 as clarified by the Notification, dated October 10, 1966. Thus construed 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. 17. 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 application. 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 w.e.f. January 1, 1966" used by the Authority, prominently, in the heading of the Certificate. 18. It necessarily follows therefore, that during the period from January 1, 1966 to March 27, 1966, also the purchasing dealer was a registered dealer possessing a registration Certificate within the contemplation of Section 7(1) of the Act. This being the correct position, the assessees were entitled to the deduction under Section 5(2) (a) (ii) of the Act in respect of the sales made by them to the purchasing dealer during the whole of the quarter ending March 31, 1966. The High Court was therefore, right in determining the question posed, in favour of the assessees and against the Revenue.

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

Explanation:
0[ds]14. 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 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 application15. As regards the requirement enjoined by the Forms prescribed under Rule 26, to enter the number of the registration certificate in the declaration of the purchasing dealer at the time of sale, the same has to be viewed with reasonable flexibility and reconciled with Rule 5 as clarified by the Notification, dated October 10, 1966. Thus construed 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 Authority17. 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 application. 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 w.e.f. January 1, 1966" used by the Authority, prominently, in the heading of the Certificate18. It necessarily follows therefore, that during the period from January 1, 1966 to March 27, 1966, also the purchasing dealer was a registered dealer possessing a registration Certificate within the contemplation of Section 7(1) of the Act. This being the correct position, the assessees were entitled to the deduction under Section 5(2) (a) (ii) of the Act in respect of the sales made by them to the purchasing dealer during the whole of the quarter ending March 31, 1966. The High Court was therefore, right in determining the question posed, in favour of the assessees and against the Revenue.