Case: M/S. Kanpur Vanaspati Stores, Kanpur Vs. The Commissioner Of Sales Tax, U.P. Lucknow

3 is the general provision. It provides for multipoint tax. To this general Rule certain exceptions are provided. One of the exceptions is that provided under Section 3A. That section permits the Government to select certain items of goods for a single point levy. Vanaspati is one of the items selected for a single-point levy. The appellant does not contest the competence of the legislature to enact Section 3A. It also does not contest the validity of the power conferred on the Government to select sale of certain goods for single-point taxation. What is contended on its behalf is that Section 3A provides that single-point levy can be imposed only on the "successive dealers" in the series of dealers; an importer is not one such dealer; he being the very first dealer in the State.Undoubtedly, an importer is one of the dealers. He is the first dealer in the State. The chain of successive dealers begins from the first dealer and it goes up to the last dealer. Any one of the dealers in this chain can be considered as a "successive dealer".The series do not begin in the middle. It must necessarily begin at the very beginning. This is also the view taken by the Allahabad High Court in Ram Kumar Rajendra Swaroop v. Commr. of Sales Tax, (1967) 19 STC 241 (All) . It is an obvious conclusion. If an importer is one of the successive dealers, which undoubtedly he is, necessarily the notification issued by the Government must be considered to be a valid notification. In this view we reject the last two contentions advanced by Mr. Gupte.9. Now turning our attention to the first contention advanced by Mr. Gupte, we find there are several difficulties in the way of accepting the same. As mentioned earlier the assessee in his return has shown what its turnover was and at what rate the tax is payable by it. It had admitted before the assessing authority what its turnover was. Further it had also admitted before that authority that it was liable to pay tax at the rate of one anna per rupee on its turnover which comes to Rs. 10,339.19P. It had also admitted before the same authority that it had collected that amount from its purchasers. It did not dispute before the assessing authority the validity of the notification issued under Section 3A. Under Rule 41 (2) read with Rule 12 it was bound to submit quarterly returns. We take it that it must have submitted its quarterly returns. Under sub-rule (2) of Rule 41 the assessee was bound to deposit the tax due from it according to its returns. In other words even according to the assessee it was bound to deposit into the Treasury or pay cheque to the assessing authority of Rs.. l0,339.19P. Admittedly, it had not done so. What is urged by the learned counsel is that whatever might be the facts admitted in the return and whatever might be the admissions made before the assessing authority it was open to the assessee to take a different stand in its memorandum of appeal and what is relevant for the purpose of Section 9 is the stand taken by the assessee in the memorandum of appeal. In support of that contention two decisions, one of the Allahabad High Court in Ghanshyam Dass Balmukund v. State of Uttar Pradesh, (1969) 23 STC 282 (All) , and the other of the Kerala High Court in United Timber and Cashew Products (P.) Ltd. v. Sales Tax Officer, Cannanore, (1971) 28 STC 526 = (1971 Tax LR 1245) (Ker) were cited. Those decisions undoubtedly support the contention of the Appellant but we find it difficult to accept the conclusions reached by the Allahabad High Court and the Kerala High Court. In his decision the learned single Judge of the Kerala High Court has merely followed the Allahabad High Courts decision. If we come to the conclusion that the expression "tax admitted" in the proviso to Section 9 (1) means that admitted in the memorandum of appeal, Section 9 can be made wholly useless. All that an assessee has to do is not to admit his liability in the memorandum of appeal, whatever his stand might have been before the assessing authority. Ordinarily no interpretation should be placed on a provision which would have the effect of making the provision either otiose or a dead letter. Further, to find out the true meaning of the expression "tax admitted" we must take into consideration the remaining words of the proviso namely "or such instalments thereof as may become payable". Those words furnish a key to the interpretation. If one of the conditions for maintainability of the appeal is payment of the instalments which have become payable under Rule 41 (2), It means that the admission that has got to be taken into consideration is that made before the assessing authority and not before the appellate authority. That apart, we do not think that the stand taken by the appellant before the appellate authority can be considered as a bona fide stand.We are of the opinion that the contention taken by the appellant before the appellate authority that it cannot be brought within the scope of Section 3A of the Act was an afterthought. No such contention was taken before the assessing authority. It the assessee believed that contention to be true it would not have collected from its purchasers the tax at the rate of one anna per rupee. Further it is now well settled by the decision of this court that no one can challenge the validity of a provision of an Act or Rule made thereunder or even a notification issued either under the Act or under the Rules made, before the authorities constituted under the Act. It is true as contended by Mr. Gupte that these decisions were rendered long after 1962 but the fact remains that the decisions in question merely interpret what the law is.

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

Explanation:
0[ds]It may be noted that Section 3 is the general provision. It provides for multipoint tax. To this general Rule certain exceptions are provided. One of the exceptions is that provided under Section 3A. That section permits the Government to select certain items of goods for a single point levy. Vanaspati is one of the items selected for a single-point levy. The appellant does not contest the competence of the legislature to enact Section 3A. It also does not contest the validity of the power conferred on the Government to select sale of certain goods for single-point taxation. What is contended on its behalf is that Section 3A provides that single-point levy can be imposed only on the "successive dealers" in the series of dealers; an importer is not one such dealer; he being the very first dealer in the State.Undoubtedly, an importer is one of the dealers. He is the first dealer in the State. The chain of successive dealers begins from the first dealer and it goes up to the last dealer. Any one of the dealers in this chain can be considered as a "successive dealer".The series do not begin in the middle. It must necessarily begin at the very beginning. This is also the view taken by the Allahabad High Court in Ram Kumar Rajendra Swaroop v. Commr. of Sales Tax, (1967) 19 STC 241 (All)  . It is an obvious conclusion. If an importer is one of the successive dealers, which undoubtedly he is, necessarily the notification issued by the Government must be considered to be a valid notification. In this view we reject the last two contentions advanced by Mr. Gupte.9. Now turning our attention to the first contention advanced by Mr. Gupte, we find there are several difficulties in the way of accepting the same. As mentioned earlier the assessee in his return has shown what its turnover was and at what rate the tax is payable by it. It had admitted before the assessing authority what its turnover was. Further it had also admitted before that authority that it was liable to pay tax at the rate of one anna per rupee on its turnover which comes to Rs. 10,339.19P. It had also admitted before the same authority that it had collected that amount from its purchasers. It did not dispute before the assessing authority the validity of the notification issued under Section 3A. Under Rule 41 (2) read with Rule 12 it was bound to submit quarterly returns. We take it that it must have submitted its quarterly returns. Under sub-rule (2) of Rule 41 the assessee was bound to deposit the tax due from it according to its returns. In other words even according to the assessee it was bound to deposit into the Treasury or pay cheque to the assessing authority of Rs.. l0,339.19P. Admittedly, it had not donewe come to the conclusion that the expression "tax admitted" in the proviso to Section 9 (1) means that admitted in the memorandum of appeal, Section 9 can be made wholly useless. All that an assessee has to do is not to admit his liability in the memorandum of appeal, whatever his stand might have been before the assessing authority. Ordinarily no interpretation should be placed on a provision which would have the effect of making the provision either otiose or a dead letter. Further, to find out the true meaning of the expression "tax admitted" we must take into consideration the remaining words of the proviso namely "or such instalments thereof as may become payable". Those words furnish a key to the interpretation. If one of the conditions for maintainability of the appeal is payment of the instalments which have become payable under Rule 41 (2), It means that the admission that has got to be taken into consideration is that made before the assessing authority and not before the appellate authority. That apart, we do not think that the stand taken by the appellant before the appellate authority can be considered as a bona fide stand.We are of the opinion that the contention taken by the appellant before the appellate authority that it cannot be brought within the scope of Section 3A of the Act was an afterthought. No such contention was taken before the assessing authority. It the assessee believed that contention to be true it would not have collected from its purchasers the tax at the rate of one anna per rupee. Further it is now well settled by the decision of this court that no one can challenge the validity of a provision of an Act or Rule made thereunder or even a notification issued either under the Act or under the Rules made, before the authorities constituted under the Act.