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

2. The assessee who is a registered dealer under the Act is having his business at Kanpur. It carries on business in hydrogenated oil and washing soap. It also imports and distributes vanaspati as an agent of Malwa Vanaspati and Chemical Company Ltd., Indore.3. In these appeals we are concerned with the assessees assessment of sales tax for the assessment year 1957-58. Its return for that year disclosed a gross as well as net turnover of Rs. 1,66,387.03p. Along with its return the assessee paid Rs. 1, 060.30P towards the tax due. Before the assessing authority the assessee admitted that its tax liability was Rs. 10,339.19P. It is admitted as well as proved that the assessee had collected from its purchasers the said amount of Rupees 10,339.19P. The Sales Tax Officer after making certain enquiries came to the conclusion that the total turnover of the assessee during the assessment year in question was Rs. 58,06,132.30P. The assessee was given opportunity to show that the estimate made by the Sales Tax Officer was not correct. From the records of the case we find that as many as 30 adjournments were given to the assessee to establish its case but the assessee did not take advantage of those opportunities. The case was finally posted for hearing on 24th March, 1962. That day the assessee was absent; but it made an application for adjournment of the case by 15 days. That adjournment was not granted and it could not have been granted because the assessment would have been barred by the end of the financial year 1961-62. Hence the assessing authority, on the basis of its best judgment determined the turnover of the assessee at Rs. 58,06,l32.30P, and determined its tax liability at Rs. 3,62,691.62P, under S. 3-A of the Act.4. Against the order of assessment the assessee filed an appeal within 30 days from the date of the order of assessment. At the time of filing the appeal the assessee deposited only a sum of Rs. 1,600/-. It appears that the office of the Appellate Judge raised some objections as to the maintainability of the appeal. After receiving some explanation from the assessee the appeal was entertained and notice issued to the assessing authority. When the Sales Tax Officer put in his appearance in the appeal he objected to the maintainability of the appeal on the ground that the proviso to Section 9 of the Act had not been complied with. That objection was accepted and appeal was dismissed as not maintainable. Thereafter at the instance of the assessee certain questions were referred to the High Court for ascertaining its opinion. During the pendency of that reference the assessee filed a Writ Petition under Article 226 of the Constitution challenging the validity of the Notification issued under Section 3A. Thereafter another application was made under Art. 227 of the Constitution challenging the recovery proceedings. Both the Writ Petitions were dismissed. In the reference made by the Appellate Judge the High Court came to the conclusion that the appeal was properly dismissed.

Reasoning: 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.