LexTHE STATE OF BIHAR versus RAI BAHADUR HURDUT ROY MOTI LALL JUTE MILLS & ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
f • • S.C.R. SUPREME COURT REPORTS 331 case started, to modify the sentence passed. In our view, a sentence of simple imprisonment for the period already served and· a fine of R~. JOO with simple: imprisonment for a period of fifteen days in default of payment of the fine for ea_ch appellant will be sufficient in this case and we order accordingly. Subject to this modification of the sentence, this appeal is dismissed. Appeal disrnissed. THE STATE OF BIHAR v. RAI BAHADUR HUI~DUT ROY MOT! LALL JUTE :MILLS & ANOTHER (and connected appeal) (B. P. SINHA, C.J., P. B. GAJENDR.AGADKAR, K. SuBBA Rao, K. 0. Das GUPTA and J.C. Sn.AH, JJ.) · Sales Tax-Amount realised by registered dealer from sales outside the State-Forfeitu.re of such amotmt-Validity-.Allowablo deduction, meaning of-Bihar Sales Tax Act, r947 (XIX of r947), ss. 5, 6, 7, 8, r4A Proviso, 3:;, r. rg proviso. The respondent mills, a registered dealer under the Bihar · Sales Tax Act, 1947 (Act III of 1947), was carrying on business of manufacture and sale of gunny bags, hessian and other jute products at Katihar. During the period April l, 1950, to March 31, 1951, it sold and despatched its wares worth about Rs. 92,24,386-1-6 to dealers outside the State and realised a sum of Rs. 2,rr,222-9-6 as sales-tax from them. In assessing the , sales-tax payable by the said respondent for-the relevant period the Superintendent of Sales Tax, Purnea, held that the said amount of sales-tax had been realised in contravention of s. r4A of the Act read with r. 19 of the Bihar Sales Tax Rules, and directed its forfeiture under the proviso to that section. The' respondent_ challenged the validity of the said order under Arts. 226 an'Cl 227 of the Constitution. The High Court held that the proviso to s. 14A of the Act was u.ltra 'vires the State Legislature as it violated Arts. 20(1) and 31(2) of the Constitution and set aside the order of forfeiture and quashed the proceedings under s. r4A of the Act. The State of Bihar appealed to this · Court. It was urged by way of preliminary objection on behalf of the respondent that since the proviso to s. l4A of the Act had no application to the facts of the case, there was no occasion to decide its const\tutional validity. The contention of the appel- lant was that the proviso did apply to the respondent inasmuch I959 Feroz Din and Others v. The State of West Bengal Sarkar ]. z95(/' November z6 ... • 332 SUPREME COURT REPQRTS [1960(2)) 1959 as he had contravened the conditions and restrictions imposed by the proviso tor. 19. The question for determination, therefore, The State of Biharwas whether the said respondent could·be said to have realised v. any amount by way of tax in respect of such part of its turn-over Rni Ba.hadur as was allowed to be deducted from his gross turn-over for the llurdut Roy determination of his taxable turn-over under the Act or the rules, Moti Lall as contemplated by the later part of the said pro\'iso. Jute Milts Held, that the preliminary objection must prevail. Held, further, that before the penalty of forfeiture could be imposed upon a dealer under the proviso to s. 14A of the Bihar Sales tax Act, 1947, it had to be shown that he had acted con- trary to the conditions and restrictions prescribed by the Rules and it was not enough to show that the collection of the sales tax made by him \Vas otherwise il~egal or improper. The contraYen- tion of the statutory provisions contained in s. r4A or of the Rules prescribing conditions and restrictions in that behalf alone could form the basis of the imposition of the penalty of forfeiture prescribed by the said proviso. With the insertion of s. 33 into the Act with retrospective operation, prohibiting the imposition of the tax on sales taking place outside the State and in view of the decision of this Court in State of Bombay v. The United Motors (India) Ltd. [1953] S.C.R. ro69, the proviso to r. 19 must be construed on the basis that the sales in question were outside the scope of the Act and no tax could be imposed on them. It could not, therefore, be said that that part of the respondent's tum-over which was in question was an allowable deduction within the meaning of the said proviso. Such allowable deductions as are contemplated by the proviso are clearly based on the provisions of ss. 6, 7 and 8 of the Act as is quite clear from the Explanation to s. 5 of the Act. State
Excerpt shown. Read the full judgment & AI analysis in Lexace.