JUDGMENT
C.S.P. Singh, J.
1. The point involved in this appeal is short. The assessee manufactures
camphor, distilled turpentine oil, camphor oil, etc. It is registered as a
dealer under the U.P. Sales Tax Act and under the Central Sales Tax Act. It
sought the opinion of the Commissioner of Sales Tax regarding the rate of tax
payable by it on these sales under the Central Sales Tax Act. The Commissioner
of Sales Tax has taken the view that only questions arising under the U.P.
Sales Tax Act can be referred and answered under Section 35. Thus, the only
question in this appeal is as to whether an assessee can ask for the opinion
of the Commissioner as regards the appropriate rate of tax imposable under the
Central Sales Tax Act. The answer to this question depends on the
interpretation to be put on Section 9(2) of the Central Sales Tax Act. Section 9(2) of the Central Act runs as under:
9. (2) Subject to
the other provisions of this Act and the Rules made thereunder, the
authorities for the time being empowered to assess, reassess, collect and
enforce payment of any tax under the general sales tax law of the appropriate
State shall, on behalf of the Government of India, assess, reassess, collect
and enforce payment of tax, including any penalty, payable by a dealer under
this Act as if the tax or penalty payable by such a dealer under this Act is a
tax or penalty payable under the general sales tax law of the State; and for
this purpose they may exercise all or any of the powers they have under the
general sales tax law of the State; and the provisions of such law, including
provisions relating to returns, provisional assessment, advance payment of
tax, registration of the transferee of any business, imposition of the tax
liability of a person carrying on business on the transferee of, or successor
to, such business, transfer of liability of any firm or Hindu undivided family
to pay tax in the event of the dissolution of such firm or partition of such
family, recovery of tax from third parties, appeals, reviews, revisions,
references, refunds, rebates, penalties, charging or payment of interest,
compounding of offences, and treatment of documents furnished by a dealer as
confidential, shall apply accordingly:
Provided that if in any State or
part thereof there is no general sales tax law in force, the Central
Government may, by rules made in this behalf, make necessary provision for all
or any of the matters specified in this sub-section.
2. It
will be seen that the wordings of Section 9(2) are very wide. The intention of
the Parliament was to make the machinery provided under the State Act
available for making assessments under the Central Sales Tax Act. Counsel for
the assessee contended that the application moved by the assessee under
Section 35 is in the nature of a reference to the Commissioner in which his
opinion is solicited in respect of matters set out under Section 35(2) of the
Act.
3. Sri V. D. Singh, appearing on behalf of the department,
however, contended that the reference referred to in Section 9(2) refers to a
reference made under Section 11 of the U.P. Act.
4. Section 9(2) does
not in so many words describe what type of reference is contemplated by the
Sub-section. A reference specifically provided for under the State Act would
obviously fall within the ambit of this provision. But, in view of the
consideration that the Parliament intended that the entire assessment
proceedings should be conducted in accordance with the State laws, it will not
be appropriate to take a restricted view of the word “reference” as occurring
in Section 9(2) in case the proceedings under Section 35 have the essential
characteristic of a reference. Proceedings under Section 35 start with an
application by the assessee. The Commissioner of Sales Tax expresses his
opinion on the point referred. The decision does not affect the validity of
any order passed earlier by the assessing authority or the appellate or
revising authority It thus only declares the law. In a reference under the
U.P. Act, the High Court expresses an advisory opinion, and declares the law
on the point. Effect to the opinion is given by the revising authority later
on. Thus, both in a proceeding under Section 35, and in a proceeding under
Section 11 of the Act, the law on the point is declared, effect to which is
given later on. It is undoubtedly true that in a reference answered by the
High Court, the law declared operates also for that assessment year, but if
the law declared is of a general nature, then it becomes binding on the sales
tax authorities for the other years also. Thus, in substance, a proceeding
under Section 35 is really a provision in the nature of a reference made by
the assessee to the Commissioner for his opinion on the questions envisaged by
Section 35(2) of the Act. This being so, the Commissioner of Sales Tax was
competent to decide the application on merits, and he erred in refusing to
entertain it on the ground that the question related to liability under the
Central Sales Tax Act.
5. The appeal is accordingly allowed with cost
to the assessee, which is assessed at Rs. 200.