Gujarat High Court
Giriraj Sales Corporation vs State Of Gujarat And Ors. on 18 December, 1998
Equivalent citations: [2002]125STC369(GUJ)
Author: A.R. Dave
Bench: A.R. Dave
JUDGMENT
1. In all these 46 petitions, common question has been raised about the constitutional validity of proviso (b) to Section 30AA of the Gujarat Sales Tax Act, 1969 principally on the ground that according to the petitioners, subjecting a dealer who has purchased goods from a dealer while he was registered but whose certificate of registration is cancelled later on under Section 30AA with a retrospective date, falling prior to the date of such purchases, to the burden of tax, penalty and interest payable in respect thereof and subjecting him further to pains of proving the discharge of actual tax liability by the vendor, whose certificate of registration has been cancelled amounts to shifting of not only the tax burden of a dishonest dealer to the honest dealer in respect of a honest transaction, but also penalties and interest in respect of turnover which was not liable to tax when purchases were made. If such is the effect of a retrospective legislation, it would be unreasonable violating Article 14 which is all pervasive and operates against every act of arbitrariness.
2. In response to this challenge, the State Government has taken the following stand as has been submitted by the learned Additional Advocate-General in writing :
"1. It is submitted that Under Sub-section (1) of Section 30AA, the Commissioner can cancel the certificate of registration of a registered dealer if he is satisfied that the registered dealer has without entering into a transaction of sale, issued to and accepted by another registered dealer a bill or cash memorandum with the intention to defraud the Government revenue or with the intention that the Government may be defrauded. Such a cancellation can be done either prospectively or retrospectively from such date as the Commissioner may, having regard to the circumstances of the case fix.
2. The scheme of Section 30AA is that only those dealers referred to in Sub-section (1) who give or accept bills without entering into transactions of sale or purchase shall bear the consequences flowing from cancellation of registration regarding payment of tax and other provisions like interest and penalty, subject to proviso (b) of Section 30AA.
3. Provisions of provisos (a) and (b) of Section 30AA would not affect further resales of goods purchased from such purchaser.
4. If the certificate is cancelled prospectively the provisions of Section 15 would operate and provisos (a) and (b) of Section 30AA would not be operative.
5. Irrespective of the fact whether the registration certificate of the vendor or purchaser is cancelled retrospectively, the genuineness of the transactions has to be verified at the time of assessment/ reassessment. If transactions are found genuine, they will not be affected by Section 30AA and provisos thereto."
3. In view of the clear stand taken by the State Government that if transactions are found to be genuine they will not be affected by Section 30AA and provisos thereto, the issue really does not survive between the parties at this stage.
4. In view of the aforesaid, learned counsel for the petitioners do not press for the petitions, at this stage.
Petitioners are accordingly dismissed.
Rule discharged.
There shall be no order as to coats.