Commercial Taxes Officer versus Mirbahadur

CR (ST) 186/07 -CTO, Nimbahera Vs. Shri Mirbahadur Judgment dt.5.1.09

CR (ST) 186/07 -CTO, Nimbahera Vs. Shri Mirbahadur Judgment dt.5.1.09

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR.
JUDGMENT
CTO, Nimbahera Vs. Shri Mirbahadur


S.B. CIVIL ENTRY-TAX REVISION NO.186/2007
Date of Order : 5th January, 2009
PRESENT
HON'BLE DR. JUSTICE VINEET KOTHARI

Mr. V.K. Mathur with Mr. Rishab Sancheti for the petitioner.
Mr. Sanjeev Johari for the respondents.

REPORTABLE
BY THE COURT:


1. This revision petition filed by the Revenue is directed
against the order of the Tax Board dated 12th October, 2006 whereby
the Tax Board rejected the revenue's appeal, upholding the order of
the Dy. Commissioner (Appeals) in favour of the respondent assessee
that the respondent assessee was not liable to pay the entry tax on the
purchase and import of motor vehicles viz. chassis of a truck under
the provisions of Rajasthan Tax on Entry of Motor Vehicles into
Local Areas Act, 1988 (hereinafter referred to as 'Act of 1988).
2. The Tax Board held that the respondent assessee was a
'casual trader' and, therefore, the limitation for passing assessment
order against him was only 2 years as prescribed under Section 30(5)
of the Rajastan Sales Tax Act, 1994, the provisions of which were
mutatis mutandis applied to the said Act of 1988.

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3. Learned counsel for the Revenue urged that there was no
basis or justification with the Tax Board to hold the respondent
assessee as 'casual trader' though he did not fall within the definition
of 'casual trader' as defined in Section 2(9) of the RST Act, 1994 as
the transaction of purchase of motor vehicle in question was for
personal use and not in the nature of business which was sine qua non
for holding the respondent assessee to be a 'casual trader'. He further
submitted that the question of applying the limitation of 2 years for
passing assessment order could not, therefore, apply to the present
facts of the case and since admittedly prescribed form No.ET-1
prescribed under Rule 4 of the 1992 Rules was not furnished by the
respondent assessee, therefore, the respondent assessee also failed to
establish before the authorities below that the said motor vehicle was
purchased by him for personal use. He, therefore, submits that the
imposition of entry tax along with the interest and penalty on the
respondent assessee was justified and the appellate authorities erred
in setting aside the same.
4. Learned counsel for the respondent assessee submits that
though form No.ET-1 was not furnished by the respondent assessee
but since assessee was a 'casual trader' therefore, the limitation of 2
years applied in the present case and the Tax Board was justified in
holding the assessment by the learned CTO to be barred by limitation.

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5. I have heard learned counsels and perused the impugned
orders.
6. The definition of the “casual trader” as given in Section 2
(9) of the 1954 Act is reproduced herein below for ready reference:“
2(9) “Casual trader” means means a person
who has, whether as principal agent or in any
other capacity, occasional transactions of a
business nature involving buying, selling,
supplying or distributing of such goods as may
be specified by the State Government by issuing
a notification, whether for cash or deferred
payment, or for commission or remuneration or
other valuable consideration;”

7. Section 31 deals with the assessment in the case of
casual traders also provides that if a casual trader is registered under
the Act, he shall be assessed like any other registered dealer,
however, if he is not registered under the Act then an obligation is
cast upon such casual trader to make a report of the transaction in
question to the concerned assessing authority having jurisdiction and
upon such report, the assessment has to be made by the concerned
assessing authority. In such circumstances only, the period of
limitation of 2 years prescribed under sub-section (5) applies
otherwise Section 30 of the Act providing for escaped assessment

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which provides for a limitation of 5 years deals with the escaped
assessment which includes the case of a dealer required to be
registered, but not registered besides assessment of escaped turnover.

8. After hearing learned counsels, this Court is of the
opinion that there was no basis available with the Tax Board to treat
the respondent assessee as a 'casual trader' of the motor vehicle in
question. It was a single transaction of purchase of motor vehicle not
in the nature of business at all. The very definition of 'casual trader'
envisages 'occasional transactions of a business nature' involving
buying and selling of the goods. Therefore, the plurality of the
transactions is a must for treating anybody as a casual trader.
Admittedly in the present case, it was a single transaction and,
therefore, no question of treating the respondent assessee a 'casual
trader' could arise. Therefore, the question of applying the limitation
under Section 31(5) of the Act which deals with the assessment in
case of 'casual trader' does not arise. Since the respondent assessee
admittedly did not furnish the form No.ET-1 required to establish the
case of personal user by the respondent assessee, therefore, the
question of any exemption from levy of entry tax also could not arise
in the present case. The learned assessing authority was, therefore,
justified in framing the assessment in question on 5.6.2002 after
giving a notice in this regard dated 13.2.2002 to the respondent
assessee. The said assessment order produced as Annex.1 in the said

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revision petition clearly stipulates that the respondent assessee had
neither got issued the form No.ET-1 nor furnished any such form to
the Assessing Authority. This Court is at loss to understand how the
Tax Board could treat the respondent assessee as a 'casual trader' just
for askance without any evidence being there in this regard and hold
the assessment to be time barred. The impugned order of Tax Board,
therefore, cannot be sustained.

9. As far as rate of tax is concerned, it appears that since
the assessee did not appear before the assessing authority, he applied
the rate applicable on the date of passing of the assessment order on
5.6.2002 whereas the date of purchase of the vehicle in question was
16th September, 1999 which as per the notification dated 26.3.1999
(serial No.1216) was under entry 76 only 4% applicable to all type of
motor vehicles. Therefore, to this extent, the assessment order should
stand modified.
10. Accordingly, this revision petition is allowed and setting
aside the order of the learned Dy. Commissioner (Appeals) as well as
Tax Board, the assessment order is restored subject to rate of tax
being corrected from 12% to 4% as per notification dated 26.3.1999.
The learned CTO will be at liberty to pass fresh order accordingly
within a period of 3 months from today. The respondent assessee
shall appear before the assessing authority in the first instance in this
regard on 10th February, 2009 and thereafter the learned assessing
authority may pass fresh orders in accordance with law s to levy of

CR (ST) 186/07 -CTO, Nimbahera Vs. Shri Mirbahadur Judgment dt.5.1.09 CR (ST) 186/07 -CTO, Nimbahera Vs. Shri Mirbahadur Judgment dt.5.1.09

entry tax @ 4% interest and penalty thereon. No order as to costs.

[ DR. VINEET KOTHARI ], J.

item No.41
babulal/