Plurality of transactions no condition to be classified as Casual Trader under Rajasthan Sales Tax Act

Plurality of transactions no condition to be classified as Casual Trader under Rajasthan Sales Tax Act – Supreme Court. Grammatical construction may be departed from to avoid anomaly – Supreme Court

ABCAUS Case Law Citation
ABCAUS 3444 (2021) (01) SC

Important case law relied referred:
Tirath Singh vs. Bachittar Singh AIR 1955 SC 830
Govinda Bala Patil v. Ganpati Ramchandra Naikwade, (2013) 5 SCC 644

Plurality of transactions no condition to be classified as Casual Trader under Rajasthan Sales Tax Act

In the instant case, Commercial Taxes Officer had filed a SLP against the judgment of the High Court.

The Respondent had purchased a truck/trailer (vehicle). Almost   three years after the date of purchase of the said vehicle, summons were issued to the assessee under the Rajasthan Tax on Entry of Motor Vehicle into Local Areas Act 1988 (Entry Tax Act).

The respondent failed to appear pursuant to the summons, whereupon an Assessment Order was passed by the Assistant   Commissioner Commercial Taxes levying tax on the purchase value under Entry Tax Act along with penalty and interest.

The Appellate Authority allowed the appeal of the assessee and set aside the Assessment Order holding that the Respondent was a “Casual Trader” and, therefore, the limitation for passing an Assessment Order against him was only 2 years from the date of the transaction.

The appeal of the Department was rejected by the Rajasthan Tax Board. The revision petition against the said order was dismissed by the Hon’ble High Court also.

The Hon’ble Supreme Court observed that under the Rajasthan Sales Tax Act, 1994 “Casual Trader” means a person who has, whether as principal, agent or in any capacity, occasional transaction of business nature involving the buying, selling, supply   or distribution of such goods as may be specified by the State Government by notification in the official gazette whether for cash, or for deferred payment, or for commission, remuneration or other valuable consideration.

The Hon’ble Supreme Court also noted that In the case of a “Casual Trader”, the time limit for assessment is one year from the date of making the report, and if no report is made, within two years from the date of the transaction.

In the Special Leave Petition, the main contention of the Petitioner Department was that a single transaction of purchase of a motor vehicle does not bring a person within the definition of “Casual Trader”. “Casual Trader” envisages occasional transactions of   business involving buying and selling of goods.

In other words, it was contended that the plurality of transactions is   a condition precedent for treating a trader as a “Casual Trader”.  It was contended that there was only a single transaction in the instant case, therefore, the respondent could not be held a “Casual Trader”.

The Hon’ble Supreme Court observed that lower authorities/Courts concurred in arriving at the finding that the assessment of the respondent was barred by limitation as the assessee was a “Casual Trader”. A perusal of the definition of “Casual Trader” makes it amply clear that a person with occasional transactions of buying/selling are to be treated as casual traders.

It was held that the Legislature could not, possibly, have intended that a person making 2 or 3 transactions should be treated as a “Casual Trader”, but a person making only one transaction should be treated at par with regular traders.

In construing a statutory provision, words in singular are to include the plural & vice versa

The Apex Court opined that it is well settled that in construing a statutory provision, words in the singular are to include the plural and vice versa, unless repugnant to the context in which the expression has been used, as provided in of the General Clauses   Act, 1897 and provisions identical thereto in State enactments pertaining to General Clauses.

Court must interpret a statute in a manner which is just, reasonable and sensible

The Hon’ble Supreme Court stated that if the grammatical construction leads to some absurdity or some repugnancy or inconsistency with the legislative intent, as may be deduced by reading the provisions of the statute as a whole, the grammatical construction may be departed from to   avoid anomaly, absurdity or inconsistency.

The Hon’ble Supreme Court pointed that it was held that where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.

Accordingly, the SLP was dismissed as devoid of merit.

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