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PETITIONER: THE STATE OF BIHAR

       Vs.

RESPONDENT: RAT  BAHADUR HURDUT ROY-MOTT LALL JUTE MILLS & ANOTHER  (and

DATE OF JUDGMENT: 26/11/1959

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K. GUPTA, K.C. DAS SHAH, J.C.

CITATION:  1960 AIR  378            1960 SCR  (2) 331  CITATOR INFO :  C          1984 SC1194  (28)

ACT: Sales   Tax-Amount  realised  by  registered   dealer   from sales outside the State-Forfeiture of such  amount-Validity- Allowable  deduction, meaning of-Bihar Sales Tax  Act,  1947 (XIX  of  1947),  Ss. 5, 6, 7, 8, 14A  Proviso,  33,  r.  19 Proviso,

HEADNOTE: The  respondent mills, a registered dealer under  the  Bihar Sales  Tax  Act,  1947 (Act 111 of 1947),  was  carrying  on business of manufacture and sale of gunny bags, hessian  and other jute products at Katihar.  During the period April  1, 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. 2,11,222-9-6 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. 14A 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 and 227 of the Constitution.  The High Court  held that  the proviso to S. 14A of the Act was ultra  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. 14A 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. 14A of the Act had no application to  the facts  of  the  case, there was no occasion  to  decide  its constitutional  validity.  The contention of  the  appellint was that the proviso did apply to the respondent inasmuch 332  as  he  had  contravened the  conditions  and  restrictions imposed  by   the  proviso  to  r.  19.   The  question  for determination,  therefore,  was whether the said  respondent

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could  be said to have realised any amount by way of tax  in respect  of such part of its turn-over as was allowed to  be deducted  from his gross turn-over for the determination  of his  taxable  turn-over  under  the Act  or  the  rules,  as contemplated by the later part of the said proviso. 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 contrary 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  was  otherwise illegal  or  improper.  The contravention of  the  statutory provisions  contained in s. 14A 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 Bombaay v.  The  United  Motors (India)  Ltd. [1953] S.C.R. 1069, 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  turnover  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 of Bombay & Another v. The United Motors (India)  Ltd. JUDGMENT: An  allowable deduction under the said proviso was  not  the same  thing as exclusion of a part of the turn-over  on  the basis  of  s.  33(1)(a)(1)  of the Act.   It  stands  on  an entirely different footing.  Transactions which fall  within the said section are in substance outside the Act and no tax can  be  imposed on them.  The transaction in  question  did not,  therefore,  fall within the proviso to  r.19  and  the proviso  to  S.  14A  was not attracted  and  the  order  of forfeiture passed against the respondent was unjustified and illegal.

& CIVIL APPELLATE JURISDICTION: Civil Appeal No.678 of 1957. Appeal  from the judgment and order dated August 1,  1956-of the  Patna  High Court, in Misc.  Judicial Case No.  188  of 1955.                             WITH Civil Appeals Nos. 546 of 1958 and 115 of 1959.                             333 Appeals from the judgment and order dated March 8, 1957,  of the Patna High Court, in Misc.  Judicial Cases Nos. 116  and 215 of 1956. Lal Narayan Sinha and S. P. Varma, for the appellant. C.   K.  Daphtary,  Solicitor-General  of India  and  R.  C. Prasad, for respondent No. 1 in C. A. No. 678 of 57. B.   C.. Ghose and P. K. Chatterjee, for the intervener. H.   N. Sanyal, Additional Solicitor-General of India and C. P. Lal, for respondent No. 1 in C.A. No. 546 of 58. H.   N. Sanyal, Additional Solicitor-General of India and P. K. Chatterjee, for respondent No. 1 in C.A. No. 115 of 1959.

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1959.  November 26.  The Judgment of the Court was delivered by GAJENDRAGADKAR  J.-This  is a group of three  appeals  which have  been  filed  in  this Court  by  the  State  of  Bihar (hereinafter  called the appellant) against  three  separate registered  dealers with a certificate issued by  the  Patna High  Court  Under Art. 132(1) of of the  Constitution  that they  involve  a  substantial  question of  law  as  to  the interpretation of Art. 20(1) of the Constitution.  The facts in  each  one of the three appeals are similar,  though  not exactly  the same, but they raise a common question  of  law under the proviso to s. 14A of the Bihar Sales Tax Act, 1947 (Act  XIX of 1947) (hereinafter called the-Act).  Orders  of forfeiture  have  been passed against the  three  registered dealers in the three appeals respectively, and they raise  a common question of law in regard to the validity of the said orders.   By consent Civil Appeal No. 678 of 1957, has  been argued  before  us as the principal appeal and it  has  been conceded  that our decision in that appeal will  govern  the two other appeals.  We would,, therefore, set out the  facts in Civil Appeal No, 678 of 1957 and deal with the merits  of the points raised for our decision in that appeal. Rai   Bahadur  Hurdut  Roy  Motilal  Jute   Mills,   Katihar (hereinafter called the first respondent) was at the, 43 334 material time registered as a dealer under the Act and   was carrying oil business of manufacture and sale of gunny bags, Hessian  and other jute products at Katihar in the  district of Purnea.  During the period April  1, 1950, to  March  31, 195  1,  the said respondent sold  and despatched  its  ware worth about Rs. 92,24,386     to  dealers outside the  State of  Bihar and realised a  sum of Rs. 2,11,222-9-6  as  sales tax from such dealers.  The said respondent’s assessment  to sales  tax  for  the relevant period was  taken  up  by  the Superintendent of Sales Tax, Purnea (hereinafter called  the second  respondent) on May 31, 1953; and in  consequence  of these  proceedings the impugned order of forfeiture came  to be passed. Meanwhile  Art.  286 of the Constitution  along  with  other articles was considered by this Court in the State of Bombay &  Anr. v. The United Motors (India) Ltd. & Ors.  (1).   The question  which this Court bad to consider in that case  was about  the  vires of the impugned provisions of  the  Bombay Sales Tax Act, 1952 (Act XXIV of 1952), and for the decision of  the  said  question  Art. 286  fell  to  be  Considered. According  to  the  majority  judgment  in  that  case  Art. 286(1)(a) read with the explanation thereto and construed in the light of Art. 301 and Art. 304 prohibits the taxation of sales  or  purchases involving inter-State elements  by  all States except the State in which the goods are delivered for the  purpose  of consumption therein.  The latter  State  is left free to tax such sales or purchases and it derives this power  not by virtue of the explanation to Art.  286(1)  but under  Art. 243(3) read with Entry 54 of List 11.  The  view that the explanation does not deprive the State in which the property  in the goods passed of its taxing power  and  that consequently  both the State in which the property  in  -the goods passes and the State in which the goods are  delivered for consumption have the power to tax is not correct. When  the first respondent’s assessment was taken up by  the second respondent his attention was invited to this  Court’s decision  in the case of the United Motors (1); he  followed the said decision and held that (1)  [1953] S.C.R. 1069.

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                           335 the turn over of Rs. 92,24,386-1-6 on account of despatch of manufactured   jute  products  to  out-of-Stat  buyers   was exempted  from the levy of tax; this meant, a  deduction  of the  said  amount from the amount of Rai Bahadur  the  total turnover  shown  by  the  first  respondent  in  the  return submitted by him according to the provisions of the Act. Subsequently  the second respondent proceeded    against the first  respondent  under  s. 14A of the Act"  and  issued  a notice in that behalf on June 18, 1954.  By this notice  the first  respondent  was  called upon to show  cause  why  the entire  amount of Rs. 2,11,222-9-6 which had been  recovered by him as sales tax from the dealers should not be forfeited to  Government.  The first respondent showed cause  but  the second  respondent  was not satisfied with  the  explanation given by the first respondent, and so he directed the  first respondent  to deposit the said amount into  the  Government treasury and produce the proof of payment before him  within a month of the receipt of his order.  This order was  passed on  February 10, 1955.  It shows that the second  respondent thought that the matter raised for his decision was  simple; the first respondent had collected the amount in question as tax  under the Act from his customers for and on  behalf  of the appellant, and so he could not retain the said amount  ; it  must  go to the State coffers.  He also  held  that  the first respondent had represented to the, purchasers that the amount was chargeable as sales tax under the Act and as such the  first respondent had clearly contravened  the  explicit provisions of s. 14A of the Act read with r. 19 of the Bihar Sales  Tax Rules (hereinafter called the Rules).  It  is  on these  findings  that  the  second  respondent  passed   the impugned order of forfeiture. The  first respondent then applied to the Patna High  Court, tinder Arts. 226 and 227 of the Constitution challenging the validity of the said order.  It was urged on his behalf that the  proviso  to s. 14A under which the impugned  order  was purported  to have been passed did not apply to the case  of the  first  respondent,  and  as  such  the  order  was  Dot justified 336 by  the said proviso.  It was also contended that if  it  is held  that the said proviso justified the impugned order  it was  ultra  vires  the  State  Legislature  inasmuch  as  it violates Art. 20(1) and Art. 31(2) of the Constitution.  The High  Court  did not consider the  first  contention  raised before it; it dealt with the two constitutional points urged by the first respondent   and found in his favour on both of them. On   these  findings  the  petition  filed  by   the   first respondent was allowed, the impugned order of forfeiture was set  aside  and  the proceedings  taken  against  the  first respondent  under s. 14A were quashed.  The  appellant  then applied  for and obtained a certificate from the  said  High Court under Art. 132(1) of the Constitution. On  behalf  of  the  appellant  Mr.  Lal  Narain  Sinha  has contended  that the High Court was in error in holding  that the  proviso  to s. 14A violates either Art. 20(1)  or  Art. 31(2) of the Constitution.  He has addressed us at length in support  of  his case that neither of the  two  articles  is violated  by  the impuged proviso.  On the other  hand,  the learned SolicitorGeneral has sought to support the  findings of the High Court on the said two constitutional points; and he has pressed before us as a preliminary point his argument that  on  a fair and reasonable  construction,  the  proviso cannot  be applied to the case of the first respondent.   We

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would,  therefore, first deal with this  preliminary  point. In  cases  where  the  vires  of  statutory  provisions  are challenged  on constitutional grounds, it is essential  that the material facts should first be clarified and ascertained with  a  view to determine whether  the  impugned  statutory provisions  are attracted; if they are,  the  constitutional challenge  to their validity must be examined  and  decided. If, however, the facts admitted or proved do not attract the impugned provisions there is no occasion to decide the issue about the vires of the said provisions.  Any decision on the said  question  would  in such a case  be  purely  academic. Courts are and should be reluctant to decide  constitutional points merely as matters of academic importance.                             337 Before considering the preliminary point raised by the first respondent  it is necessary to refer briefly    the relevant scheme  of the Act.  The Act was originally passed  in  1947 because  the  Legislature thought it necessary  to  make  an addition  to the revenue of Bihar, and for that  purpose  to impose a tax on the sale of goods in Bihar.  The  provisions of  the Act as well as the statutory Rules framed  under  it have  been subsequently modified from time to time.  In  our present discussions we would refer to the provisions and the Rules  which  were in operation at the material  time.   The goods  the sale of which is taxed under the Act are  defined by  s. 2(d) as meaning all kinds of moveable property  other than  those specifically excepted.  Section 2(g)  defines  " sale  "  inter alia as meaning any transfer of  property  in goods  for  cash  or other  considerations  and  the  second proviso  to  it prescribes that the sale  of  any  goods-(1) which  are  actually in Bihar at the time when,  in  respect thereof the contract of sale as defined in s. 4 of that  Act is made, or (2) which are produced or manufactured in  Bihar by the producer or manufacturer thereof,-shall wherever  the delivery  or  contract of sale is made, be  deemed  for  the purposes of this Act to have taken place in Bihar.  The  tax leviable Linder the Act is defined by s. 2(hh) as  including a fee fixed in lieu of the tax under ’the’ first proviso  to s. 5, whereas under s. 2(i) " turnover " means the aggregate of  the amounts of sale prices received and receivable by  a dealer in respect of sale or supply of goods or carrying out of  any contract, effected or made during the given  period, or,  where  the  amount of turnover  is  determined  in  the prescribed manner, the amount so determined. Section 4 which is  the  charging section provides that every  dealer  whose gross  turnover during the specified period on  sales  which have  taken  place  both in and outside  Bihar  exceeds  Rs. 10,000 shall be liable to pay tax on sales which have  taken place in Bihar oil and from the date of the commencement  of the Act.  This section shows that the incidence of  taxation can be attracted only where the gross turnover of the dealer exceeds Rs. 10,000 and in 338 determining this prescribed minimum. sales which take  place both  in Bihar and outside are taken into account.   Section 5, prescribes the rate of tax at six pies in a rupee on  the taxable turnover.  The provisos    to  this  section  confer specific powers on the State       Government;   the   first proviso which is relevant for our purpose empowers the State Government  by notification to fix a higher rate of tax  not exceeding  one anna in a rupee or any lower rate of  tax  in respect of sale of any goods or class of goods specified  in such  notification  subject  to such conditions  as  it  may impose.  The explanation to this section indicates what  the taxable  turnover for the purpose of the section  means.   "

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Taxable turnover " according to this explanation means  that part of a dealer’s gross turnover on sales which have  taken place  in  Bihar  during  any  period  which  remains  after deducting therefrom the items specified in cls. (a) and  (b) of  the explanation.  The sale of any goods         declared from  time  to time as tax-free goods under s. 6 is  one  of those  items.   Section 6 empowers the State  Government  to exempt sale of any goods or class of goods from the levy  of tax  under this Act subject to the conditions  specified  in the section, whereas s. 7 empowers the Government to  exempt dealers  from  tax, and s. 8 authorises  the  Government  to prescribe  points at which goods may be taxed  or  exempted. Section 9 deals with the question of registration of dealers and  provides that no dealer who is liable to pay tax  under s.  4 shall carry on business unless he has been  registered under  the  Act and possesses  a  registration  certificate. Under  s. 11 a list of registered dealers is published,  and by  s.  12 such registered dealers are required  to  furnish such returns by such dates and to such authorities as may be prescribed.    Section  13  prescribes  the  procedure   for assessment,  and s. 14 requires that the tax  payable  under the Act shall be paid in the manner hereinafter provided  at such intervals as may be prescribed.  Section 14(2) requires the registered dealer to pay into a Government treasury  the full  amount  of tax due from him according to  the  returns which he has to file and has to                             339 furnish  along  with  the said return  a  receipt  from  the treasury showing the payment of such amount. Having  thus  provided for the recovery of the  tax  charged under s. 4, s. 14A in effect authorises   registered dealers to  reimburse  their dues by making collections of  the  tax payable  by  them in accordance with  the  restrictions  and conditions as may be prescribed.  It provides that no dealer who  is not a registered dealer shall realise any amount  by way  of tax on sale of goods from purchasers nor  shall  any registered  dealer  make  any collection of  tax  except  in accordance  with such restrictions and conditions as may  be prescribed.   That  takes us to the proviso to s.  14A  with which  we are directly concerned in the present appeal.   It reads thus: " Provided that if any dealer collects any amount by way  of tax,  in contravention of the provision of this  section  or the  conditions and restrictions prescribed thereunder,  the amount   so  collected  shall,  without  prejudice  to   any punishment to which the dealer may be liable for an  offence under  this  Act, be forfeited to the State  Government  and such  dealer  shall  pay such  amount  into  the  Government treasury in accordance with a direction issued to him by the Commissioner  or  any officer appointed under section  3  to assist him and in default of such payment, the amount  shall be recovered as an arrear of land revenue." The effect of this proviso is clear.  A dealer is authorised to collect amounts by way of tax from the purchasers only in accordance  with the provision of s. 14A and the  conditions and restrictions prescribed thereunder.  The conditions  and restrictions  referred to in the proviso are to be found  in the  material  Rules framed under the Act.  If it  is  shown that  a  dealer  has collected an amount by way  of  tax  in violation  of the conditions and restrictions prescribed  by the  Rules he incurs the penalty of forfeiture as  specified in  the  proviso.   There can be no doubt  that  before  the penalty  of forfeiture can be imposed upon the dealer  under the  proviso it must be shown that he has acted contrary  to the conditions and restrictions prescribed

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340 by  the  Rules.   It would not be enough to  show  that  the collection  of  the  amounts in question by  the  dealer  is otherwise  illegal  or improper.  The contravention  of  the statutory  provision  contained in s. 14A or  of  the  Rules prescribing conditions and restrictions in that behalf alone can  form the basis of the imposition of the  penalty  under the proviso.  This position is not disputed before us. The appellant contends that the proviso is attracted to  the present  case because the first respondent  has  contravened the conditions and restrictions imposed by the proviso to r. 19,  whereas  the  first respondent  argues  that  a  proper construction  of  this latter proviso does not  justify  the appellant’s plea.  It would thus- be seen that the  decision of  the  preliminary point raised by  the  first  respondent involves  the  narrow question of the  construction  of  the proviso to r. 19. Before construing the said proviso it is, however, necessary to  refer to s. 33 of the Act.  This section was enacted  on April  4,1951, but it has been expressly made  retrospective as  from January 26, 1950.  Therefore at the  material  time this  section  must  be deemed to have  been  in  operation. Section33(1)(a)(i)provides  that  notwithstanding   anything contained in the Act a tax on the sale or purchase of  goods shall  not  be imposed under the Act where such  a  sale  or purchase  takes place outside the State of  Bihar.   Section 33(2)  makes the explanation to cl. (1) of Art. 286  of  the Constitution applicable for the interpretation of subcl. (i) of  cl. (a) of sub-s. (1).  It is common ground that if  the relevant  provision just cited is construed in the light  of the decision of this Court in the case of the United  Motors (1)  there  can  be no doubt that the sales  which  are  the subject-matter   of  the  present  proceedings  consist   of transactions on which a tax cannot be imposed under the Act. That is why the appellant strongly relies on this  provision and  contends  that in construing the proviso to r.  19  the true  legal  position  in respect  of  the  transactions  in question must be borne in mind. Let  us  now  read the proviso to r.  19.   Rule  19  itself prescribes the procedure which has to be followed by (1)  [1953] S.C.R. 1069.                             341 a registered dealer in realising any amount by way of tax on sale of goods from purchasers.  This procedure refers to the issue  of  a cash memo or a bill as prescribed by  it.   The proviso  to  this  Rule lays down that  no  such  registered dealer  shall  realise any amount by way of tax  at  a  rate higher than the rate, at which he is liable to pay tax under the  Act, or realise any amount by way of tax in respect  of such part of his turnover as is allowed to be deducted  from his  gross  turnover for the determination  of  his  taxable turnover under the Act or these Rules.  The appellant relies on  the latter part of the proviso and argues that the  part of the turnover of the first respondent which is in question fell within s. 33(1)(a)(1) and as such was not liable to  be taxed.   That  being so there was no justification  for  the first  respondent to collect any amount by way of  tax  from his  purchasers  under s. 14A.  The scheme of S. 14A  is  to permit the registered dealer to collect such amounts of  tax from  his purchasers as he in his turn is liable to  pay  to the appellant.  Authority to collect such tax amounts  given to the registered dealer inevitably postulates his liability to  pay  a similar amount to the appellant.   Therefore  the conduct of the first respondent in collecting amounts by way of  tax  from his purchasers amounts to a breach of  s.  14A

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itself. It  is also contended that having regard to the  -provisions of s. 33(1)(a)(i) the first respondent was entitled to claim a  deduction of the transations in question from  his  gross turnover  under  the latter part of the  proviso,  and  that clearly means the first part of the said proviso applies  to his  case  and  it prohibited him from  realising  the  said amounts.  His conduct in collecting the amounts,  therefore, constitutes  a  breach of the conditions  specified  in  the proviso to r. 19. In appreciating the validity of these arguments it would  be relevant  to  remember that at the material time  there  was considerable confusion in the minds of the public as well as the State authorities about the true scope and effect of the provisions  of Art. 286(1) of the Constitution.  It  is  not disputed  that during the material period and in  the  years preceding it registered 44 342 dealers  used  to pay tax in respect of  transactions  which were really not liable to be taxed under     s.  33(1)(a)(i) and such tax was being received by the  appellant.  In fact, as  we have already pointed out  s. 14 of the Act imposes  a liability on the registered dealer to furnish along with his return a receipt for the payment of the tax which is payable under  the  return.  Such payments were made  by  registered dealers   in  respect  of  similar  transactions  and   were accepted.  It is an accident that the assessment proceedings of the first respondent were actually taken up for  decision by the second respondent after the decision of this Court in the  case of the United Motors (1).  If the  question  about the  first respondent’s liability to pay the tax  under  the Act  had been decided before the date of the  said  decision there  is no doubt that he would have been required  to  pay the  tax  for the transactions in question.   Indeed  it  is common ground that the notification issued for the  material period levied a tax at three pies on the goods in question " if the sales tax authority is satisfied that the goods  have been despatched by or on behalf of the dealer to any  person outside  the  Province  of  Bihar."  This  notification   is consistent  with the definition of the word " sale "  as  it then stood.  It is thus clear that at the material time  the appellant  thought that transactions like those in  question in the present appeal were liable to pay the tax at the rate of  three pies as prescribed by the  relevant  notification; the  registered dealers also had no doubt on the point;  and so  taxes were collected in respect of such transactions  by the  appellant  from  the  registered  dealers  and  by  the registered dealers in their turn from their purchasers. Nevertheless, after the enactment of s. 33 the legal fiction about  the retrospective operation of the said section  must be given effect to and in construing the proviso to r. 19 it must  be  assumed  that the transactions  in  question  were outside  the  scope of the Act and no tax  could  have  been imposed in respect of them.  Construing the proviso on  this assumption,  can it be said that in respect of the  part  of the first respondent’s (1)  [1953] S.C.R. 1069.                             343 turnover  which  is in question a  deduction  was  allowable within  the  meaning of the proviso?  In  our  opinion  this question  cannot  be answered in favour  of  the  appellant. Rule  19 itself was framed in 1949 and has not been  amended subsequent to the enactment of s. 33.  As it was framed  its reference  to the allowable deductions was clearly based  on

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the provisions of ss. 6, 7 and 8 of the Act.  This  position would  be  clear beyond all doubt if we  read  the  material words in the proviso in the light of the explanation to s. 5 of the Act.  The explanation in terms enumerates  deductions which have to be made in determining the taxable turnover of the  ’registered dealer and it is to these deductions  which are  allowable  under the three sections  specified  in  the explanation to which the latter part of the proviso to r. 19 refers.   A claim for the exclusion of a part of  the  first respondent’s  turnover  on the strength  of  s.  33(1)(a)(i) cannot,  therefore,  be said to be  an  allowable  deduction under the proviso. This question can be considered from another point of  view. The  provisions which allow deductions to be made  or  grant exemptions  in  respect of  certain  transactions  obviously postulate  that  but for them the transactions  in  question would  be  liable to. tax under the Act; and  so  when  such transactions  are  included  in the  return  the  registered dealer is allowed to claim appropriate deductions in respect of them.  But, the position with regard to s. 33 is entirely different ; transactions which attract the provisions of the said  section are in substance outside the scope of the  Act and  no tax can be imposed on them at all.  If that  be  the true position the claim which can be made by the  registered dealer  in  respect of such transactions cannot  in  law  be regarded  as a claim for allowable deductions or  exemptions properly so-called; it is really a claim that the Act itself does not apply to the said transactions.  Therefore, in  our opinion  it  would be straining the language of  the  second part  of the proviso to r. 19 to hold that the  transactions in question fell within its purview. There is one more point to be considered in this connection. Form VI which has been prescribed for 344 making  the returns under s. 12 requires the gross  turnover to be mentioned at the outset, and then it   provides    for the different deductions allowable under     the Act.   This form  was prescribed in 1949 and has not been amended  after the addition of s. 33 to the  Act.  On looking at this  form it seems difficult to    entertain  the  argument  that  the claim  for  the  total  exclusion  of  the  transactions  in question can be made under any of the headings prescribed in the  form.  The appellant, however, contends that the  first item of gross turnover means the whole of the gross turnover which  must include all sale transactions whether they  took place  within  Bihar or outside it, and in support  of  this argument reliance is placed on the definition of "  turnover " contained in s. 2(1).  If the whole of the gross  turnover has to be mentioned under item 1, it is urged, the claim for the  exclusion of the transactions in question can  well  be adjusted  under  one  or the other of  the  deduction  items prescribed in the form.  We are not inclined to accept  this argument.   The form as it has been prescribed construed  in the  light of the material provisions contained in ss. 6,  7 and  8  does not support the case that  in  prescribing  its several items it was intended that the transactions  failing under  s.  33 should be first shown under item  1  and  then excluded  under one or the other of the remaining  items  of deduction.  Besides it may be relevant to point out that the heading  of Chapter VII which deals with the  submission  of returns by dealers is " return of taxable turnover " and  it is arguable that the gross turnover mentioned in Form VI may mean  "gross taxable turnover " and not the  gross  turnover including  the transactions which are outside the  scope  of the Act.

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Then  as to the argument about the contravention of  s.  14A itself it is difficult to appreciate how any provision of s. 14A  can  be  said to have  been  contravened.  Section  14A consists  of two parts both of which are put in  a  negative form.  The second part with which we are concerned in effect means  nothing more than this, that a registered dealer  can make  collections of such tax only as is payable by  him  in accordance with the restrictions and conditions as may be                             345 prescribed.   If the argument is that the  first  respondent was  not liable to pay any tax and as such was not  entitled to  make any corresponding collection, then  the  collection made  by  him  may  fall outside s.  14A  and  be  otherwise unjustified  or  improper;  but it does not  amount  to  the contravention  of any provision of s. 14A as such.  In  fact s.  14A  itself refers to the  restrictions  and  conditions which may be prescribed and, as we have already seen,  these conditions  and restrictions are prescribed by the Rules  in general  and by r. 19 in particular.  So the argument  urged under s. 14A takes us back to the question as to whether the proviso to r. 19 has been contravened.  In dealing with this question  we  cannot  ignore  the  fact  that  the  relevant provisions which fall to be construed in the present  appeal impose  a serious penalty on the registered dealer, and  so, even  if  the  view for which  the  appellant  contends  may perhaps  be a possible view, we see no reason why the  other view  for  which  the first respondent  contends  and  which appears to us to be more reasonable should not be  accepted. In  the result we hold that the proviso to s. 14A cannot  be invoked  against  the first respondent and so the  order  of forfeiture  passed against him by the second  respondent  is unjustified and illegal. In view of this conclusion it is unnecessary to consider the objections  raised  by  the  first  respondent  against  the validity  of the proviso on the ground that  it  contravenes Arts.   20(1)  and  31(2)  of  the  Constitution.   We   may incidentally  add  that during the course of  the  arguments before us we have also heard all the learned counsel on  the question  as  to whether the said  proviso  contravenes  the provisions of Art. 19(1)(f) as well. The result is the appeal fails and is dismissed with costs. The  decision of this appeal governs Civil Appeals Nos.  546 of  1958 and 115 of 1959.  They also fail and are  dismissed with costs. Appeal dismissed.                             346