# KARAM CHAND THAPAR & BROS. (COAL SALES) LIMITED v. STATE OF UTTAR PRADESH AND ANOTHER - **Citation:** [1977] 1 S.C.R. 25 - **Court:** Supreme Court of India - **Decided:** 1976-07-21 - **Case number:** Civil Appeals Nos. 928 and 929 of 1975 - **Bench:** A. C. Gupta, Jaswant Singh - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/karam-chand-thapar-bros-coal-sales-limited-v-state-of-uttar-pradesh-and-another-6912 - **Pages:** 24 ## Headnote Central Sales Tax Act (74. of 1956), s. 9(1), proviso-Scope of. 25 U.P. Sales Tax Act .• 1948, S. 22-0rder of rectification passed within 3 years tJf original order, but served beyond 3 years-If barred by limitation. ' Under s. 3 (b), Central Sales Tax Act, 19 56, a sale or purchase of goods A B is deemed to take place in the course of inter-State trade or commer~e if the sale or purchase is effected by a transfer of documents of title to the goods C -during their movement from one State to another. Section 7(3) provides that on the application of the dealer the prescribed authority shall register the applicant and grant him a registration certificate which shall specify the -class or classes of goods for the purpose of s. 8 ( 1); and the Form prescribed by r. 3, Central Sales Tax (Registration and Turnover) Rules, 1957, for application for registration, requires the purposes for which the goods were purchased .by the dealer to be specified, re-sale beiug one· such purpose. Section 8 ( 1) (b) provides that every dealer who, in the course of inter-State trade or commerce D selJs, to a registered dealer other than the Government; goods of the description referred to in sub-s. (3) shall be liable to pay 3% of his turnover ~s tax under the Act; whereas, under s. 8(2), the tax payable with respect to goods which do not fall within sub-s. (I) shall be, in t:lm case of declared goods, at the rate applicable to the sale or purchase of such goods inside the appropriate State and in the case of other goods 10%, or the rate applicable in the State, whichever is higher. Prior to April 1, 1963, s. 8 (3) stated, that the goods referred to in s. 8 (1 )(b), " (a) in the case of declared goods, are goods of the class or classes specified in the certificate of the registered dealer purchasing E the goods as being intended for re-sale by him; and (b) in the case of goods other than declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him." By the Amendment Act (8 of 1963), cl. (a) was omitted and the opening words in cl. (b), "in the case of goods other than declared goods" were also omitted; so that, after April 1, 1963, the goods referred to in s. 8(1)(b) are specified in sub-s. (3) as goods of the class or classes specified in the certificate of registration of the registered dealer purchasiug F the goods as being intended for re-sale by him. Section 8(4)(a) says that the provisions of s. 8 ( 1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration in the prescribed. Form, duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed ·particulars. Section 9(1) contains a general rule that the tax payable by any dealer on sales effected in the course of inter-State trade or commerce would be levied by the Government of Ind_ili and collected in the State from which the movement of the goods commenced. The proviso to the G sub-section qualifies this rule in the case of a subsequent sale which is not exempted from tax under s. 6(2), and states, that the tax on such subsequent sale would be levied and collected in the State from which the registered dealer effecting thel subsequent siale obtained, or could have obtained, the Form prescribed for the purpose of s. 8(4)(a). Coal is one of the declared goods having been declared under s. 14 to be of special importance in inter-State trade or commerce. The appellant was a Company carrying on business as coal agents and was H Tegistered in U.P. under the U.P. Sales Tax Act, 1948, and the Central Sales Tax Act. The appellant arranged for the supply of. coal from collieries in W. Bengal and Bihar to consumers in U.P. The collieries sent the coal by 4-1003 SCT/76 A B c D E F G H 26 SUPREME COURT REPORTS [1977] 1 S.C. ## Text _Characters 0–39,715 of 69,971. This is a partial read: ask again with offset=39715 for what follows._ KARAM CHAND THAPAR & BROS. (COAL SALES) LIMITED v. STATE OF UTTAR PRADESH AND ANOTHER July 21, 1976 [A. C. GUPTA AND JASWANT SINGH, JJ.] Central Sales Tax Act (74. of 1956), s. 9(1), proviso-Scope of. 25 U.P. Sales Tax Act .• 1948, S. 22-0rder of rectification passed within 3 years tJf original order, but served beyond 3 years-If barred by limitation. ' Under s. 3 (b), Central Sales Tax Act, 19 56, a sale or purchase of goods A B is deemed to take place in the course of inter-State trade or commer~e if the sale or purchase is effected by a transfer of documents of title to the goods C -during their movement from one State to another. Section 7(3) provides that on the application of the dealer the prescribed authority shall register the applicant and grant him a registration certificate which shall specify the -class or classes of goods for the purpose of s. 8 ( 1); and the Form prescribed by r. 3, Central Sales Tax (Registration and Turnover) Rules, 1957, for application for registration, requires the purposes for which the goods were purchased .by the dealer to be specified, re-sale beiug one· such purpose. Section 8 ( 1) (b) provides that every dealer who, in the course of inter-State trade or commerce D selJs, to a registered dealer other than the Government; goods of the description referred to in sub-s. (3) shall be liable to pay 3% of his turnover ~s tax under the Act; whereas, under s. 8(2), the tax payable with respect to goods which do not fall within sub-s. (I) shall be, in t:lm case of declared goods, at the rate applicable to the sale or purchase of such goods inside the appropriate State and in the case of other goods 10%, or the rate applicable in the State, whichever is higher. Prior to April 1, 1963, s. 8 (3) stated, that the goods referred to in s. 8 (1 )(b), " (a) in the case of declared goods, are goods of the class or classes specified in the certificate of the registered dealer purchasing E the goods as being intended for re-sale by him; and (b) in the case of goods other than declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him." By the Amendment Act (8 of 1963), cl. (a) was omitted and the opening words in cl. (b), "in the case of goods other than declared goods" were also omitted; so that, after April 1, 1963, the goods referred to in s. 8(1)(b) are specified in sub-s. (3) as goods of the class or classes specified in the certificate of registration of the registered dealer purchasiug F the goods as being intended for re-sale by him. Section 8(4)(a) says that the provisions of s. 8 ( 1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration in the prescribed. Form, duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed ·particulars. Section 9(1) contains a general rule that the tax payable by any dealer on sales effected in the course of inter-State trade or commerce would be levied by the Government of Ind_ili and collected in the State from which the movement of the goods commenced. The proviso to the G sub-section qualifies this rule in the case of a subsequent sale which is not exempted from tax under s. 6(2), and states, that the tax on such subsequent sale would be levied and collected in the State from which the registered dealer effecting thel subsequent siale obtained, or could have obtained, the Form prescribed for the purpose of s. 8(4)(a). Coal is one of the declared goods having been declared under s. 14 to be of special importance in inter-State trade or commerce. The appellant was a Company carrying on business as coal agents and was H Tegistered in U.P. under the U.P. Sales Tax Act, 1948, and the Central Sales Tax Act. The appellant arranged for the supply of. coal from collieries in W. Bengal and Bihar to consumers in U.P. The collieries sent the coal by 4-1003 SCT/76 A B c D E F G H 26 SUPREME COURT REPORTS [1977] 1 S.C.R. rail, the railway receipts either in the name of the appellant or in the name of the consumer in U .P., and sent the bills and invoices to the appellant's head office in Calcutta. The appellant forwarded the railway receipts 1:0 the consumers in cases where the receipts were in the names of the consumers, and in cases where the receipts were in the appellant's name also endorsed them in favour of the consumers. There was thus, in the latter cases, a subse:quent sale of goods in the course of inter-State trade or commerce by the transfer of documents of title by the appellant to the consumers in U.P. For tb.e assessment year 1966-67 the appellant claimed that the turnover in cases where the railway receipts had been subsequently endorsed in favour of the consumers in U .P. was noUaxable in U.P. · Tue Sales-tax Officer by order dated March 27, 1971, accepted the contention, relying on a decision of the High Court. But, in subsequent decisions, the High Court held that in cases where a regisetred dealer effected a second sale. in the course of inter Stare trade and commerce, sales tax on the turnover was to be realised in the State whern the dea}er effecting the sale was registered; and in one of the decisions it was observed that the decision on which the Sales-tax Officer relied had overlooked the proviso to s. 9 (1) of the Central Act. The Sales-tax Officer accordingly proposed to rectify the error committed by him and after following the procedu:re prescribed for rectification of errors apparent on the face· of the record in >. 22 of the U.P. Act, passed an order on March 26, 1974, rectifyifli.g the mistake and served it on the appellant on March 31, 1974. The appellant challenged the order unsuccessfully in the High Court. In appeal to this Court it was contended : (1) That the declaration prescribed under s. 8 ( 4 )(a) is necessary when s. 8 (1 )' was applicable, but that, after the omission in s. 8 ( 3), reference to 'declared goods' is omitted in that section, so that when s. 8 ( 1 )(b) refers to the sale of goods mentioned in s. 8 (3) the reference is only to good!: other than declared goods and hence, when a dealer ~ells declared goods, he could not have obtained the prescribed declaration and so the proviso to s. 9( l) did not apply; (2) Section 22 of the U.P. Act was not applicable as there wa1. no mistake apparent on the face of the record; and (3) The order under s. 22 was barred by limitation, because it was effective only when it was served on the appellant. Dismissing the appeal to this Court, HELD: (1) The 1971-a~essment order was wrong. [46 GJ The Act and the rules and the prescribed Forms make no distinction between declared goods and other goods, except for the purpose of the rate of tax. Under s. 7 (3) the registration certificate granted to a dealer has to specify the class or classes of goods for the purposes of s. 8(1) and ii. makes no distinction between declared goods and other goods. Sub-sections 8 fl) and (3) als0 show that all sales to a registered dealer other than the Government, whether of declared goods or other goods, are covered by s. 8(1). Clause (a) was omitted from s. 8(3) presumably because it was considered unnecessary to retain it when cl. (b) apparently covered all goods both declared and other than declared. The declaration referred to ins. 8(4)(a) iS necessary for the dealer to avail himself of the benefit of the rate of tax mentiQnecl in s. 8 (1). There is no valid reason why the appellant could not have obtained the declaration in the prescribed Form as required by the .proviso to s. 9(1). Since no claim for exemption under s. 6(2) is made by the appellant, the first. order of assessment was contrary to the proviso of s. 9(1) and the sales in question were taxable within the respondent-State, where the appellant was registered as a dealer. [45 D-Hl (2) The 197~-ord~r of assess~ent was patently erroneo'!s in that it ff\iled to take into cons1derallon the proviso to s. 9 ( l). Therefore, 1t could be rectified under s. 22, U.P. Act. [46 G] . r{" 't KARAM CHAND V. U,P, 27 (3) The order rectifying the mistake was recorded within 3 years of the date of the original order as required qy s. 22 of the U.P. Act. The fact that the order was communicated, to the appellant on March 31, 197 4 could not make any difference. The order of r.ectification is deemed to be made on the date of communication only for the purpose of counting the period of limitation for filing the appeal, under s. 9 of the U.P. Act. Therefore, in the instant case, the appellant was not affected by the order under s. 22 being communicated to it after the expiry ,of 3 years from the date of the original order. [ 47 B; 48 BJ Raja Barish Chandra Raj Singh v. The Deputy Land Acquisition Office~ [1962] 3 S.C.R. 676 and Madan Lal v. State of U.P. [1975] 3 S.C.C. 779 explained & distinguished. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 928 and 929 of 1975. (From the Judgment and.Order dated 8-10-1974 of the Allahabad High Court in Civil Writ Nos. 2169 and 2276 of 1974). F. S. Nariman, D. N. Misra and 0. C. Mathur, for the appellant. S. C. Manchanda and 0. P. Rana, for the respondents. ARGUMENTS APPELLANTS I. Civil Appeal No. 928 of 1975.-In this Appeal three questions arise for determination : . . ( i) Whether in the facts and circumstances of the case the proviso to s. 9 ( 1) of the Central Sales Tax Act, 1956 was applicable so as to enable the State of Uttar Pradesh to levy and collect Central Sales Tax in respect of the subsequent sales of coal effected by the Appellants to consumers in the State of U.P.? (ii) Whether the Sales Tax Officer, Moradabad had no jurisdiction to rectify the assessment for the year 1966-67 as there was no error apparent on the face of the record of the original assessment (s. 22 of the U.P. Sales Tax Act, 1948)? (iii) Whether the order of rectification passed under s. 22 of the U.P. Sales Tax Act on 26th March, 1974 (for the assessment year 1966-67) and communicated to the Appellants on 31st March, 1974 was barred by limitation as it could not be said to be "within three years from the date of'' the original assessment order dated the 27th March, 1971 ? I~. Re: W~ether in the facts and circumstances of the case the prov1s<:.._ to Sectzon 9(1) of the Central Sales Tax Act, 1956 was applicable so as to enable the State of Uttar Pradesh to levy and collect 'Central A B c D E F G H 28 SUPREME COURT REPORTS [ 1977] 1 S.C.R. A· Sales Tax il.z respt!Ct of the subsequent sales of coal effected by the Appellants to consumers in the State of U.I'. ? B c D E F G H (a) The proviso to s. 9(1) of the Central Sales Tax Act, 1956 . does not apply either :-- (i) to subsequent sales (in the course of inter-Slate trade or commerce) of declared goods-i.e. goods declared in s. 14 to be of special importance in inter-State trade or commerce; or (ii) to sale of goods to persons other than registered dealers; (b) The argum1Cnt in support of lhc submission that the proviso to s. 9 (I ) does not apply to declared goods 1s as follows :- Section 8(1) and 8(2) of the Central Sales Tax Act, 1956 deals separately with two types of goods, name! y, ( i) goods of the description referred to in sub-section (3) [see s. 8(1) (b) and (ii)] declared goods [see s. 8(2) (a)]. The rates of tax for the two types of goods have been and are differently prescribed in sub-s. (1) and sub-s. (2) of s. 8-especially since the Amending Act VIII of 1963. The expression "goods of the description referred to in sub-section ( 3)" in s. 8 (1) originally included declared goods intended for re-sale [see s. 8(3) (a)] as originally enacted in the Central Sales Tax Act, 1956 (reproduced in Chaturvedi's Central Sales Tax Act, 4th Edition, p. 548). Subsection ( 3) of s. 8 then read as follows : "(3) The goods referred to in sub-section (l)- ( a) in the case of declared goods, are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him; and (b) in any other case, are goods of the class or classes specified in the certificate o~ registration of the registered dealer purchasing the goods as being intended for re-sale by him or for use by him in the manufacture of goods for sale or for use by him in the execution of a11y contract; and in either case include the containers or other materials used for the packing of goods of the class or classes of goods so specified." By the Amending Act VIII of 1963 (which raised the rate of tax under s. 8(1) to 2 per cent), clause (a) of s. 8 ( 3) stood deieted. The effect of this deletion was .'{ t t. ~ 't + KARAM CHAND V. U.P. 29 that since 1963 declared goods fell outside the purview of A s. 8 ( 3). Sectio1i 8 ( 4) only applies to sales of goods of the description referred to in sub-s. ( 3) , since the provisions of that sub-section have express reference to the provisions of s. 8 (1). For the proviso to s. 9 ( 1) being applicable it is necessary that the registered dealer effecting the subsequent sale obtained or could have obtained the form prescribed in s . .8(4) (a)-i.e. Form 'C' prescribed under rr. B 12 and 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957 (see pages 25 and 27 of Chaturv.edi's Central Sales Tax Act, Fourth Edition). In the present case, the appellants neither obtained nor could have obtained Form 'C' from their purchaser since s. 8(4) [read withs. 8(1) and (3)] did not (a[ter 1963) apply to declared goods. h is submitted that to accept the arguments urged on behalf of the Respondents that s. 8( 4) (a) [read with s. 8 ( 1) and ( 3)] dealt with declared goods as well, would be to give no meaning to the provisions contained in s. 8(2). Besides, as held by Their Lordships in State of Tamil Nadu v. Sitalakshmi Mills & Others C [1974] 4 S.C.C. 408 at 412 para 6), s. 8 deals with three different classes of cases-declared goods do not fall within the class mentioned in s. 8 (1). The argument that the charging s. 6 does not make any differentiation between declared and undeclared goods is of no avail. Section 6(1) itself commences with the words "Subject to the other provisions contained in this Act ..... . . . . . ". If the effect of any other provision is to take away liability to pay sales tax, effect would have to be given to that other provision notwithstanding the charging section [see State of Mysore v. L. Setty 16 S.T.C. 231, 239 (S.C.)]. Declared goods are clearly intended by the framers of Central Tax Act, 1956 to receive preferential treatment not only in respect of local sales tax on local sales (see s. 15), but also Central Sales Tax in sales effected during the course of inter-State trade or commerce [sees. 8(2)] . . (c) Even assuming that s. 8(4)(a) [read with s. 8(1) and (3)] include within its purview "declared goods", the proviso to s. 9 (I) is still inapplicable for the following reason :- For the proviso to s. 9 ( 1) to be applicable and for the State of. U.P. to have jurisdiction to levy and collect the Central Sales Tax on subsequent sales, it is necessary that the registered dealer effecting the subsequent sales (by endorsement of documents of title like Railway Receipt during the course of the movement of the goods from one State to another) either "obtained or as the case may be c D E F G 11 30 A B c D SUPREME COURT REPORTS [1977] 1 S.C.R. could have obtained" the Form prescribed in s. 8 ( 4 )(a) in connection with the purchase of such goods involved in the subsequent sale. Such a form could only be obtained under s. 8(4)(a) from the appellants' purchasers if the appellants' sales were to be •"a registered dealer" [see s. 8(1)(b)]. Admittedly in the present case the appellants though registered dealer for the relevant year in question did not sell coal to any registered deafor [see the averments in para 11 of the Writ Petition, page 62 Vol. 2 which have 1wt been denied in the Affidavit in Reply (para 8 page 109 Vol. 2]. Therefore, even assuming that the provisions of s. 8 ( 4) (a) [read with s. 8 (1) and ( 3) ] were applicable to declared goods (even after the Amending Act VIII of 1963), the sales resulting in the turnover of Rs. 5,59,172.38 not being to registered dealers, the provisions of s. 8 (1) (b) were not attracted. Consequently the form prescribed under s. 8(4)(a)-Form 'C'-could not have been obtained by the appellants' purchaser from the prescribed authority. Consequently the appellants could not obtain from their purchaser such form under s. 2(4)(a). Accordingly the last part of the proviso to s. 9 (1) not being satisfied, the State ot U.P. had not jurisdiction to levy and collect Central Sales Tax from the Appellants. · E III. Re : Whether the Sales Tax Officer, Moradabad had no jurisdiction to rectify the assessment for the year 1966-67 as there was no error apparent on the face of the record of the original assessment (Section 22 of the U.P. Sales Tax Act, 1948) ? F G It has been stated in the order of rectification dated the 26th March, 1974 passed under s. 22 of the U.P. Sales Tax Act, 1948 that (page 96, Vol. 2) : .:r :, "In the present case of the assessee this error is apparent because if this fact that it was registered under the Central Sales Tax Act had been placed before the Hon'ble Allahabad High Court in the case of Karam Chand Thapar & Bros. (Coal Sales) Ltd., Moradabad for the year 1965-66 the decision would have been against them as have been happened in the abovementioned two cases.) The error apparent on the face of the record, which is a condition precedent to invoking the rectification provision (s. 22) is that the appellants were treated as unregistered dealers by the High Court in the decision for the earlier assessment year 1965-66 (the judgment of the H High Court has been extracted at pages 71-78 of Vol. 2. But in s. 22 the error has to be an "error apparent on the face of the record" of the assessment-i.e. for the assessment year 1966-67. This assess~ ment order is dated 27th March, 1971 and a copy of it is at pages ·( r KARAM CHAND V. U.P. 31 79-83 of Vol. 2. In that order it is specifically mentioned (page 79 A viz).: "10. Whether registered or not : Yes". Thus it was known to the Sales Tax Officer passing the original assessment order that the appellants were in fact registered dealers. An error apparent on the face of the record .must be an error which is "glaring and obvious" [se,e 34 I.T.R. 143, 150 (S.C.) ]. Besides, there is a distinction between a mere erroneous de~ision and a decision which could be characterised as vitiated by "error apparent". A rectification is by no means an appeal in disguise whereby an erroneous decision is re-heard and corrected. It lies only for patent error (see Thungabhudra Industries Ltd. v. Government of Andhra Pradesh [1964] 5 S.C.R. 174, 186) where the expression "error apparent on the face' of the record" in 0.47, r-1, C.P.C. was interpreted by the Supreme Court). In that case was also said that an error apparent on the face of the record was one where "without any elaborate argument one could point to the error" (page 186). This is also the view expressed in a Sales Tax Case-Master Construction Co. 17 S.T.C. 360, 365-366 (Subba Rao, J.). In the present case, it is submitted that the view of the Sales Tax Officer, Moradabad who passed the original assessment order dated 27th March, 1971 following the decision of the Allahabad High Court dated the 24th July, 1970 in Civil Miscellaneous Writ No. 4356 of 1969 (pages 71 to 78) was not patently erroneous. As a matter o[ fact the correctness of the subsequent decisions of the Allahabad High Court is being doubted in the present Appeal and there is no pronouncement of your Lordships on the question viz., interpretation of the proviso to s. 9 (1). Besides, it cannot be said that at the time when the original assessment order was passed there was a manifest error. Moreover, even as a result of the subsequent decisions of the Allahabad High Court it cannot be said that what was not an error on 27th March, 1971 became an error on 26th March 1974 (the date of the rectification order under s. 22). In any event, even assuming that there was fill error, that error is not apparent on the face of the record of the original assessment-it is a matter in which the arguments, to say the least, are evenly balanced and a decision of the Highest Court is now awaited. In the circumstances there was no jurisdiction in the Sales Tax Officer, Moradabad to rectify and set aside vhe original order of assessment. IV. Re: Whether the order of rectification passfd under Seetion 22 of the U.P. Sales Tax Act on 26th March, 1974 (for the assessment year 1966-67) and communicated to the Appellants on 31st March, 1974 was barred by limitation as it could not be said to be "within three years from the date. of" the original assessment order dated the 27th March, 1971 ? It is submitted that the period of limitation under s. 22 of the U.P. Sales Tax Act, 1948, runs from the date on which the order of rectification is communicated to the assessee-which would enable the B c D E F G H A B c D E F G H 32 SUPREME COURT REPORTS (1977] 1 S.C.R. assessee to file an appeal under s. 9 of the U.P. Sales Tax Act, 1948. The period of limitation for filing an appeal is 30 days from the date of service of the copy of the order appealed against. It is submittd that an order of rectification is not complete as against the assessee unless it is duly "communicated to him. The order of rectification affects the rights and liability of an assessee and it is essentially fair and just that it should be communicated to the party as stated by Your Lordships in a case under the Land Acquisition Act where the phrase "date of the Collector's award" was being considered. Your Lordships observed : " .... If the award is treated as an administrative decision taken by the Collector in the matter of the valuation of the property sought to be acquired it is clear that the said decision ultimately affects the rights of the owner of the property and in that sense, like all decisions which affect persons, it is essentially fair and just that the said decision should be communicated to the said party. The knowledge of the party affected by such a decision, either actual or constructive, is an essential element which must be satisfied before the decision can be brought into force. Thus considered the making of the award cannot consist merely in the physical act of writing the award or signing it or even filing it in the office of the Collector; it must involve the communication of the said award to the party concerned either actually or constructively. If the award is pronounced in the presence of the party whose rights are affected by it it can be said to be made when pronounced. If the date for the pronouncement of the award is communicated to the party and it is accordingly pronounced on the date previously announced the award is said to be communicated to the said party even if the said party is not actually present on the date of its pronouncement. Similarly if without notice of the date of its pronouncement an award is pronounced and a party is not present the award can be said to be made when it is communicated to the party later. The knowledge of the party affected by the award, either actual or constrnctive, being an essentia~ requirement of fair-play and natural justice the expression 'the date of award' used in the proviso must mean the date when the award is either communicated to the party or is known by him either actually or constructively. In our opinion, therefore, it would be unreasonable to construe the words from the date of the Collector's award used in the proviso to s. 18 in a literal or mechanical way." ·-,~-:r-r (A.l.R. 1961 S.C. 1500, 1503-(1962] 1 S.C.R. 676, 683684). It is submitted that on an analogy of reasoning the words "the date of any order passed by him" ins. 22( 1) of the U.P. Sales Tax Act, 1948 must be construed to mean the effective date of an order of rectification viz. the date when it is communicated. In the instan~ case the order was communicated after three years from the date of the assessment order and, therefore, the order of rectification is vitiated as being barred by time. KARAM CHAND V. U.P. 33 V. Jn Civil Appeal No. 929 of 1975 the only question that arises is A Whether in the facts and circumstances of the case the proviso to s. 9(1) of the Central Sales Tax Act, 1956, was applicable so as to enable the State of Uttar Pradesh to levy and collect central sales tax in respect of the subsequent sales of coal efjected by the appellants to consumers in the State of U.P.? The assessment year in question is 1969-70 and the Appellant adopts the arguments urged in Civil Appeal No. 928 of 1975. With regard to whether the sales by the appellants (in 1969-1970) during the course of the movement of the goods from State to State were ta registered dealers or to consumers, there is no indication in the record as to whether the sales effected to registered dealers or to consumers or unregistered dealers. In the event of Your Lordships holding that declared goods are not covered by the proviso to s. 9 ( 1) this would make no difference because it is admitted that the subsequent sales effected by the appellants were of declared goods namely coal. But in the event of Your Lordships· coming to the conclusion that the proviso to s. 9(1) may include also subsequent sales of declared goods, then the submission urged is (as in Civil Appeal No. 928 of 1975) that in any view of the matter it is only subsequent sales to registered dealers which would attract jurisdiction of the State authorities under the proviso to s. 9(1) and not subsequent sales by -the appellants to unregistered dealers or consumers. The fact would be easy of ascertainment by the Sales Tax Officer and it is submitted that in that event a direction ought to be given that the State of U.P. could levy and collect central sales tax under proviso to s. 9 ( 1) in respect of subsequent sales of coal effected by the appellants only to registered dealers--and not to unregistered dealers or consumers. RESPONDENTS : A. Contention No. 1. This is the! main contention and is a short one. It is as to which State has jurisdiction to tax subsequent sales made by a registered dealer. In the instant case, admittedly the appellant is a dealer registered in U.P. both under the Central and the U .P. Act. Therefore, the short questioll' which arises for consideration is as to whether in the instant case the State of U.P. would have the jurisdiction to tax such subsequent sales effected by the enforcement of documents to parties 'in U.P.? Thete is a specific provision in the Act, which is proviso to s. 9 (1), to cover cases such as the present case. Section 9 ( 1) reads : "The tax payable by any dealer under this Act on sales of goods effected by him in the course of interstate trade or commerce, whether such sales fall within clause (a) or clause (b) of s. 3, shall be levied by the Government of India and the tax so levied shall be collected by that government in accordance with the provisions of sub-section (2) in the State from which the movement of goods commence : Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax B c D E F G H A B c D E F G H 34 SUPREME COURT REPORTS [1977] 1 S.C.R. shall, where such sale does not fall within sub-section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or! as the case may be, could have obtained, the form prescribed for the purposes of clause (a) of sub-section ( 4) of section 8 in connection with the purchase of such goods." Sub-s. (2) of s. 9 merely provides that the appropriate State on behalf of the Government of India shall assess, re-assess, collect and enforce payment of tax under the Act as if the tax under the Act was a tax payable under the general sales tax law of the State. Therefore, it is that the tax to be collected under the Act is by the appropriate State for and on behalf of the Government of India. In the case of al first sales, the substantive provisions of s. 9(1) are clear and unequivocal. Section 9(1) selects out of several States one particular State and empowers it to levy' and collect C.S.T. That State alone ha~ the power to levy the tax and all other States by implication are debarred. This was a simple device adopted in order to fix the forum and jurisdiction of the particular State to make the assessment in respect of first sales. A simple test was evolved to avoid multiplicity of imposition of tax by more than one State in respect of the same goods and that was to link the tax with the commencement of the physical movement of the goods on their journey from one State to another. This was simple to COJ:l1"prehend -and execute. Therefore, the appropriate State was the one from where the movement of goods started on their interstate journey. That problem does not concern us here as the States of Bihar and Bengal from where the movement of coal commenced have duly assessed the tax u/s 9(1) of the Act. The question, however, is which is the State which can tax the subsequent sale in the instant case. For this purpose the proviso had to be enacted as admittedly CST is multipoint in nature and there is no provision for a single point tax. . The only exemption is to be found in s. 6(2) which is the charging section and if the transaction does not satisfy all the three conditions of s. 6(2), viz., (a) the purchaser is a registered dealer, (b) who by a certificate of registration is authorised to purchase his goods, and ( c) the selling dealer furnishes to his assessing authority :- (i) a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in a prescribed form obtained from the prescribed authority; and (ii) a declaration in C Form duly filled and signed by the registered dealer to whom the goods were sold. (see Chaturvedi's 3rd edition, page 383). No attempt has been made by the appellant-assessee in the instant case even to allege, what to say of proof, tha~ the afo~esaid three con~itioI?s were satisfied. Therefore, s. 6(2) which provides for exempt10n m respect of subselJUent sales, albeit of declared or undeclared goods, will have no application. The position therefore would be that the KARAM CHAND V. U.P. 35 subsequent sales in the instant case would not be exempt u/s 6(2). Therefore, the subsequent sales have to be taxed and the only question is which State would have jurisdiction to assess the subsequent sales. It was fairly conceded that the subsequent sales - would be assessable u/ s 9 ( 1) , except sales of declared goods. The argument was built up merely on the omission of cl. (a) from s. 8 (3) Qf the Act with effect from 1-4-1963. Prior to that date section 8(3) ran as follows : "The goods referred to in clause (b) of sub-section (1)- ( a) in the case of declared goods or goods of the class or classes specified in the certificate or registration of the registered dealer purchasing the goods as being intended for resale by him .. " The above was omitted by s. 2(iii) (a) of the C.S.T. Amendment Act (No. 8 of 1963) with effect from 1st April, 1963. From this omission it was assumed that it was no longer necessary for declared goods to be specified in the declaration prescribed under rule 12 and the Form C. This assumption is wholly unwarranted and is contrary to the provisions of the Amending Act (No. 8 of 1963), The omission of cl. (a) and certain words in cl. (b) of s. 8(3) was necessitated as the legislature probably wanted to do away with the distinction between declared goods and undeclared goods for purposes of s. 8(3). Hence it deleted clause (a) in its entirety and the words "in the case of goods other than declareclgoods" from cl. (b) of s. 8(3). Thus with effect from 1-4-63 so far as mentioning of goods in the certificate of registration of purchasing dealer for purpose of re-sale etc. are concerned they made only one category and specified the same rate of tax as was applicable u/s 8 ( 1) both for declared and undeclared goods, provided Form C was duly submitted. The above interpretation also finds support from Chaturvedi's Central Sales Tax Law, 3rd edition, 1973 at page 325, paras 7 and 8, which read as :- "Clause (a) of s. 8(3) was omitted by s. 2(iii) (a) of the Amendment Act, 1963 with effect from 1-4-63. Before that the rate of tax for sales covered in sub-section ( 1) was 1 p.c. and all the sales or purchases of declared goods under the said Act could be subjected to tax at the rate upto 2 % by virtue to s. 15 of the principal Act. "Sales covered under sub.-s. ( 1} could enjoy a concessional rate of 1 p.c. instead of th