Law: Sales Tax Act, 1990

Section: 2(40),3,11(2),23,23(2),25,26,33,34

Law: Sales Tax Rules, 2006

Section: 6

(a) Sales Tax Act (VII of 1990)--- ----Ss. 26, 23, 2(40), 3 & 25---Sales Tax Rules, 2006, R. 6---Tax invoice---Scope of sales tax---Compulsory registration---Non-filing of sales tax return by unregistered person---Audit of unregistered person---Effect---Department, during scrutiny of income tax returns of taxpayer, observed certain discrepancies and issued a show cause notice to the taxpayer confronting sales tax liability along with default surcharge and penalty---Validity---Taxpayer was registered as a manufacturer with the department in the year 1993 and it was deregistered by the department in the year 2004 as its supplies and utility bills were below the basic threshold---Taxpayer was a non-registered person, therefore, it was not required to observe the provisions of Sales Tax Act, 1990---Term 'tax invoice' had been defined in S 2(40) of the Sales Tax Act, 1990, which stated that 'tax invoice' meant a document required to be issued under S. 23 and sales tax invoice could be issued under S. 23 of Sales Tax Act, 1990 by the specified persons only and its subsection (2) in unequivocal terms forbade that "no person other than a registered person" or a person paying retail tax could issue an invoice hence, a person not registered under the Sales Tax Act, 1990 could not issue a sales tax invoice---Section 26 of Sales Tax Act, 1990 required every 'registered person' to furnish a true and correct return within the due date, thus, an un-registered person or a person liable to be registered could not file its return, since no procedure was provided for an unregistered person to file its return and to collect tax from the recipient, without issuance of sales tax invoice---Under the provisions of Sales Tax Act, 1990 and the Sales Tax Rules, 2006, only a registered person having sales tax registration number, ID, Pin code and password, could file sales tax returns and without sales tax registration number, a person liable to be registered could not file sales tax return, charge, levy and pay sales tax or be subjected to audit under S.25 of the Act hence, imposition of sales tax by the department without first assigning sales tax registration number did not find…

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