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The State of Karnataka and anr. Vs. P.K.P. Abdul Hakeem and Co. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberWrit Appeal No. 2765 of 1982 and Writ Petition Nos. 10206 to 10209, 10589, 10590, 14367, 14392, 1620
Judge
Reported inILR1985KAR2695; [1985]59STC203(Kar)
ActsAndhra pradesh Gen. Sales Tax Act, 1957 - Sections 2, 5, 5A, 6, 6B and 8; Central Sales Tax Act, 1956 - Sections 1, 5, 6, 8, 8(2A) and 9(2); Karnataka Sales Tax Act, 1957 - Sections 25A
AppellantThe State of Karnataka and anr.
RespondentP.K.P. Abdul Hakeem and Co.
Appellant AdvocateB.V. Katageri and ;K. Srinivasan, Advs.
Respondent AdvocateThe Government Adv.
Excerpt:
- karnataka stamp act, 1957.[k.a. no. 34/1957]. section 2(e) & 2 (mn): [h.v.g. ramesh, j] duly stamped & market value held, when the words duly stamped and market value are clearly explained in the act and based on that if the registering authority comes to a conclusion as to what would be the proper market value and accordingly insists on the party to make such payment and on such payment, registers the document, the same would not in any way come in the way of the right of the party much less it can be treated as it is in violation of the provisions of the registration act . on facts, held, after amendment of section 45a and section 45b, the stand taken by the respondent authorities insisting upon the petitioners to deposit the amount as per the market value cannot be found fault.....puttaswamy, j.1. as common questions of law arise for determination in these cases, we propose to dispose of them by a common order. 2.1. all the petitioners in the writ petitions and respondent in writ appeal no. 2765 of 1982 who was the petitioner in writ petition no. 12324 of 1982 (reported as p. k. p. abdul hakeem & co. v. state of karnataka in [1983] 52 stc 205.) out of which the said appeal arises before us (hereinafter referred to as the 'petitioner') are registered dealers under the karnataka sales tax act of 1957 (karnataka act 25 of 1957) (k.s.t. act) and the central sales tax act of 1956 (central act no. 74 of 1956) (c.s.t. act). all of them are aggrieved by the actions of the assessing to the revising authorities as the case may be proposing to levy and collect additional tax.....
Judgment:

Puttaswamy, J.

1. As common questions of law arise for determination in these cases, we propose to dispose of them by a common order.

2.1. All the petitioners in the writ petitions and respondent in Writ Appeal No. 2765 of 1982 who was the petitioner in Writ Petition No. 12324 of 1982 (Reported as P. K. P. Abdul Hakeem & Co. v. State of Karnataka in [1983] 52 STC 205.) out of which the said appeal arises before us (hereinafter referred to as the 'petitioner') are registered dealers under the Karnataka Sales Tax Act of 1957 (Karnataka Act 25 of 1957) (K.S.T. Act) and the Central Sales Tax Act of 1956 (Central Act No. 74 of 1956) (C.S.T. Act). All of them are aggrieved by the actions of the assessing to the revising authorities as the case may be proposing to levy and collect additional tax under section 6-B of the K.S.T. Act on sales tax levied on them under the C.S.T. Act.

2.2. Whether the same is permissible or not is the short and intricate question that arises for determination in these cases.

2.3. But, in order to appreciate the contentions urged before us, it is useful to notice the facts in Writ Appeal No. 2765 of 1982 and Writ Petition No. 25935 of 1982 as illustrative only and not as exhaustive.

3.1. Writ Appeal No. 2765 of 1982 : P. K. Abdul Hakeem and Company of Mysore, petitioner is Writ Petition No. 12324 of 1982 a partnership firm of partners engaged in the business of dealing in hides and skins, purchased them locally either from unregistered or registered dealers and effect their sales in the course of inter-State trade. For the relevant period atleast hides and skins were dealers goods and were so assessable to tax under the K.S.T. and C.S.T. Acts.

3.2. For the period from 1st April, 1978 to 31st March, 1979 the petitioner filed its return under the C.S.T. Act before the Commercial Tax Officer, First Circle, Mysore (C.T.O.) disclosing a total and taxable turnover of Rs. 12,07,915.20 out of which a sum of Rs. 12,03,129 was supported by form C and the balance of Rs. 4,787.00 was not supported by form C. On an examination of that return and the books of account produced thereto, the C.T.O. completed his assessment against the petitioner on 13th October, 1980 (annexure A in Writ Petition No. 12324 of 1982) as hereunder :

'Accordingly the assessment under C.S.T. Act is concluded as under :

Gross and net inter-State sales Rs. 12,07,915.201. Inter-State sales of hides andskins with C forms @ 2% Rs. 12,03,129.00 24,062.562. do. without C forms @ 4% 4,787.00 191.48------------- ---------Rs. 12,07,915.00 24,254.04OR 24,254.00Tax levied at Rs. 24,254.00.' On this assessment made by the C.T.O. the petitioner is not aggrieved.

3.3. But, on 16th February, 1982 the C.T.O. under section 12-B of the K.S.T. Act called upon the petitioner to pay a sum of Rs. 2,406.25 as additional tax under section 6-B of the K.S.T. Act (Annexure B) on the aforesaid tax levied under the C.S.T. Act. The said notice that is material reads thus :

'NOTICE UNDER SECTION 12-B K.S.T. ACT, 1957

Please take notice that final assessment order under K.S.T. Act, 1957 and C.S.T. Act, 1956 were passed on 13-10-1980 in which the total and taxable T.O. were determined at Rs. 10,23,707.00 and Rs. 11,500.00 under the K.S.T. Act, 1957 and Rs. 12,07,915.00 and Rs. 12,07,915.00 under C.S.T. Act, 1956. While passing the assessment records the element of additional tax has not been levied and collected. The additional tax under K.S.T. Act, 1957 comes to Rs. 23.00 and under the C.S.T. Act, 1956 it comes to Rs. 2,406.25. The local rate of tax as per section 8(2A) of the C.S.T. Act, 1956 has to be taken into consideration in respect of the inter-State sales covered by C forms, i.e., Rs. 12,03,128.00.

Objections, if any, should be filed within 3 days from the date of receipt of this notice and also pay the additional taxes at once.'

In Writ Petition No. 12324 of 1982, the petitioner challenged the same under article 226 of the Constitution. On 2nd April, 1982 Rama Jois, J., allowed the said writ petition and quashed the said notice in so far as it proposed to levy additional tax on the taxes payable under the C.S.T. Act, which is since reported as P. K. P. Abdul Hakeem & Co. v. State of Karnataka [1983] 52 STC 205. Against the said order made by Rama Jois, J., the State and the C.T.O. have filed Writ Appeal No. 2765 of 1982.

4.1. Writ Petition No. 25935 of 1982 : M/s. Velji Mulji & Company of Gadag, petitioner, a partnership firm of partners, a registered dealer under the K.S.T. and C.S.T. Acts, is a dealer in cotton which is one of the declared goods.

4.2 For the period from 4th November, 1985 to 23rd October, 1976, the petitioner filed its return under the K.S.T. and C.S.T. Acts before the Assistant Commissioner of Commercial Taxes (Assessments), Dhrawad (C.T.O.) declaring the intra-State sales and inter-State sales turnovers. After completing assessment under the K.S.T. Act separately with which we are not now concerned, the C.T.O. on 16th January, 1978 completed his assessment against the petitioner under the C.S.T. Act (annexure A) as hereunder :

'The assessment is therefore finalised as under :

Gross turnover Rs. 4,68,06,970.93Less : Turnover assessed under K.S.T. Act, 1957 Rs. 2,64,56.078.81------------------Total inter-State sales Rs. 2,03,50,892.12Less : Deduction u/s 8-A20031559 x 3------------100 x 3 Rs. 5,83,443.43-------------------Taxable inter-State sales Rs. 1,97,67,448.69Classification1. Inter-State sales of cotton with C formsRs. 1,97,67,448.69 @ 3% Rs. 5,93,023.47Less : Tax already paid Rs. 5,90,292.53---------------Balance Rs. 2,730.94--------------- Issue Demand notice accordingly.'

So far as this assessment, the petitioner is not aggrieved.

4.3. But, on 26th June, 1982 the C.T.O. has issued notice to the petitioner calling upon it to pay a sum of Rs. 59,302.00 (annexure B) as additional tax under section 6-B of the K.S.T. Act on the inter-State sales turnovers of cotton. The said notice that is material reads thus :

'NOTICE

Please take notice that the rate of tax payable under Karnataka Sales Tax At, 1957 is increased by levy of additional tax at the rate prescribed under section 6-B of the said Act whereas the increased rate of tax has not been considered while making your order of assessment under Central Sales Tax Act, 1956 on 16-1-1978 for the period from 4-11-1978 to 23-10-1976 on the following goods.

----------------------------------------------------------------------Name of Turnover Rate Correct Differentialthe com- of tax rate of amount of taxmodify levied tax app- now payablelicable----------------------------------------------------------------------Cotton Rs. 1,97,67,448.69 3% 3.3% Rs. 59,302.00---------------------------------------------------------------------- This being an error apparent on the face of the records, I intend to rectify the same by adopting the correct rate of tax shown at column No. 4 above and amend the said order suitably in exercise of powers vested in me under section 25-A of the Karnataka Sales Tax Act, 1957 read with section 9(2) of Central Sales Tax Act, 1956.

So you are hereby given an opportunity of being heard and filing objections, if any, against the proposed levy within seven days from the date of this notice.'

In this petition the petitioner has challenged the said notice under article 226 of the Constitution.

5. In the other cases, the position is similar to the above two cases.

6. The petitioners have urged that additional tax leviable under section 6-B of the Act was a separate and distinct tax levied under the K.S.T. Act and cannot be levied and collected on the inter-State sales or purchases of turnovers exclusively regulated by the C.S.T. Act.

7. The respondents have urged more than one ground in justification of their demands that will be noticed and dealt by us in due course.

8. Sriyuths K. Srinivasan, K. P. Jagadish and B. V. Katageri, learned Advocates, have appeared for the petitioners.

9. Sri S, Rajendra Babu, learned Government Advocate, has appeared for the appellant in Writ Appeal No. 2765 of 1982 and the respondents in all the writ petitions.

10. Both sides have relied on a large number of rulings in support of their respective cases and we will refer to them at the appropriate stages.

11. The case of the petitioner in Writ Petition No. 12324 of 1982 has been accepted by Rama Jois, J., in these words :

'4. Section 6-B of the 'Act' provides for levy of additional tax on the turnover, as provided in the said section. There is no provision in the Central Sales Tax Act providing for the levy of additional tax. The notice, however, states that the additional tax payable under the Central Act comes to Rs. 7,265.40. The demand to this extent is plainly unsupportable in law.'

Sri Babu has contended that this order made by Rama Jois, J., without examining all the relevant provisions of the K.S.T. and C.S.T. Acts and the rulings of the Supreme Court and this Court touching on them is unsustainable in law.

12. Sri Katageri appearing for the petitioner/respondent has sought to support the order of the learned Judge.

13. In para 1 to 3 of the order, the learned Judge has set out the facts of the case. The discussion and the conclusion of the learned Judge on the question is contained in para 4 only which we have extracted earlier in full. The succeeding para of the order sets out the relief granted by the Court. We have no doubt that if the Revenue had highlighted the provisions and the rulings placed before us and seriously contested the matter, the learned Judge would have noticed, dealt and expressed his opinion. When the Revenue had failed to highlight and contest as is now done before us, we cannot take exception to the brief discussion and conclusion of the learned Judge. Even otherwise our power is co-extensive with that of the learned single Judge for which reason it is proper for us to deal with the matter fully and decide the same one way or the other that too when that very question arises in the connected writ petitions. We, therefore, now proceed to examine the same.

14. Sri Srinivasan has urged that the additional tax levied under section 6-B of the Act was a separate and distinct levy which cannot be levied on inter-State sales turnovers exigible to taxes under the C.S.T. Act.

15. Sri Babu has urged that section 6-B of the K.S.T. Act which stipulates the rates of taxes on intra-State sales or purchases mutatis mutandis applies to inter-State sales and purchases by reason of section 8 of the C.S.T. Act.

16. We first consider it necessary to notice the legislative history of section 6-B of the Act and ascertain the nature of the levy that prevailed from time to time.

17. The Mysore Sales Tax (Amendment) Act of 1971 (President's Act No. 18 of 1971) (1971 Act) that came into force on 1st December, 1971 (vide Notification No. FD 412 CSL 71 dated 30th November, 1971) for the first time introduced section 6-B in the K.S.T. Act providing for levy of additional tax under that Act. Section 6-B introduced by the 1971 Act reads thus :

'6-B. Levy of additional tax. - (1) There shall be levied and collected from every dealer liable to pay tax under section 5 or under section 6, an additional tax on the sale or purchase of goods liable to tax under this Act, at the rate of two paise in the rupee on the sales tax or purchase tax or both payable by such dealer :

Provided that in respect of the sale or purchase of any of the declared goods mentioned in the Fourth Schedule, the tax plus the additional tax shall not exceed three per cent. of the sale or purchase price thereof.

(2) The provisions of this Act and the rules made thereunder including those relating to refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the additional sales tax or purchase tax or both as they apply in relation to the levy, assessment and collection of sales tax and purchase tax under this Act'.

The Karnataka Sales Tax (Second Amendment) Act, 1975 (Karnataka Act No. 16 of 1975 (1975 Act) that came into force on 1st April, 1975 [vide : sub-section (2) of section 1 of that Act] substituted the original section 6-B from 1st April, 1975 as here under :

'6-B. Levy of additional tax. - (1) There shall be levied and collected from every dealer liable to pay tax under section 5 or under section 6 and whose total turnover is ten lakh rupees or more in a year, an additional tax at the rate of ten paise in the rupee on the sales tax or purchase tax or both payable by such dealer :

Provided that in respect of the sale or purchase of any of the declared goods mentioned in the Fourth Schedule, the tax together with the additional tax shall not exceed three per cent. of the sale or purchase price thereof.

(2) The provisions of this Act and the rules made thereunder including those relating to refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the additional sales tax or additional purchase tax or both, as they apply in relation to the levy, assessment and collection of sales tax or purchase tax under this Act'.

The Karnataka Sales Tax Act (Amendment) Act of 1977 (Karnataka Act No. 17 of 1977) (1977 Act) that came into force on 1st April, 1977 [vide sub-section (2) of section 1 of that Act] substituted section 6-B(1) dealing with the levy as hereunder :

'(1) There shall be levied and collected from every dealer liable to pay tax under this Act, an additional tax at the rates shown below, namely :-

(a) In the case of a dealer liable to pay tax under section 5 or under section 6 (i) whose total turnover does not Nil.exceed five lakhs or rupeesin a year;(ii) whose total turnover exceeds Seven and half per cent. offive lakhs of rupees but does the sales tax or purchasenot exceed ten lakhs of rupees tax or both payable by suchin a year. dealer.(iii) whose total turnover exceeds Ten per cent. of the salesten lakhs of rupees in a year. tax or purchase tax or bothpayable by such dealer.(b) In the case of a dealer liable Ten per cent. of the taxto pay tax under section 25-B. payable by such dealer.'

The Karnataka Sales Tax (Amendment) Act of 1981 (Karnataka Act No. 7 of 1981) (1981 Act) that came into force from 4th April, 1981 substituted the earlier section 6-B in its entirety and in its place introduced a new section from that day which reads thus :

'6-B. Levy of turnover tax. - (1) Every dealer whose total turnover in a year exceeds rupees one lakh shall, in addition to the tax payable, if any, under other provisions of this Act, pay a tax at the rate of one-half per cent. of his total turnover :

Provided that no tax under this sub-section shall be payable on any part of such turnover which relates to, -

(i) sale or purchase of goods specified in the Fifth Schedule;

(ii) sale or purchase of goods specified in the Fourth Schedule;

(iii) sale or purchase of goods in the course of inter-State trade or commerce;

(iv) sale or purchase of goods in the course of export outside the territory of India or sale or purchase in the course of import into the territory of India; and

(v) all amount collected by way of tax under the provisions of this Act or the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956).

(2) The provisions of this Act and the rules made thereunder including those relating to refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the tax payable under sub-section (1), as they apply in relation to the levy, assessment and collection of sales tax or purchase tax under this Act.'

The Karnataka Taxation and Certain Other Laws (Amendment) Act, 1982 (Karnataka Act No. 13 of 1982) (1982 Act) substituted the above provision by a new provision retrospectively with effect from 29th March, 1981 and the same reads thus :

'6-B. Levy of turnover tax. - (1) Every dealer whose total turnover in a year exceeds, rupees one and a half lakhs, whether or not the whole or any portion of such turnover is liable to tax under any other provision of this Act, shall be liable to pay a tax at the rate of one-half per cent. of his total turnover :

Provided that no tax under this sub-section shall be payable on that part of such turnover which relates to, -

(i) sale or purchase of goods specified in the Fifth Schedule;

(ii) sale or purchase of goods specified in the Fourth Schedule;

(iii) sale or purchase of goods in the course of inter-State trade or commerce;

(iv) sale or purchase of goods in the course of export out of the territory of India or sale or purchase in the course of import into the territory of India;

(v) all amount collected by way of tax under the provisions of this Act or the Central Sales Tax Act, 1956 (Central Act 74 of 1956);

(vi) all amounts falling under the head 'freight', when specified and charged for by the dealer separately without including such amounts in the price of the goods sold; and

(vii) all amounts falling under the head 'charges for packing materials and cost of labour', when specified and charged for by the dealer separately without including such amounts in the price of the goods sold :

Provided further that save as otherwise provided in this sub-section, no other deduction shall be made from the total turnover of a dealer for the purposes of this section.

(2) The provisions of this Act and the rules made thereunder shall, so far as may be, apply in relation to the assessment, collection or refund of the turnover tax as they apply in relation to the assessment, collection or refund of tax under the other provisions of this Act.'

The section is in force from 29th March, 1981 without any amendment thereafter.

18. From 1st December, 1971 to 31st March, 1975 during which period section 6-B introduced by the 1971 Act was in force, an additional tax of two paise in the rupee on the sales tax or purchase tax or both was levied on a dealer. During this period on every sale or purchase tax or both a dealer became liable to pay an additional tax of two paise on every rupee of sales tax or purchase tax or both payable by him under the K.S.T. Act.

19. For the period from 1st April, 1975 to 31st March, 1977 during which period section 6-B as incorporated by the 1975 Act was in force, the nature of levy of additional tax on sale or purchase was retained with the changes introduced therein, that change being the levy made only on dealers whose total turnover was ten lakhs or more and at a higher rate. For the period from 1st December, 1971 to 31st March, 1977 subject to what we have said earlier, the nature of levy was really an additional tax on sales or purchase tax or both.

20. But, from 1st April, 1977 the nature of levy made under section 6-B became entirely different. The nature of levy from 1st April, 1977 was really a turnover tax on the total turnover of a dealer. The controversies raised by the dealers on the scope and ambit of section 6-B of the Act on and after 1st April, 1977 and their validity at least in so far as whether the turnovers of dealers under the C.S.T. Act should or should not be included in determining the turnover for levy of turnover tax on and from that date are concluded by the two Division Bench rulings of this Court in B.P. Automobiles v. State of Karnataka [1984] 55 STC 93; (1983) 2 Kar LJ 105 and Shantilal and Brothers v. State of Karnataka [1985] 59 STC 178; (1984) 1 Kar LJ 69. We are here not concerned with any liabilities arising on and after 1st April, 1977 which has necessarily to be regulated in conformity with those rulings only.

21. With the above analysis, we now proceed to examine the rival contentions urged before us.

22. We have earlier set out section 6-B of the K.S.T. Act as it stood from 1st December, 1971 to 31st March, 1977 and thereafter also. Section 6-B of the K.S.T. Act that imposes an additional levy is a charging section. A charging section must be construed strictly is well-settled. Section 6-B of the K.S.T. Act levies an additional tax on sales or purchases or both brought to tax under that Act and that Act only and not on inter-State sales brought to tax under the C.S.T. Act. Section 6-B does not intend to levy additional tax on inter-State sales and in any event on declared goods with which we are primarily concerned in these cases. We are not concerned with the legislative wisdom or legislative omission in levying the additional tax even assuming that it was competent to levy on such turnovers also. The proviso in section 6-B(1) of the Act, as that section stood from time to time declaring that the rates of taxes leviable on declared goods shall not exceed the particular rates referred to therein cannot on any principle be read as empowering the levy under that provision on inter-State sales or purchases brought to tax under the C.S.T. Act. On this analysis and construction of section 6-B, we are of the view that the construction suggested for the petitioners which has also found favour with Rama Jois, J., in Writ Petition No. 12324 of 1982 (P. K. P. Abdul Hakeem & Co. v. State of Karnataka [1983] 52 STC 205.) is well-founded. We are also of the view that this conclusion also stems from the two Division Bench rulings of this Court in B.P. Automobiles [1984] 55 STC 93 and Shantilal and Brother [1985] 59 STC 178 cases.

23. We will now examine whether section 8 of the C.S.T. Act in any way detracts from our above conclusion and supports the case of the Revenue as strongly pressed before us.

24. Section 8(1), (2) and (2A) of the C.S.T. Act that is material for our purpose reads thus :

'8. Rates of tax on sales in the course inter-State trade or commerce. -

(1) Every dealer, who in the course of inter-State trade or commerce -

(a) sells to the Government any goods; or

(b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3);

shall be liable to pay tax under this Act, which shall be four per cent. of his turnover.

(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1). -

(a) in the case of declared goods, shall be calculated at twice the rate applicable to the sale or purchase of such goods inside the appropriate State; and

(b) in the case of goods other than declared goods, shall be calculated at the rate of the per cent. or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher;

and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law.

(2A) Notwithstanding anything contained in sub-section (1A) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent. (whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate.

Explanation. - For the purposes of this sub-section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods.'

This section only stipulates the rates of taxes payable on inter-State sales or purchases. Section 8 is not a charging section and does not create liabilities. Section 6 of the C.S.T. Act is the charging section of that Act. The classifications made in section 8 of the C.S.T. Act is only for purposes of regulating the rates of taxes only. Section 8 also does not declare that the additional taxes if any levied under a State enactment like section 6-B of the K.S.T. Act shall apply as if enacted under section 8 of the C.S.T. Act. We are of the view that section 8 of the C.S.T. Act does not in any way advance the case of the Revenue to detract from what we have expressed earlier.

25. In Ashok Service Centre v. State of Orissa : [1983]2SCR363 on which very strong reliance was placed for the Revenue, the Court was examining the scope and ambit of the Orissa Additional Sales Tax Act of 1975 (Orissa Act) and its validity reproduced in its entirety in para 7 of the judgment. The Orissa Act unlike the Karnataka Act, provided for increase or levy of additional tax on the existing levy of sales tax in the parent Sales Tax Act of 1947 of that State. The Orissa Act, unlike the Karnataka Act expressly provided for increase on the existing rates of taxes or levy of additional tax on the existing rates of taxes on declared goods subject to the maximum stipulated in the proviso to section 2 of that Act. But, that is not the position in section 6-B of the Act. Section 6-B does not provide for enhancement of rates of taxes levied on declared goods or on inter-State sales, and therefore, the ratio in Ashok Service Centre's case [1983] 53 STC 1 does not bear on the point and assist the Revenue.

26. In S. Kodar v. State of Kerala : [1975]1SCR121 , the Court was principally examining the legislative competence of the State to levy additional tax or turnover tax imposed by the Tamil Nadu Additional Sales Tax Act, 1970. In this case also, the Court was not examining a similar provision which does not provide for enhancement of levy on declared goods or on inter-State sales or purchases. Hence, the ratio in Kodar's case : [1975]1SCR121 does not also bear on the point.

27. In A. S. Ramachandra Rao v. State of Andhra Pradesh [1969] 24 STC 133 approved by the Supreme Court in Kodar's case : [1975]1SCR121 , the Andhra Pradesh High Court was examining the constitutional validity of section 5-A of the Andhra Pradesh General Sales Tax Act, 1957 which reads thus :

'Levy of additional tax on turnover - Every dealer who is liable to pay tax under section 5 shall, in addition to the tax payable under that section pay for each year a tax at the rate of one-fourth naya paise on every rupee of his turnover liable to tax, if his total turnover for that year is rupees three lakhs or more.'

This section as also held by the A.P. High Court and the Supreme Court provided for levy of additional tax on turnover. But, that is not the position in section 6-B of the Act for the period from 1st December, 1971 to 31st March, 1977. We are therefore of the view that the ratio in Ramachandra Rao's case [1969] 24 STC 133 does not also bear on the point and assist the Revenue.

28. What emerges from the above discussion is that the conclusion reached by Rama Jois, J., in Writ Petition No. 12324 of 1982 (P. K. P. Abdul Hakeem & Co. v. State of Karnataka [1983] 52 STC 205.) assailed in W.A. No. 2765 of 1982 is correct and notices challenged in the writ petitions before us proposing to levy additional tax on declared goods or inter-State sales under section 6-B of the Act is wholly without jurisdiction and to that extent they are liable to be quashed.

29. In the light of our above discussion, we make the following orders and directions :

(i) We dismiss Writ Appeal No. 2765 of 1982 and uphold the order of Rama Jois, J., in Writ Petition No. 12324 of 1982 (P. K. P. Abdul Hakeem & Co. v. State of Karnataka [1983] 52 STC 205.).

(ii) We quash the notices impugned in the writ petitions challenged before us in so far as they relate to levy of additional tax under section 6-B of the Karnataka Sales Tax Act on inter-State sales or declared goods and not in other respects, if any, without examining their validity in other respects. But, liberty reserved for their determination before the authorities constituted under the Act, in accordance with law.

30. Writ Appeal and writ petitions are disposed of in the above terms. But, in the circumstances of the case, we direct the parties to bear their own costs in all these cases.


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