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Walkar Anjaria and Sons Private Ltd. and ors. Vs. State of Rajasthan and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtRajasthan High Court
Decided On
Case NumberCivil Misc. Writ Petns. Nos. 568 of 1966, 83 and 277 of 1967 and 302 of 1965
Judge
Reported inAIR1969Raj162; [1969]23STC74(Raj)
ActsRajasthan Sales Tax Act, 1954 - Sections 5A and 12; Constitution of India - Articles 286, 286(1) and 301; Central Sales Tax Act, 1956 - Sections 15;
AppellantWalkar Anjaria and Sons Private Ltd. and ors.
RespondentState of Rajasthan and ors.
Appellant Advocate J.P. Jain, Adv. in W.P. No. 568/66,; M.C. Bhoot, Adv. In W.P. No. 83/67,;
Respondent Advocate M.M. Vyas, Addl. Adv. General and; S.K. Tiwari, Deputy Govt. Adv.
DispositionPetitions dismissed
Cases Referred and Anandji Haridas and Co. (P) Ltd. v. S. P. Kasture
Excerpt:
- - 277 of 1967 is a partnership firm registered under the rajasthan sales tax act as well as the central sales-tax act and it carries on business of exporting raw wool and goat hair outside india. it appears that the assessing authority further issued notice under section 16(1)(b) of the act on 5-5-1965 to the petitioner to show cause why penalty be not imposed on the petitioner for not depositing purchase tax for the year 1962-63 and a demand notice has also been issued for payment of the tax for the year 1963-64. in this petition also the petitioner has prayed that the levy of purchase tax on purchase of cotton may be declared unconstitutional and the assessment orders as well as the show cause notice for levy of penalty and the demand notice may be quashed. ' to a like effect are.....lodha, j.1. these four writ applications under article 226 of the constitution of india can be conveniently disposed of by a common judgment. by all these petitions, the petitioners have challenged the constitutionality and validity of section 5-a of the rajasthan sales tax act no. xxix of 1954.2. the petitioner in writ petition no. 568/1966 is messrs. walkar anjaria, and sons private ltd., beawar, which is a registered dealer under the rajasthan sales tax act no. 29 of 1954 (which will hereinafter be called the act). it deals in purchase of raw wool and export of the same to foreign countries. its head office is at jamnagar in the state of gujarat. the main places of business of the petitioner in rajasthan are beawar, bikaner and kukri. for the assessment year 1963-64 (corresponding.....
Judgment:

Lodha, J.

1. These four writ applications under Article 226 of the Constitution of India can be conveniently disposed of by a common judgment. By all these petitions, the petitioners have challenged the constitutionality and validity of Section 5-A of the Rajasthan Sales Tax Act No. XXIX of 1954.

2. The petitioner in writ petition No. 568/1966 is Messrs. Walkar Anjaria, and Sons Private Ltd., Beawar, which is a registered dealer under the Rajasthan Sales Tax Act No. 29 of 1954 (which will hereinafter be called the Act). It deals in purchase of raw wool and export of the same to foreign countries. Its head office is at Jamnagar in the State of Gujarat. The main places of business of the petitioner in Rajasthan are Beawar, Bikaner and Kukri. For the assessment year 1963-64 (corresponding accounting period being from 1-9-1962 to 31-8-1903) the petitioner claimed deduction of Rs. 77,29,254 25 paise on account of purchase of raw wool by the petitioner in the course of export outside India on the ground that the said turnover was not taxable under the second proviso to Section 5-A of the Act It also claimed refund of Rs. 2400/- which had been paid by the petitioner in lieu of the exemption certificate granted to it under Section 4(2) of the Act. The assessing authority viz. the Commercial Taxes Officer. Special Circle, Jaipur by his Order dated 4-3-1968 accepted the petitioner's claim and held that the purchase of raw wool by the petitioner for the purpose of export outside India was not taxable.

He also ordered refund of Rs. 2400/-to the petitioner on account of the fee paid by the latter for obtaining the exemption certificate. The petitioner goes on to state that while his application for refund of the fee for exemption certificate was pending, it received a notice under Section 12 of the Act dated 1-3-1966 signed by Shri Prahlad Rai Sharma, who had been meanwhile transferred as the Commercial Taxes Officer, Special Circle, Jaipur. It was mentioned in the notice that a part of the petitioner's business had escaped assessment to tax, on account of no purchase tax having been charged on the export of raw wool outside India during the assessment year 1963-64 resulting in an underassessment of Rs. 33,298.45 Paise and also on account of erroneous order for refund of the fee of exemption certificate of Rs. 2400/-. After issue of the said notice the Assessing Authority passed re-assessment order on 13-5-1966 and held that purchase tax is leviable on Rs 61,35,324.34 P. under Section 5-A of the Act being the turnover of exported raw wool out of India prior to 2-3-1963. It was also held that the assessee was not entitled to refund of fee paid for grant of exemption certificate. The petitioner therefore filed this writ application for the following reliefs :--

(a) Section 5-A of the Act be declared as void and ultra vires of the Constitution.

(b) All the notifications issued for levy of purchase tax under Section 5-A be declared null and void.

(c) The Order of the Assessing Authority dated 13-5-1966 (Ex. 7) be quashed.

3. Writ application No. 83 of 1967 is filed by Messrs. Bhoot Oil Mills Ltd., Jodhpur. The petitioner is an oil milling industry and manufactures various kinds of edible oils from oil seeds for sale. It is a registered dealer under the Act. It is alleged that the Government of Rajasthan by its notification dated 7-10-1960 applied Section 5-A to certain transactions in oil seeds and subjected them to purchase tax. The petitioner has prayed that the levy of tax on the purchase of oil seeds may be declared void and unconstitutional.

4. The petitioner Messrs. Sohanlal Prabhu Dayal Kukar in writ petition No. 277 of 1967 is a partnership firm registered under the Rajasthan Sales Tax Act as well as the Central Sales-Tax Act and it carries on business of exporting raw wool and goat hair outside India. It is alleged that during the assessment years 1964-65 and 1965-66 the petitioner exported raw wool and goat-hair outside India after purchasing the same in Rajas-than with a view to implement the contracts entered into by it with the foreign firms. It has been prayed by the petitioner that Section 5-A of the Act be struck down and it may further be held that the purchase of raw wool and goat-hair made by the petitioner is not liable for payment of purchase tax. It has also been prayed that the assessment order dated 14-12-1966 for the period commencing from 30-4-1964 to 12-4-1966 (that is, for the assessment years 1964-65 and 1965-66) by which the purchases of raw wool and goat hair made by the petitioner were subjected to tax, be set aside.

5. Firm Messrs. Ganeshdas Hamirmal of Beawar which is the petitioner in Writ Petition No. 302 of 1965 purchased cotton in Rajasthan during the period 26-3-1962 to 17-10-1963 (i. e. the assessment years 1962-63 and 1963-64). It is alleged that on 12-3-1965 the Commercial Taxes Officer, Survey and Investigation, Ajmer, assessed the petitioner to purchase tax on purchase of cotton during the year 1962-63 under Section 5-A of the Act, and similar tax was assessed on purchase of cotton during the year 1963-64 on 1-5-1965. Assessment Orders for years 1962-63 and 1963-64 dated 12-3-1965 and 1-5-1965 respectively have been challenged by this writ application. It appears that the assessing authority further issued notice under Section 16(1)(b) of the Act on 5-5-1965 to the petitioner to show cause why penalty be not imposed on the petitioner for not depositing purchase tax for the year 1962-63 and a Demand Notice has also been issued for payment of the tax for the year 1963-64. In this petition also the petitioner has prayed that the levy of purchase tax on purchase of cotton may be declared unconstitutional and the assessment orders as well as the show cause notice for levy of penalty and the Demand Notice may be quashed.

6. All the writ applications have been opposed by the learned Additional Advocate General on behalf of the State of Rajasthan.

7. The common point argued on behalf of the petitioners in all the cases is that Section 5-A of the Act is ultra vires the provisions of the Constitution, and, therefore, must be struck down. Mr. J, P. Jain who has advanced the leading argument has urged that Section 5-A of the Act by which the 'purchase tax' has been imposed has created an impediment in the trade, commerce and intercourse throughout the territory of India in contravention of the provisions of Article 301 of the Constitution. He has submitted that no previous sanction of the President was obtained before introducing Section 5-A in the Act and, therefore, the levy of the tax in question cannot be upheld under Article 304(b) of the Constitution. The impugned tax has also been attacked under Article 286 of the Constitution on the ground that the State Legislature was not competent to impose a tax on the sale or purchase of goods taking place in the course of export of the goods out of the territory of India and since Section 5-A seeks to bring to tax the purchase made by the petitioners in the course of export of goods out of India, it is ultra vires Article 286 of the Constitution and must be struck down. He has also challenged the validity of notice under Section 12 of the Act for reassessment on account of escapement of tax.

8. Mr. M. C. Bhoot, learned counsel for the petitioner -- Messrs. Bhoot Oil Mills in writ petition No. 83 of 1967, has challenged the validity of 'purchase tax' on purchase of oil seeds under Section 5-A of the Act also on the ground that the levy is in contravention of Section 15 of the Central Sales Tax Act, No. 74 of 1956 (which will hereinafter be called the Central Act) The argument of Mr. Bhoot has also been adopted by Shri H. C. Jain on behalf of the petitioner Messrs. Ganeshdas Hamirmal in Writ Petition No. 302 of 1965 which deals in cotton.

9. We shall deal with these contentions seriatim.

10. The first question for our determination is, whether 'purchase tax' creates an impediment in trade, commerce and intercourse throughout the territory of India and is thus hit by Article 301 of the Constitution, and if so, whether the tax is liable to be adjudged invalid for want of sanction of the President of India. In this connection, we may first examine the relevant provisions of the Act and the notifications issued thereunder. The Rajasthan Sales Tax Act No. 29 of 1954 received the assent of the President of India on 22nd December, 1954, and came into force with effect from 1st April, 1955. The Act was subsequently amended by the Rajasthan Sales Tax Act (Amendment) Act No. 18 of 1960, which will hereinafter be called the Amending Act. The Amending Act received the assent of the Governor of Rajasthan on 21-4-1960, but it never received the assent of the President of India. The following new section 5A was inserted by the Amending Act after Section 5 of the principal Act :--

'5-A. -- Levy of purchase tax -- Every dealer who in the course of his business purchases such goods other than exempted goods, as the State Government may, by notification in the official Gazette, specify, in circumstances in which no tax under Section 5 is payable on the sale price of such goods and either consumes such goods in the manufacture of other goods for sale or otherwise, or disposes of such goods in any manner other than by way of sale in the State, or despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-state trade or commerce, shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under Section 5:

Provided that no tax under this section shall be levied on a dealer in respect of any year in which the aggregate of purchase prices of all the goods purchased by him does not exceed five thousand rupees:

Provided further that the provisions contained in the first proviso to Section 5 shall apply to the tax leviable under this section as if for the word 'sale', wherever occurring therein, the word 'purchase' was substituted.'

11. By a notification dated 26-3-62, under Section 5A of the Act, the State Government specified the goods for the purpose of this section, and raw wool, cotton and oil-seeds were included among such goods. Subsequently by a notification dated 7th August 1962, the State Government in exercise of the powers conferred by Sub-section (2) of Section 4 of the Act exempted from payment of tax purchase of raw wool on the condition of payment of certain fee. It was provided that the exemption fee would be subject to the maximum of Rs. 2400/ per annum, and the exemption was made operative from 1st April 1962 to 31st March, 1963. By another notification dated 2nd March, 1963, the State Government withdrew all notifications regarding exemption of certain commodities including raw wool and by notification dated 23-3-1963, the State Government directed that the rate of tax on sale of raw wool, oil-seeds and cotton among other goods mentioned therein would be 2%.

12. At this stage, we may also reproduce Article 301 and Article 304 of the Constitution:--

Freedom of trade, commerce and intercourse.

'301. Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.'

Restriction on trade, commerce and intercourse.

'304. Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law:--

(a) impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and

(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purpose of Clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.'

13. In support of his contention that 'purchase tax' creates an impediment in trade and commerce throughout the country and is therefore hit by Article 301 of the Constitution, Mr. J. P, Jain has relied upon :-- Atiabari Tea Co. Ltd. v. State of Assam, AIR 1961 SC 232, Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, AIR 1962 SC 1406, Firm A. T. B. Mehtab Maiid & Co. v. State of Madras, AIR 1963 SC 928, State of Madhya Pradesh v. Bhailal Bhai, (1964) 15 STC 450= (AIR 1964 SC 1006), Venson Transports represented by its partner V. Srinivasan v. State of Andhra Pradesh represented by its Secretary (Home and Transport) Deptt. AIR 1962 Andh Pra 103 and Surajmal Baj v. State of Rajasthan, AIR 1954 Raj 260.

14. On the other hand the learned Additional Advocate General contends that a tax on the sale or purchase of goods does not interfere with the flow of trade, commerce or intercourse. Its impact on trade or commerce is not to restrict the trading or commercial activity. In support of his contention the learned Addl. Advocate General has relied on the Andhra Sugars Ltd. v. State of Andhra Pradesh, (1968) 21 STC 212 = (AIR 1968 SC 599). State of Madras v. N, K. Natraja Mudaliar, Civil Appeal No. 763 (N. C. T.) of 1967 decided on 18th April. 68 bv the Supreme Court, (AIR 1969 SC 147) and on D. R. & B. Oil Mills v. State of A. P., AIR 1964 Andh Pra 266.

In AIR 1982 SC 1406 (supra) it was observed by Das, J., --

'For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade. So long as a tax remains compensatory or regulatory it cannot operate as a hindrance.'

To a like effect are the observations of Subba Rao J. in the same case. His Lordship observed that property tax, profession tax, sales tax, excise duty and other taxes may all have an indirect effect on the free flow of trade but a law which has such repercussion does not need previous consent of the President. It is only a law that directly and immediately imposes a tax for general revenue purposes on the movement of trade that would be violating the freedom. However, on the other hand if the impact is indirect and remote, it would be unobjectionable. In AIR 1961 SC 232 (Supra) it was held that the purpose and object of the Assam Taxation (on Goods Carried by Roads or Inland Water Ways) Act No. 13 of 1954 which was passed by the Assam Legislature is to collect taxes on goods solely on the ground that they are carried by road or by inland roadways within the areas of the State. That being so, their Lordships were of the opinion that the Act has put a direct restriction on the freedom of trade and since in doing so, it has not complied with the provisions of Article 304(b) nor has it been validated by the assent of the President, under Article 255(c), it must be declared to be void.

Atiabari's case again came up for interpretation before their Lordships of the Supreme Court in Automobile Transport Rajasthan Company's case, AIR 1962 SC 1406 (supra) and it was clarified that regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and such measures need not comply with the requirement of the proviso to Article 304(b) of the Constitution. Firm A. T. B. Mehtab Majid's case. AIR 3963 SC 928 (supra) was one of discriminatory legislation made by a State and fell within the scope of Article 304(a). A legislation which comes within the purview of Article 304(a) cannot be rendered valid by reserving the bill for the assent of the President. It will be invalid if the discriminatory nature of lavy affects the freedom of trade and thus offends against Article 301. It is thus clear that in Mehtab Majid's case their Lordships were dealing with Article 304(a) and not with Article 304(b) of the Constitution. In (1964) 15 STC 450 = AIR 1964 SC 1006 (supra) also the question was one of discriminatory legislation. The case decided by Andhra Pradesh High Court. AIR 1962 Andh Pra 103 and AIR 1954 Raj 260 (supra) of this court have no direct bearing on the present case. Hence the authorities relied upon by the learned counsel for the petitioners are in our opinion of no avail to the petitioners.

15. On the other hand in (1968) 21 STC 212 = (AIR 1968 SC 599) (supra) Hon'ble Bachawat J. speaking for the Court observed, --

'Normally, a tax on sale of goods does not directly impede the free movement or transport of goods.'

In a still later case of the Supreme Court Civil Appeal No. 763(NCT) of 1967 D/- 18-4-1968 = (AIR 1969 SC 147) after surveying all the previous cases of the court on the subject His Lordship Shah J. observed as follows:--

'It must be taken as settled law that the restrictions or impediments which directly or indirectly hamper the free flow of trade, commerce and intercourse fall within the prohibition imposed by Article 301 and subject to other provisions of the Constitution, they may be regarded as void.'

Bachawat J, agreeing with Shah J, further held, --

'The tax is on the sale, the movement is incidental to and a consequence of the sale ...... .......................

I am therefore inclined to think that a law imposing a tax on intra-State sales does not offend Article 301. It seems to me that the Central Sales Tax Act 1956, is no exception to this rule. None of its provisions directly impede the movement of goods or the free flow of trade.'

These observations, in our view, clearly support the contention of the learned Additional Advocate General and thus it is manifest that Article 301 is violated only when a legislative or executive act operates to restrict the inter-State trade, commerce and intercourse directly and immediately as distinct from creating some indirect or inconsequential impediment which may fairly be regarded as remote. The sales-tax or purchase tax are levied fur augmenting the revenues of the State and as such cannot come within the ambit of Article 301 and Clause (b) of Article 304. If they impinge indirectly or remotely, it is difficult to bring them within the mischief of Clause (b) of Article 304.

16. We, therefore, find ourselves unable to accept the contention raised on behalf of the petitioners and are of opinion that 'purchase tax' does not operate as a restriction on the freedom of trade as contemplated by Article 301 of the Constitution, and especially Article 304(b). We, therefore, hold that the levy of the 'purchase tax' is not bad because the assent of the President was not taken under the proviso to Article 304(b).

17. This brings us to the second contention advanced by Mr. J. P. Jain that the State Legislature was not competent to impose tax in view of the provisions of Article 286 of the Constitution, Article 286(1) which is relevant for our purpose reads as below:--

'286(1) -- No law of a State shall impose or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place--

(a) outside the State; or

(b) in the course of the import of the goods into, or export of the goods out of, the territory of India.'

It is contended on behalf of the petitioners that the purchases of raw wool, cotton and goat-hair were made by them in Rajasthan for implementing the contracts, which the petitioners had made with foreign concerns, and thus these purchases were inextricably connected with the export trade and mainly took place in the course of export of goods outside the territory of India. It is submitted that the petitioners had made these purchases with the specific object of honouring the contracts. The Notification dated 23-3-1963 (Ex. 5) has also been attacked on the ground that by this notification the State seeks to charge purchase tax on the purchases made by the petitioners for sale in the course of export outside the territory of India. The Additional Advocate General, however contends that the purchase of goods made by the petitioners for the purpose of exporting them to implement the orders from a foreign buyer or expected to be received subsequently in the course of business cannot be considered as an act done 'in the course of export of the goods out of the territory of India.' On a plain reading of Article 286(1) it is crystal clear that a State cannot make any law imposing tax cm the purchase of goods where such purchase takes place in the course of export of the goods out of the territory of India The question whether a particular purchase of goods can be said to be in the course of the export of the goods out of the territory of India is a question of fact which is to be decided according to the facts and circumstances of each case.

Learned Additional Advocate General submits that Section 5-A does not seek to bring to tax purchases made in the course of export of goods out of India and has cited a few authorities before us to show that the impugned transactions of the petitioners do not amount to purchases made in the course of expert of goods out of the territory of India. In the State of Travancore-Cochin v. Shanmugha Vilas Cashew-Nut Factory, (1953) 4 STC 205 = (AIR 1953 SC 333), it was observed that the last purchase of goods made by the exporters for the purpose of exporting them to implement the orders already received from a foreign buyer or expected to be received subsequently in the course of business cannot come within the protection of Clause (1)(b) of Article 286. It was further observed that a purchase for the purpose of export like production or manufacture for export, is only an act purporting to export and cannot be regarded as an act done in the course of export of goods out of the territory of India. In State of Madras v. Gurviah Naidu & Co. Ltd., (1955) 6 STC 717= (AIR 1956 SC 158), their Lordships came to the conclusion that, the evidence on record only showed that after securing orders for supply of skins to London buyers, the respondents used to go about for purchasing the requisite kind and quantity of skins to implement such orders. Their Lordships were further pleased to observe that, --

'Such purchases were, it is true, for the purpose of export, but such purchases did not themselves occasion the export end consequently did not fall within the exemption of Article 286(1)(b) of the Constitution.'

In Hind Mercantile Corporation (P) Ltd. v. Commissioner of Commercial Taxes, (1966) 17 STC 175 (Mys) the learned Judges of the Mysore High Court held that it is only the sale under which the export is made that is protected by Article 286(1)(b) of the Constitution and a purchase which precedes such a sale does net fall within its purview though it is made for the purpose of, or with a view to export, and therefore, the purchases to fulfil antecedent contracts with foreign buyers do not fall under Article 286(1)(b) of the Constitution.

18. It is contended by Mr. Jain on behalf of the petitioners that the export or movement of the goods out of the territory of India, in the case of the petitioners took place as a result of contract between the seller and the purchaser so that the sale and the resultant export are parts of the same transaction and they cannot be dissociated from each other. He has submitted that it would not make any difference whether the goods, which are actually exported as a result of contract for sale for export are moved from Rajasthan after the contract had been entered into or the assessee in anticipation of contacting a foreign buyer moved the goods to Jamnagar. He has contended that the sale of good to the foreign buyer even by the commission agents on behalf of the assessee would amount to a sale in the course of export within the meaning of Article 286(1)(b) of the Constitution. In support of the stand taken by him, Mr, Jain has placed reliance on Janki Das Bhagat Ram v. Excise and Taxation Officer, Ludhiana, (1965) 16 STC 542 (Punj) and (1966) 17 STC 175 (Mys) (supra).

19. Thus from the foregoing discussion, it is clear that the question whether a transaction was made in the course of export of goods out of the territory of India is a mixed question of fact and law and it is not possible for us to determine this question in case of each of the petitioners while exercising our extra-ordinary jurisdiction. The petitioners can get this question decided by the Assessing Authority and/or by the appellate Authority if so advised.

20. In petitions Nos. 83/65 and 302/65 it has also been argued that oil seeds have been declared as goods of special importance in inter-State trade or commerce by Section 14 of the Central Act. It is submitted that under Section 15 of the Central Act every Sales Tax Law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions, namely:

'15(a) The tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed 2% of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.'

It is contended on behalf of the petitioners that cotton and oil seeds are declared goods and the levy of purchase tax under Section 5A of the Act in respect of cotton and oil seeds is neither definite nor ascertainable and there is a possibility of the tax being levied at mere than one stage. According to the petitioners, the State Legislation, which deals with the imposition of the tax in respect of sale and purchase of declared goods, must conform to the provisions of section 15(a) of the Central Act. The ingredients of those provisions are: (i) In respect of 'declared goods' a tax, either on sale or purchase, alone, can be levied; and it cannot be on both sale and purchase. (ii) The rate of tax should not exceed the maximum limit fixed by the Central Act, and (iii) The tax can be levied only at one stage. The essence of one stage taxation consists of fixation of a single point or stage, either by the State Act or the rules 'framed thereunder. Reliance has been placed on Bhawani Cotton Mills Ltd. v. State of Punjab, AIR 1967 SC 1616. In that case their Lordships came to the conclusion that there was no machinery in the Punjab General Sales Tax Act (46 of 1948) by which a dealer can ascertain whether his vendor, of the declared goods, has paid the tax already.

Learned Additional Advocate General, however, invited our attention to Rule 15 of the Rajasthan Sales Tax Rules 1955 and Notification No. F. 5(103)ET-2/56 dated 6th May 1957, according to which the purchase tax shall be payable in case of the declared goods at the last point in the series of sales. It is urged that in tht Punjab General Sales Tax Act the stage at which the purchase tax was to be levied was not prescribed and, therefore, the principle laid down by the Supreme Court in Bhawani Cotton Mills case (supra) does not apply to the present case. Mr. Bhoot, learned counsel for the petitioner M/s. Bhoot Oil Mills Ltd. was not able to convince us how there is a possibility in the present case of the tax being levied at more than one stage. The rate of tax has been prescribed for purchase tax on declared goods and it is clear that the tax cannot be charged on both sale and purchase. The rate of tax prescribed in the present case that is 2% does not exceed the maximum limit fixed by Section 15(a) of Central Act. It has also been made clear that the tax shall be levied only at one stage, and that is the last point in the series of sales. We are not satisfied that in the present case there is a possibility of more persons than one being made liable to pay tax in respect of the same commodity at different stages. The petitioners have nowhere alleged that their goods are being subjected to a double taxation. In other words the petitioners have failed to show that the purchase of the same item of declared goods are made liable for tax in contravention of the provisions of the Central Act according to which there can be only levy and collection of tax at one stage either on sale or on purchase. We therefore overrule this ground of attack also.

21. Now it remains to consider the last point urged by Shri J. P. Jain on behalf of petitioner M/s. Walkar Anjariya and Sons. It is contended that the notice issued under Section 12 of the Act is bad inasmuch as it is based on mere change of opinion. It is, therefore, argued that the Commerce and Taxation Officer had no jurisdiction to pass the order of reassessment In this connection reliance has been placed by the learned counsel on M/s. National Clinic v. Asstt. Commercial Taxes Officer, Sri Ganganagar, 1966 Raj LW 257. On the other hand the learned Additional Advocate General has submitted that the language of Section 12 of the Act, is wide enough to cover any case in which even by mistake, whether of fact or law or by a mere omission, the assessing authority does not assess the whole or a part of the turnover in any particular year. It is contended that for the application of this section it is not necessary that there should be any concealment on the part of the assesses or that any fresh material should be discovered before a re-assessment can be made the learned Additional Advocate General relied on Deputy Commissioner of Commercial Taxes, Madras Division v. K. Kapoorchand Bhandari, (1963) 14 STC 248 (Mad), Standard Refinery Co. v. Sales Tax Commissioner, U. P., (1963) 14 STC 529 (All), Commissioner of Wealth Tax, West Bengal, Calcutta v. Imperial Tobacco Co. of India Ltd., AIR 1967 SC 230 and Anandji Haridas and Co. (P) Ltd. v. S. P. Kasture, AIR 1968 SC 563.

22. We may here state that the validity of the notice under Section 12 of the Act has not been challenged in the writ petition and it was only in the course of arguments that this point was taken. In the second place if the petitioners thought that the impugned notice did not give jurisdiction to the assessing authority to take proceedings for reassessment, the petitioners should have come for a writ of prohibition as soon as the notice was served, and before the order of reassessment was passed. But the assessee took chance and allowed the proceedings for reassessment to be completed. In these circumstances we are not prepared to entertain the objection regarding validity of notice at this stage when the order of reassessment has already been passed and as we are given to understand, the assessee has also filed an appeal from that order, and the same is pending. It is open to the assessee to question the correctness or validity of the order of reassessment in appeal on this ground also. We, therefore, need express no opinion on the question whether the notice under Section 12 is bad and whether the order of reassessment is not sustainable on that account and leave the party to agitate this point in appeal from the reassessment order, if so advised.

23. In the result, we hold that Section 5-A of the Act is neither ultra viresArticles 286, 301 and 304 of the Constitution nor is it in contravention of Section15 of the Central Sales Tax Act. All theWrit Applications are, therefore, dismissed but in the circumstances of thecase we leave the parties to bear theirown costs.


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