2004 (2) TMI 341 - SUPREME COURT

Whether the High Court was right in holding that the clearing agent had no proximate connection with the transaction of sale and purchase of goods or with the evasion of tax by the dealer and consequently the impugned provisions of sections 57, 58 and 59 were beyond the legislative competence of the State Legislature under entry 54 of List II of the Seventh Schedule to the Constitution of India?

Held that:- Appeal allowed. We uphold the validity of the impugned provisions of sections 57, 58 and 59 of the Act as intra vires entry 54 of List II of the Seventh Schedule to the Constitution of India & hold that the impugned sections 57 and 58 of the M.P. Commercial Tax Act, 1994 have been enacted by the State Legislature under the powers incidental to the power to levy tax on sale and purchase of goods under entry 54, List II of the Seventh Schedule to the Constitution of India.