TMI Blog1971 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify." Sections 14 and 15 of the Central Sales Tax Act deal with the matters covered in article 286(3) of the Constitution. Section 14 of the Central Sales Tax Act declares certain goods, including oil-seeds, as of special importance in inter-State trade or commerce. Section 15 then provides: "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 and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent. of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b).............................................................." The effect of this provision is that the State law cannot impose a sale or purchase tax on the sales inside the State at a rate higher than 2 per cent. of the sale or purchase price and that it cannot be levied at more than one stage. 3.. The con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed for those goods. The apparent effect of this amendment is that there is no longer any mention as to the stage at which the tax is to be levied. 6.. Along with the amendment of section 6 and the Second Schedule, section 2(r), which defines "taxable turnover", was also amended. Section 2(r) reads as under: "2. (r) 'Taxable turnover' in relation to any period means that part of a dealer's turnover for such period which remains after deducting therefrom- (i) the sale price of goods declared tax-free under section 10 or section 12; (ii) the sale price of goods other than those mentioned in sub-clauses (i) and (iv) of this clause, which have been purchased otherwise than in the course of inter-State trade or commerce from a registered dealer; (iii) all such other deductions as may be prescribed; (iv) sales to a registered dealer of goods specified in Part I of Schedule II and declared by him in the prescribed form as being intended for resale by him in the State of Madhya Pradesh or for sale in the course of inter-State trade or commerce." Relying on sub-clause (iv) of section 2(r) it is submitted on behalf of the State that so far as the declared goods are concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in respect of which he is liable to pay tax." The argument of the counsel for the State of Punjab that if a dealer wanted to claim exemption under sub-clause (vi) of section 5(2)(a), rule 27-A provided for his getting a declaration from the dealer to whom the goods were resold, in which case the dealer was absolved from liability to pay tax, was not accepted. Their Lordships observed: "We have gone through the various statements contained in the said rule, as well as the forms, to which it refers, but they are not decisive, either way. There will also be cases where a non-registered dealer may have intervened and even if such dealer intervened, it is clear that under section 15(a) of the Central Act the tax cannot be levied at more than one stage. There is no machinery by which a dealer can ascertain whether his vendor of the declared goods has paid the tax already. Even otherwise, it will be seen that if a dealer, A, sells the declared goods to B, six months after the close of the year (B being a registered dealer), A becomes liable to purchase tax. But, if B sells the identical declared goods, again, after the period mentioned in subclause (vi), he will also be liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... becomes liable for paying the sales tax. The element of tax would, therefore, be added by the registered dealer in his sale price. Now, a dealer, who is unregistered, unless he sells the goods to another registered dealer, at a loss, he will have to sell them at a higher price than at which the registered dealer would have purchased from another registered dealer. The possibility of the goods being purchased by registered dealers from unregistered dealers is altogether remote, at least in the case of trading communities. In the case of the Punjab Act their Lordships had found, as a fact, that if the goods were not sold for a certain period, both the registered dealers could be made liable to purchase tax. That appears to be the main ground for holding that the Punjab Act was ultra vires of the provisions of section 15(a) of the Central Sales Tax Act. That is not the case here. 9.. On behalf of the State, we were referred to a decision of the Rajasthan High Court in Walkar Anjaria Sons Pvt. Ltd. v. The State of Rajasthan[1969] 23 S.T.C. 74., wherein reliance was placed by the assessee on the decision of their Lordships of the Supreme Court in Bhawani Cotton Mills Ltd. v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax despite the fact that only a single point purchase tax is leviable under the Act. It was further urged that we should not read into item 6 of the Third Schedule the word 'first' before the word 'miller' under column 2 thereof. We see no merit in these contentions. Quite clearly in view of section 14 and section 15 of the Central Sales Tax Act and section 6 of the Act, purchase of groundnut can be taxed only at one stage. Once a particular quantity of groundnut has been subjected to payment of tax, the State's power to tax in respect of those goods gets exhausted and any further dealing in those goods cannot be brought to tax. This is clear from the scheme of the Act. There was no need for the Legislature to say 'when purchased by first miller' in column 2 of item 6 of the Third Schedule, because from the language employed therein, it is clear that the first purchase becomes exigible to tax and in view of section 6 of the Act, the subsequent purchases of the same goods cannot be subjected to tax. Therefore there is no question of adding any word into that item, as contended by Mr. M.C. Chagla on behalf of the assessees." (pages 652-653) The situation so far as the M.P. Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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