1961 (1) TMI 68 - HC - VAT and Sales Tax

Summary

Issues:
Validity of assessment and levy of sales tax on certain commodities after April 1, 1956 under the Rajasthan Sales Tax Act, 1954 and its amendments.

Detailed Analysis:

The judgment of the Court addressed the question of the validity of the assessment and levy of sales tax on specific commodities after April 1, 1956, under the Rajasthan Sales Tax Act, 1954. The commodities in question included gur, cloth, petroleum, and petroleum products. The Court referred to the provisions of the Rajasthan Sales Tax Act, 1954, and its amendment in 1956, along with relevant Articles of the Constitution, particularly Article 286(3). This Article specified that taxes on goods declared essential by Parliament required the President's assent for state legislation to be effective. The Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952, had declared the mentioned commodities as essential. The Rajasthan Sales Tax Act, 1954, received the President's assent and empowered the State Legislature to levy taxes on these goods.

The original Section 28 of the Rajasthan Sales Tax Act, 1954, specified the duration of the application of its provisions concerning essential commodities until March 31, 1956. However, the Rajasthan Sales Tax (Amendment) Act, 1956, amended this by substituting "1957" for "1956" without the President's assent. The Validation Act of 1958 validated taxes levied on essential goods between April 1, 1956, and January 5, 1957, despite any defects in the process. The dispute centered on the validity of the 1956 amendment without the President's assent. The Court rejected the argument that the Validation Act only validated the levy of taxes and not the amendment itself, emphasizing that the term "levy" encompasses both imposition and collection of taxes.

The Court concluded that the Validation Act effectively cured any defects, including the lack of the President's assent to the 1956 amendment. The Validation Act validated both the imposition and levy of taxes under the Rajasthan Sales Tax Act, thereby rendering the taxes validly and lawfully levied. The Court dismissed the applications challenging the tax assessment and levy, finding no merit in the arguments presented by the petitioners.