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2015 (9) TMI 1274 - HC - VAT and Sales TaxLevy of VAT on MRP - deduction of discount - Levy of VAT on supply of medicines free of costs - manufacture and sale of medicines - validity of the provisions contained in Section 15(5) of the Bihar Value Added Tax Act, 2005 - Held that:- providing for measure of tax on the subject of tax by substituting any notional value like the MRP or otherwise, is beyond the legislative competence of the State legislature. - Decision in the case of State of Rajasthan & Anr. Vs. Rajasthan Chemist Association: [2006 (7) TMI 17 - SUPREME COURT OF INDIA] followed. The State Legislature not being competent to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned. The matter goes to the root of the competence of the State Legislature under the Constitution to frame any such enactment and if it is not competent to enact such a measure then it is equally not competent to do the same by way of providing option for levy of tax upon the dealer in such matter. Thus, in the light of the aforesaid discussion Sub-section (5) of Section 15 of the Bihar Value Added Tax, 2005 is declared ultra vires. Consequently, the impugned orders passed by the Commissioner in the revision application as also by the Assessing authority in accordance with the same cannot be sustained and, are accordingly, quashed. - Decided in favor of assessee.
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