9911796707
TMI Blog1961 (4) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 15 of the Assam Sales Tax Act, 1947, and rule 80 framed under the Act were ultra vires, being a breach of Article 286(2) of the Consti- tution. The High Court granted a certificate under Article 132(1) of the Constitution. R.C. Dey, the answering respondent, is a wholesale dealer in tea, and has been in business since 1949. He registered himself as a dealer under the Assam Sales Tax Act on January 14, 1950. His business consists mainly of buying tea in Assam and selling it either in Assam or in Calcutta. In respect of tea sold in Calcutta, R. C. Dey consigns the tea to himself after purchasing it in Assam. This tea is then approved by prospective purchasers, to whom the documents of title are endorsed on receipt of the price. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby declare that I/We have purchased the goods herein mentioned for the purposes for use in the manufacture of goods for sale in the State, or for use in the execution of a contract in the State or for re-sale in the State, and further declare that these goods have been specified in/our certificate of registration bearing No......in the District of......'" R.C. Dey filed a petition under Article 226 of the Constitution, challenging the amendment and the rule, and contended that they offended against Article 286(2) and Part XIII of the Constitution, and were thus ultra vires. He also submitted that the amendment and the rules were void as offending Article 19(1)(g). The last submission was given up in the High Court, and the objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the original section, anything which was sold for resale was so excluded; but by the amendment, the exclusion was only in respect of the sale of goods for resale in the State. According to the learned Judge, if sales which did not lead to resale in the State were not excluded from the gross turnover, then the net turnover would comprehend such sales and, therefore, there was a taxation of sale of goods in the course of inter-State trade or commerce. Putting it briefly, while the learned Chief justice felt that the amendment and the rule directly affected interstate trade or commerce, Ram Labhaya, J., held that they affected inter-State trade or commerce indirectly, inasmuch as sales outside the State were not excluded from the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct and separate from the sales on which the taxes in question have been imposed. The present levy is not on the sales by the petitioner to persons out- side the State, but on the purchases by him inside the State. The former sales are in the course of inter-State trade, and are not taxable under Article 286(2), but the latter are purely intra-State sales, and tax imposed thereon does not offend Article 286(2)." These observations are entirely applicable in the context of the facts, as are to be found in this appeal. Indeed, all that is necessary to apply the above passage to the facts of this case is to substitute "Assam" in the place of "Orissa." In our opinion, this point must be held to be concluded against the respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation all those transactions which, if they were taxed, would have fallen within the ban of Article 286. The effect of this saying is to make such transactions immune from taxation, and no further amendment of the law in the machinery section was necessary. What section 15 does, is to grant an additional exemption in respect of sales in which the goods, though sold to a registered dealer, are meant for resale in the State itself. It is quite easy to see that unless this exemption was granted, it was possible that there would have been sales tax at more than one point, namely, at the point at which the first registered dealer sold to the second registered dealer and again, when the second registered dealer sold in his turn. To avoid taxat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sales falling within those provisions should be excluded from the net turnover. Reference was made to sub-section (2) of section 3, and it was said that sub-section (2) stated that every dealer to whom sub-section (1) did not apply, shall be liable to be taxed under this Act, and that there was no mention of sub-section (1)A there. No doubt, sub-section (2) does not mention sub-section (1)A; but sub-section (1)A is not rendered ineffective by the omission. Sub-section (1)A speaks of its own force, and has to be given effect to, along with the remaining sub-sections of section 3. Sub-section (1)A has the added support of Article 286, and the Constitution must prevail. Thus, both Article 286 and sub-section (1)A of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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