TMI Blog1994 (11) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause additional excise duty is payable would not be beyond the taxing net. - Civil Appeal No. 2336 of 1994, C.A. Nos. 2317, 2319, 2337, 2338, 2339, 5742, 6295, 6296, 6297, 6298, 6299, 6300, 6301 of 1994 - - - Dated:- 25-11-1994 - KULDIP SINGH AND SAHAI R.M. AND HANSARIA B.L. JJ. S.B. Wad, H.N. Salve, A.K. Sen, S.K. Dholakia and G.L. Sanghi, Senior Advocates (Ashish Wad, Mrs. J.S. Wad, Ms. Meenakhsi Arora, R. Santhanam, C.S.S. Rao, K.J. John, Sushil Kr. Jain, A.S. Bhasme, T.C. Sharma, S.K. Agnihotri, Sakesh Kumar and Ashok K. Singh, Advocates, with them), for the appearing parties. -------------------------------------------------- The judgment of the Court was delivered by R.M. SAHAI, J.- The question that ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial or in the execution of works contracts but not for sale therein; and such tax shall be paid by every dealer liable to tax under the Sales Tax Act who has effected entry of such goods Provided ........................" The levy was described in substance to be purchase tax leviable under the Sales Tax Act. But it appears to have been prompted by the latter part of the section which identifies the person who shall be responsible for paying the tax. The section is in two parts-one, levying the tax and other fixing the person from whom it shall be realised. The latter is more a part of machinery provision. It cannot control the main or the substantive part of the section. The taxable event is the entry of goods in a local area of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional excise duty is leviable. Therefore, no sales tax can be levied on it. Consequently, the dealer being not liable to pay tax on such goods no entry tax could be levied on it. A bare reading of the section indicates that the tax is attracted under this section if the following conditions are satisfied: (a) Entry of goods specified in Schedule II. (b) The goods are brought in course of business by a dealer. (c) The goods have been purchased outside the State but they have been brought inside the State in a local area. (d) For consumption, use or sale. Liability to pay sales tax on the goods specified in Schedule II is thus not an essential ingredient of levy. The expression "liable to tax" has been used to identify the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is specified in Schedule II. The tax being on entry of goods the taxing event was complete once sugar was brought into the local area by a dealer in course of business for consumption, use or sale therein. This could not be diluted or negatived by subjecting it to another condition that such goods should have been liable to tax under the Sales Tax Act. That would be misreading of section 3. The charge or incidence of tax is different from realisation of it. A levy may be valid and good and yet it may remain ineffective if there is no machinery provision. But the provision for realisation of tax from the dealer who effects the entry of goods does not make it a condition for the levy of tax. Tax under section 3 is on bringing of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectly or indirectly the levy cannot be impugned as invalid. The stand of the State that the revenue earned is being made over to the local bodies to compensate them for the loss caused, makes the impost compensatory in nature, as augmentation of their finance would enable them to provide municipal services more efficiently, which would help or ease free-flow of trade and commerce, because of which the impost has to be regarded as compensatory in nature, in view of what has been stated in the aforesaid decisions, more particularly in Hansa Corporation's case [1981] 1 SCR 823; AIR 1981 SC 463. In the result, these appeals fail and are dismissed. But there shall be no order as to costs. Appeals dismissed. - - TaxTMI - TMITax - CST ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
