9911796707
TMI Blog2006 (8) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... A brief reference to the factual aspects would suffice. Appellant filed the writ petition, inter alia, with following stands: Appellant is an agent of principals situated outside the State of Uttar Pradesh, who for the sake of convenience are described as "ex-U.P. principals". Appellant purchased mentha oil for and on behalf of ex-U.P. principals and dispatched them to the said principals on the basis of agreements entered into. One consignment of mentha oil was detained by the Trade Tax Officer, Mobile Squad, Jhansi and the driver was informed by a notice that the detention was made because the appellant had not deducted the tax from the sellers/agriculturists and had not deposited the same in terms of section 8-E of the Act. Appellant sent a reply on July 11, 2001 stating that the purchase of mentha oil was for and on behalf of ex- U.P. principals from the agriculturists and all the documents accompanying the consignment clearly established this fact. When the authority insisted on deposit of the tax in terms of section 8-E of the Act the writ petition was filed. Because similar detentions were made in case of others, writ petitions were filed challenging constitutional valid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any. It was pointed out that the notice issued itself accepted the position that the transaction was an inter-State one. In response, learned counsel for the respondent-State submitted that the High Court has rightly upheld the constitutional validity of section 8-E of the Act. According to him, the High Court should have dismissed the writ petition on the preliminary ground that alternative remedy was available. Coming to the plea of alternative remedy, we find that such a plea does not appear to have been raised by the respondent as there is no discussion in the High Court's judgment in this regard. Further, the constitutional validity of section 8-E issue could not have been decided by the statutory authorities. Be that as it may, we find that the High Court has thoroughly confused the issues. The decisions of this court in Steel Authority of India's case [2000] 3 SCC 200 See [2000] 118 STC 297 (SC). and Nathpa Jhakri's case [2000] 3 SCC 319 related to legislative competence in the matter of deduction of tax under a State statute in respect of an inter-State transaction. The High Court commented upon the correctness of the judgments observing that several larger Bench decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislatures to pass laws of a particular description even if those laws violate the discipline of articles 14 and 19, it seems to us impossible to hold that we should still save article 31C from the challenge of unconstitutionality by reading into that article words which destroy the rationale of that article and an intendment which is plainly contrary to its proclaimed purpose." There is no, and can be none, quarrel to the proposition that if on one construction a given statute will become ultra vires the powers of the Legislature whereas on another construction, which may be open, the statute remains effective and operative, the court will prefer the latter, on the ground that the Legislature is presumed not to have intended an excess of its jurisdiction. But as observed by Holmes J., in Northern Securities Company v. United States 193 US 197, the rule requires that "the statute must be construed in such a way as not merely to save its constitutionality but so far as it is consistent with fair interpretation, not to raise grave doubts on that score". The rule does not apply when the offending words have only one meaning, e.g., when the restricted meaning makes them useless or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Sales Tax Act, 1956. The value of goods involved in the execution of a works contract has to be determined after making these exclusions from the value of the works contract. . . . . . . 13. There can be no doubt, upon a plain interpretation of section 13AA, that it is enacted for the purposes of deduction at source of the State sales tax that is payable by a contractor on the value of a works contract. For the purposes of the deduction neither the owner nor the Commissioner who issues to the contractor a certificate under section 13AA(5) is entitled to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. The owner is required by section 13AA(1) to deposit towards the contractor's liability to State sales tax four per cent of such amount as he credits or pays to the contractor, regardless of the fact that the value of the works contract includes the value of inter-State sales, outside sales or sales in the course of import. There is, in our view, therefore, no doubt that the provisions of section 13AA are beyond the powers of the State Legislature f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 2002 See [2000] 118 STC 297 (SC). and Nathpa Jhakri's case [2000] 3 SCC 319 shall apply. Section 8-E, therefore, cannot be held applicable to inter-State transactions. (2) The question whether the appellant has any liability to pay purchase tax shall not be dealt with in the proceedings relating to which the notice was issued on July 8, 2001 and the reply was filed on July 11, 2001. (3) It will be for the appellant to establish that the transaction in question was of inter-State character. (4) The appellant shall be given opportunity to file further reply and place such materials as according to it are relevant before the concerned authority within four weeks from today. (5) Considering the reply and further reply and materials to be placed for consideration by the appellant, the concerned trade tax authority shall decide the issue in accordance with law. Before we part with the case, it would be appropriate to remind the Legislatures of what was stated in Bhawani Cotton Mill's case AIR 1967 SC 1616 See [1967] 20 STC 290 (SC). that if a person is not liable for payment of tax at all, at any time, the collection of a tax from him, with a possible contingency of refund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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