TMI Blog1950 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-1950, as immediately before the commencement of the Constitution no sales tax was levied in the State of Vindhya Pra- desh. He wants that this Court should make a declaration to that effect, and consequentially issue a direction of the nature of mandamus and prohibition calling upon the opposite party not to levy any sales tax on the goods sold and immediately exported for consumption outside the State. The opposite party, having entered appearance, have advanced the three-fold argument against the issue of any writ or direction. Firstly, the opposite party alleges that the application is one not in good faith as the applicant is trying to dodge payment of sales tax even on goods sold for consumption within the Vindhya Pradesh, upon whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribing as sales for export ones for consumption within the State. It is clearly understood that the dis- cussion in this case is restricted only to the sales for export, in other words, where the thing is ordered from outside the Vindhya Pradesh and is despatched there, or is purchased and immediately exported with the assistance and the knowledge of the vendor. It is entirely open to the Sales Tax Authorities to take all precautions against false descrip- tion and tax dodging. They can call upon the assessee to pay the sales tax on all sales, subject to his satisfying the authorities that so much of the sale was exported, and claiming refund of the corresponding portion of the tax. It would be for the assessee to prove that so much of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a roundabout way under the Ordinance. Either way, the High Court is to have the last say on the legality or otherwise of the impost; the procedure under Article 226 of the Constitution is much simpler and quicker. Point No.3-Coming to the main point in issue the question is whether the customs duty that was being levied till 31st March, 1950, was really a sales tax in the sense it is used in Section 2 of the Presi- dent's C.O. No.7, so that it can continue to be levied until 31st March, 1951. Article 286 of the Constitution envisages three classes of sales. Firstly, sales within the same State, that is to say, the commodity is purchased and consumed within the same State. This being a state subject (Item 54, List 2, Sch. 7), and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes to continue levying sales tax on inter-State commerce also, till 31st March, 1951. The essential condition for applying this Order is the actual levy of sales tax, as such, on these commodities. In the Vindhya Pradesh the position is the following: On 10th January, 1949, the then Rajpramukh of the United State of Vindhya Pradesh promulgated an Ordinance No.II of 1949 and published it in the Vindhya Pradesh Gazette on January, 1949, to enable the levying of sales tax in the State. It was to extend to such areas as may be notified by the State Government in the Government Gazette. Accord- ingly, on 28th March, 1950, the Chief Commissioner ordered that the Ordinance shall apply to the whole of the Vindhya Pradesh with effect from 1st Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, when it changes location. So, it is fallacious to argue that the customs duty levied in the Vindhya Pradesh on 25th January, 1950, is identical with the sales tax referred to in the President's C.O. No. 7. In the result, since no sales tax was actually levied on articles exported from the Vindhya Pradesh on 25th January, 1950, imposition of the sales tax on articles exported from the Vindhya Pradesh territory is illegal. I, therefore, order that the second party cannot legally levy any sales tax on articles purchased within Vindhya Pradesh and exported for consumption outside, and I direct them not to levy the same. The second party, however, is entitled to take all administrative precautions to stop evasion under false description of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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