TMI Blog2006 (1) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment orders under the State Act as also the Central Act and raising of consequent demands for payment of taxes under the two enactments. Aggrieved, the petitioners have assailed the said orders of reassessment apart from challenging the vires of notification dated March 31, 2000, whereby pan masala and gutka were included as goods chargeable to tax under section 4(1)(a) of the Act. 3.. We have heard learned counsel for the parties and perused the record. 4.. Appearing for the petitioners, Mr. Gaur made a two-fold submission in support of the challenge mounted in the petition. Firstly, it was contended on the authority of the judgment of the Supreme Court in Kothari Products Ltd. v. Government of Andhra Pradesh [2000] 119 STC 553; (2000) 9 SCC 263 that since gutka and tobacco are covered under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the same were exempt from payment of any sales tax. Secondly, it was argued that additional excise duty payable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 being in lieu of sales tax, the levy of sales tax by the inclusion of gutka in the First Schedule to the Act was unconstituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 66 STC 1, Sales Tax Officer, Sector IX, Kanpur v. Darling Dairy Products [1994] 94 STC 93, State of Bihar v. Krishna Kumar Kabra [1998] 108 STC 1 and Reliance Trading Company v. State of Kerala [2000] 119 STC 321 (Ker) this Court held that it is open to the State to withdraw a general exemption by inclusion of entry in the Schedule enumerating goods the sale whereof would attract a tax. The ratio of the decision rendered by the Supreme Court in Kothari Products' [2000] 119 STC 553; (2000) 9 SCC 263 was distinguished, keeping in view the provisions of the Delhi Sales Tax Act, 1975. Sitting in a co-ordinate jurisdiction, the said decision is binding on us, especially when the ground urged before us is the same as has already been examined and repelled, by this Court. Even otherwise, the argument advanced before us on behalf of the petitioners rests entirely on the decision of the Supreme Court in Kothari Products' case [2001] 119 STC 553; (2000) 9 SCC 263, in which case the petitioner had challenged introduction of entry 194 in the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. That entry sought to tax pan masala including gutka. The contention advanced before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise (Goods of Special Importance) Act, 1957 (58 of 1957) does not leave any room for levying any sales tax on such of the goods as are exigible to such excise duty. The Statement of Objects and Reasons of Act 58 of 1957 runs thus: "The object of the Bill is to impose additional duties of excise in replacement of the sales taxes levied by the Union and States on sugar, tobacco and mill-made textiles and to distribute the net proceeds of these taxes, except the proceeds attributable to Union territories, to the States. The distribution of proceeds of the additional duties broadly follows the pattern recommended by the Second Finance Commission. Provision has been made that the States which levy a tax on the sale or purchase of these commodities after April 1, 1958, do not participate in the distribution of the net proceeds. Provision is also being made in the Bill for including these three goods in the category of goods declared to be of special importance in inter-State trade or commerce so that, following the imposition of uniform duties of excise on them, the rates of sales tax, if levied by any State are subject from April 1, 1958, to the restrictions in section 15 of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the scheduled commodities. Parliament has also provided the consequence that follows if any State levies tax on sale or purchase of scheduled commodities; all that happens is that the State will be deprived of its share in the proceeds of additional duties of excise for that financial year. Even this is subject to the power of the Central Government to direct otherwise, and Parliament could not, and did not, prohibit any State from making any law or levying any tax which a State can levy by virtue of the entries in List II." 12.. In the face of the above, there is no gainsaying that the levy of additional excise duties in the category of goods declared to be of special importance in inter-State trade or commerce, did not prevent the State Legislatures from levying a sales tax in respect of the very same commodities subject to the restrictions contained in the Central Act. All that the levy of any such sales tax would mean is that the additional excise duty levied on such commodities by the Central Government will not be distributed among such of the States as had levied such a sales tax. That, however, is a matter concerning distribution of the proceeds of additional duties, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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