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TMI Blog2009 (2) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... . 50 of 2006 declaring 12 items as tax-evasion prone goods and authorising recovery of sales tax in advance on the said commodities on arrival of the same in the State. In other words, the notification authorises recovery of tax at the Boarder Check-post or at the port area through which goods are brought to the business places of the dealers for sale. By a later circular No. 53 of 2006, the Commissioner of Commercial Taxes directed collection of advance tax on purchase value of the notified goods increased by freight and five per cent towards gross profit. Appellants challenged constitutional validity of section 47(16A) and the two circulars issued by the Commissioner on the ground that the same are unconstitutional, illegal and arbitrary. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants, therefore, is that what is authorised under the section is recovery of tax for the notified commodities on any date prior to 10th of the month in which tax is payable under rule 22 of the KVAT Rules. The relevant section is extracted hereunder for easy reference: "47. Procedure for inspection of goods in transit:-(1) . . . (16A) Notwithstanding anything contained in this Act or the Rules made thereunder, the Commissioner may, where he deems it necessary to prevent any evasion of tax, direct that the tax in respect of the sale of any evasion-prone commodities, as may be specified by him, shall be paid before the date prescribed for its payment under this Act." The contention of the appellants that the section does not authorise r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earliest opportunity possible, which is on arrival of goods in the State itself, thereby making evasion of tax for the goods impossible. Therefore, we reject the contention of the appellants that section 47(16A) does not authorise collection of tax before sale. Consequently we hold that the impugned circulars authorising collection of tax in advance prior to sale of the commodities referred to therein are in accordance with the statutory provisions. The next contention raised by the appellants is that if section 47(16A) authorises declaration of evasion-prone goods and collection of tax in advance, i.e., prior to sale of goods, then such provision is unconstitutional. The Special Government Pleader appearing for the respondents conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a new concept and it was there under the Sales Tax Act which was in force for sale of all commodities until the VAT regime came in its place. Further, the Income-tax Act provides for recovery of tax in advance including deduction at source. VAT has its source under entry 54 of List II to the Seventh Schedule to the Constitution of India which authorises the State to levy tax on sale or purchase of goods other than newspaper subject to the provisions of entry 92A of List I. It is the settled position that State's authority to levy tax includes all incidental powers to achieve the object. Admittedly, the appellants are engaged in trading and the goods in respect of which advance tax is collected are goods brought for sale on which tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of tax falls, they are made to pay the tax because for sale of commodity from the beginning to the end of a month, the dealers are allowed to keep the tax until the 10th of the succeeding month when they are required to remit the monthly tax. Since the statute authorises dealers to retain collected tax for up to 40 days, we see no reason why dealers cannot be called upon to pay tax in advance for the commodity brought for sale in the State. It is common knowledge that goods are replenished by traders depending on sales and therefore, they will have no difficulty to adjust the advance tax paid along with monthly tax payable on the 10th of the succeeding month. We, therefore, feel all the hardships expressed by the appellants are imaginary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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