TMI Blog2011 (5) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... l or can be challenged on the ground of having been issued arbitrarily. Appeal dismissed. - Writ Petition (C) No. 4988 of 2007 - - - Dated:- 24-5-2011 - MADAN B. LOKUR C.J. AND MERUNO K., J. JUDGMENT 1 The judgment of the court was delivered by MADAN B. LOKUR C.J. The challenge in this writ petition is to section 17 of the Assam Value Added Tax Act, 2003 (for short, the Act ) and the notification dated April 5, 2007. Section 17 of the Act reads as follows: 17. Powers of Government to amend Schedules. The Government may, by notification in the Official Gazette, add to or omit from any Schedule any entry or entries or transpose any entry or part of entry from one Schedule to another or vary any entry or entries or the rate or rates or the point or points of levy or otherwise amend or modify any Schedule, prospectively or retrospectively, and thereupon the Schedule shall be deemed to have been amended accordingly: Provided that the Government shall not vary the rate of tax so as to enhance it, any case, exceeding forty paise in a rupee. A bare reading of the aforesaid section would show that it enables the Government by a notification in the official gaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 4 GLR 783. In that case, the challenge was to section 3(4) of the Assam Entry Tax Act, 2001. That provision reads as follows: 3. Levy of tax: (1) to (3) . . . (4) The State Government may, by notification in the Official Gazette, add to, amend or otherwise modify the said Schedule and also may vary the rates of tax of the goods specified in the Schedule and thereupon the said Schedule shall be deemed to have been amended accordingly. A bare perusal of section 3(4) of the Assam Entry Tax Act, 2001 shows that, in substance, it is more or less similar to section 17 of the Act and even learned counsel for the petitioners does not dispute this. In Chhotabhai Jethabhai Patel [2008] 15 VST 70 (Gauhati); [2009] 4 GLR 783, the argument of learned counsel for the respondents was that since there was no definite legislative policy or necessary guidelines for the exer cise of power by the delegate, section 3(4) of the Assam Entry Tax Act should be struck down as unconstitutional. The Division Bench negatived this challenge and held that the preamble and the objects and reasons of the Assam Entry Tax Act gave sufficient guidance to the State for issuing a notification under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles, as many bulk customers such as tea companies, oil companies, etc., by taking recourse to inter-State purchase of several items, required for their own consumption, for availing of lower rate of tax under the Central Sales Tax Act, deprives the State of a substantial amount of revenue. Another reason for such enactment, as reflected in the Statement of Objects and Reasons, is that the State is losing revenue as motor vehicles are purchased outside the State and then brought into the State for use, due to disparity in the rate of tax in different States. Section 3 of the principal Act provides for levy of tax, without, however, any stipulation relating to the upper limit of the tax to be levied. Sub-section (4) of section 3, prior to the Second Amendment Act, 2005, authorizes the State Government to add to, delete, amend or otherwise modify the Schedule of the Act and also to vary the rate of tax (which is under challenge in the present batch of writ petitions on the ground of excessive delegation of legislative function). Section 4(1) additionally provides for imposition of tax on motor vehicles brought into a local area by any importer, which are liable for registration or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh [1980] 45 STC 36 (SC); [1980] 1 SCC 223, paragraph 41) 42. The same judicial wariness was expressed in Federation of Hotel Restaurant Association of India v. Union of India [1989] 74 STC 102 (SC); [1989] 178 ITR 97 (SC); [1989] 3 SCC 634, 658 where it was said (pages 126 and 127 in 74 STC): '21. It is now well-settled that though taxing laws are not outside article 14, however, having regard to the wide variety of diverse economic criteria that go into the formulation of a fiscal policy, the Legislature enjoys a wide latitude in the matter of selection of persons, subject-matter, events, etc., for taxation . . . Decisions of this court on the matter have permitted the Legislatures to exercise an extremely wide discretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes.' (emphasis1 supplied) In our case, tobacco was initially exempted from the purview of tax, but for generating revenues, the State Government decided to tax tobacco . It is under these circumstances that the notification dated April 5, 2007 was issued by the State Government bringing tobacco within th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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