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of <h1>Supreme Court Validates Provisions of West Bengal Sales Tax Act, Upholding Key Sections and Rules</h1> <h3>State of West Bengal and another Versus EITA India Limited and others (and other appeals)</h3> State of West Bengal and another Versus EITA India Limited and others (and other appeals) - [2003] 131 STC 111 (SC), 2003 (5) SCC 239 Issues Involved:1. Constitutional validity of Section 2(6) of the West Bengal Sales Tax Act, 1994.2. Constitutional validity of the Explanation to sub-section (1), sub-sections (5), (7), (8), (10), (11), and (12) of Section 11 of the West Bengal Sales Tax Act, 1994.3. Constitutional validity of sub-section (4) of Section 14 of the West Bengal Sales Tax Act, 1994.4. Constitutional validity of Rules 172, 173, 174, 188, and 189 of the West Bengal Sales Tax Rules, 1994.Detailed Analysis:1. Constitutional Validity of Section 2(6):The Tribunal upheld the constitutional validity of Section 2(6), which defines 'casual trader' but suspended the requirement for transporters to disclose the name and address of the consignor or consignee until a manner of disclosure is prescribed. The Supreme Court found this suspension unjustified, noting that every prudent transporter should know the particulars of the consignor and consignee and possess relevant documents. The Court reiterated that no special pro forma or machinery is required to effectuate Section 2(6), and thus, the Tribunal's suspension of this provision was uncalled for and illegal.2. Constitutional Validity of Section 11:The Supreme Court examined the various subsections of Section 11, which deals with the liability of a casual trader to pay tax on sales in West Bengal. The Court upheld the Explanation to sub-section (1), which creates a rebuttable presumption that disposal of goods by a transporter or warehouse owner is deemed a sale unless proven otherwise. This presumption was deemed a normal legislative practice and not an extension of the definition of 'sale' under Article 366(29A) of the Constitution.Sub-sections (5), (7), and (8) were found to be part of a scheme to prevent tax evasion, requiring transporters to produce documents and possibly pay an amount in advance equivalent to the tax due. The Court held these provisions valid, noting that the State Legislature has the power to enact measures to prevent tax evasion under Entry 54 of List II of the Seventh Schedule of the Constitution. Consequently, sub-sections (10) and (12), which are consequential to sub-sections (5), (7), and (8), were also upheld.3. Constitutional Validity of Section 14(4):Section 14 deals with the liability of a casual trader to pay tax on purchases in West Bengal. Sub-section (4) requires persons transporting goods to produce documents and allows the detention of vehicles for assessment and recovery of tax. The Supreme Court upheld this provision, viewing it as an anti-evasion measure similar to those in the Bengal Finance (Sales Tax) Act, 1941, which had been previously upheld.4. Constitutional Validity of Rules 172, 173, 174, 188, and 189:No separate arguments were addressed regarding the invalidity of these rules. Given the Court's decision to uphold the provisions of the Act, the impugned rules and forms (28 and 31) were also upheld. The orders of the Tribunal declaring these rules invalid were set aside.Conclusion:The Supreme Court set aside the orders of the Tribunal and upheld the constitutional validity of the impugned provisions and rules of the West Bengal Sales Tax Act, 1994. The civil appeals were allowed with no order as to costs.
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