2005 (8) TMI 366 - SC - VAT and Sales Tax

Supreme Court Upholds Assam Sales Tax Act Sections

The Supreme Court upheld the validity of sections 42, 44, and 46A of the Assam General Sales Tax Act, 1993, along with rule 21A, dismissing the civil ... Whether the provisions of the Assam General Sales Tax Act, 1993 are similar to the provisions of the Haryana General Sales Tax Act, 1973 or they are similar to the provisions of the Tripura Sales Tax Act, 1976? Whether the provisions contained in section 42 requiring the transporters to furnish to the prescribed authority true and complete particulars and information and to maintain true and complete accounts, registers and documents in respect thereof and provisions contained in section 44 empowering the appointed authority to search any office, godown, etc., of transporters and seize any goods found therein can sustain in law? Whether the authority can direct a transporter to comply with the requirements of section 42 for period prior to the enactment coming into force? Held that:- Appeal dismissed. Sections 42 and 44 of the Act do not impose any liability upon the transporter, carriers, etc., to pay any sales tax under the Act. The said sections are basically meant to check the tax evasion. Thus the requirement of maintenance of document and the certificate of registration by a transporter or any such agent is only for similar purpose as incorporated under sections 36A and 38B of the Tripura Sales Tax Act, 1976 which has been held to be a valid piece of legislation. The Assam Act is completely distinguishable from the Haryana Act. There is a marked difference between the provisions of Haryana and Tripura Laws inasmuch as section 38 of the Haryana General Sales Tax Act, 1973 does not clearly define the person dealing with 'documents of title to goods'. Further, this Court declared the provisions of section 38 of the Haryana General Sales Act to be ultra vires primarily on the ground that the transporters/carriers were specifically excluded from the definition of 'person transporting goods' in the Explanation appended to section 38 of the Act. The insertion of section 46A and rule 21A has in no way infringed the fundamental rights of the petitioners as the inserted provisions are analogous to those of section 38B of the Tripura Sales Tax Act, 1976 which have since been upheld by this Court. The State Legislature has the jurisdiction and competence under entry 54 of List II of the Seventh Schedule to the Constitution of India to legislate such provisions as contained in section 46A of the Act, 1993. Issues Involved:1. Similarity of the Assam General Sales Tax Act, 1993 with the Haryana General Sales Tax Act, 1973 or the Tripura Sales Tax Act, 1976.2. Legality of sections 42 and 44 of the Assam General Sales Tax Act, 1993.3. Retrospective application of section 42 of the Assam General Sales Tax Act, 1993.4. Validity of section 46A and rule 21A of the Assam General Sales Tax Act, 1993.Detailed Analysis:1. Similarity of the Assam General Sales Tax Act, 1993 with the Haryana General Sales Tax Act, 1973 or the Tripura Sales Tax Act, 1976:The court examined whether the provisions of the Assam General Sales Tax Act, 1993 are more akin to those of the Haryana General Sales Tax Act, 1973 or the Tripura Sales Tax Act, 1976. The court concluded that the Assam Act is analogous to the Tripura Sales Tax Act and not similar to the Haryana General Sales Tax Act. The Tripura Act clearly defines the expressions 'dealer' and 'documents of title to goods,' unlike the Haryana Act, which had ambiguities leading to its provisions being struck down.2. Legality of sections 42 and 44 of the Assam General Sales Tax Act, 1993:The court upheld the validity of sections 42 and 44 of the Assam General Sales Tax Act, 1993, stating that these sections are preventive measures against tax evasion. Section 42 imposes an obligation on transporters to maintain and furnish true and complete accounts, registers, and documents. Section 44 empowers authorities to search and seize goods and documents if they suspect tax evasion. The court found these provisions to be intra vires the Constitution and necessary for achieving the object of the tax statute.3. Retrospective application of section 42 of the Assam General Sales Tax Act, 1993:The court addressed whether the authority could direct a transporter to comply with the requirements of section 42 for a period prior to the enactment coming into force. It was concluded that the provisions of sections 42 and 44 are prospective in nature. The court agreed with the division Bench of the Gauhati High Court that the case is covered by the decision in Tripura Goods Transport Association v. Commissioner of Taxes, which upheld similar provisions under the Tripura Sales Tax Act.4. Validity of section 46A and rule 21A of the Assam General Sales Tax Act, 1993:The court examined the insertion of section 46A and rule 21A, which require every transporter, carrier, or transporting agent operating in Assam to obtain a certificate of registration. The court held that these provisions are analogous to section 38B of the Tripura Sales Tax Act, which had been upheld by the Supreme Court. The court found that section 46A and rule 21A are valid pieces of legislation aimed at preventing tax evasion and do not infringe upon the fundamental rights of the petitioners. The State Legislature has the jurisdiction and competence under entry 54 of List II of the Seventh Schedule to legislate such provisions.Conclusion:The Supreme Court dismissed the civil appeal and the writ petition, upholding the validity of sections 42, 44, and 46A of the Assam General Sales Tax Act, 1993, along with rule 21A. The court found that these provisions are necessary preventive measures against tax evasion and are within the legislative competence of the State Legislature. No costs were awarded.