Discriminatory sales tax on imported goods struck down for unguided discretion and constitutional inequality.

Section 29 of the Assam Sales Tax Act, 1947 was held void because it singled out dealers selling goods obtained from outside the Province, imposed a discriminatory tax burden, and left registration to the Commissioner's unguided discretion, contrary to constitutional guarantees of equality and non-discrimination. A requisition under that provision had to be in writing; an oral direction was insufficient. The assessees were not validly liable for the disputed assessment periods on the footing of section 29 or section 3(2), and the Gauhati Sales Tax Superintendent had jurisdiction on the facts. Section 52(2)(i) and rule 74 were upheld as intra vires, and revision fee was payable under rule 74(d), not clause (a).

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Issues: (i) whether section 29 of the Assam Sales Tax Act, 1947 was ultra vires for discriminating against dealers selling goods obtained from outside the Province and for conferring unguided discretion on the Commissioner; (ii) whether a requisition to register under section 29 had to be made in writing; (iii) whether the assessees were liable to assessment for the relevant period under section 29 or section 3(2), and whether the proviso to section 29 restricted liability; (iv) whether the Gauhati Sales Tax Superintendent had jurisdiction to assess the assessees; (v) whether section 52(2)(i) of the Assam Sales Tax Act, 1947 and rule 74 of the Assam Sales Tax Rules were ultra vires; and (vi) under which clause of rule 74 the revision fee was payable.

Issue (i): whether section 29 of the Assam Sales Tax Act, 1947 was ultra vires for discriminating against dealers selling goods obtained from outside the Province and for conferring unguided discretion on the Commissioner.

Analysis: Section 29 applied only to dealers not ordinarily liable to registration who sold goods obtained from outside the State, and made their liability to registration and tax depend on a requirement by the Commissioner. The provision operated as a tax burden on imported goods as against similar locally produced goods, thereby attracting the constitutional prohibitions against discriminatory taxation under section 297(1)(b) of the Government of India Act, 1935 and Article 304(a) of the Constitution of India. It also conferred no objective standard or guiding principle for the Commissioner's selection of dealers, leaving an arbitrary and discriminatory discretion inconsistent with Article 14 of the Constitution of India.

Conclusion: section 29 was ultra vires and void.

Issue (ii): whether a requisition to register under section 29 had to be made in writing.

Analysis: The liability under section 29 arose only when a dealer was required by the Commissioner to register. Because such a requisition determined the dealer's liability to registration and tax, and because the dealer had to know the basis and legality of the demand in order to contest it, the requirement could not be left to an oral direction. The statutory language was treated as implying a written requisition as a condition precedent to valid action under the provision.

Conclusion: a written requisition was necessary, and an oral requisition was insufficient.

Issue (iii): whether the assessees were liable to assessment for the relevant period under section 29 or section 3(2), and whether the proviso to section 29 restricted liability.

Analysis: On the assessees' own stated accounting basis, their year ran from 1 January to 31 December, and the proviso to section 29 excluded tax on sales occurring before the year during which liability to registration arose. Even apart from section 29, the assessees fell within section 3(2), under which liability arose only from the prescribed future date after the relevant accounting year in which the taxable quantum was first reached. On either footing, the assessments made for the disputed earlier periods were not supportable.

Conclusion: the assessees were not validly liable for the assessments made for the periods in question.

Issue (iv): whether the Gauhati Sales Tax Superintendent had jurisdiction to assess the assessees.

Analysis: Rule 78 was treated as directory and framed for administrative convenience. The record showed that the Gauhati office was the operative place of business during the relevant stage, while the Dibrugarh office had been closed. The officer who acted at Gauhati was duly empowered under the Act, and no jurisdictional defect was made out on the facts.

Conclusion: the Gauhati Sales Tax Superintendent had jurisdiction.

Issue (v): whether section 52(2)(i) of the Assam Sales Tax Act, 1947 and rule 74 of the Assam Sales Tax Rules were ultra vires.

Analysis: The Legislature had validly created the assessment, appeal, and revision framework and could delegate ancillary fee-making powers. The impugned provision and rule were treated as part of a permissible regulatory scheme and not as an impermissible delegation of essential legislative function.

Conclusion: section 52(2)(i) and rule 74 were intra vires.

Issue (vi): under which clause of rule 74 the revision fee was payable.

Analysis: The revision petition was directed against an appellate order that had not itself finally affirmed the assessment but had ordered fresh consideration. It was therefore not a revision of an order of assessment within clause (a), but a revision of another order within the residuary clause (d). In any event, where two views were possible, the construction favourable to the assessee was to be preferred.

Conclusion: the fee was payable under clause (d) of rule 74, not clause (a).

Final Conclusion: the reference was answered substantially in favour of the assessees, the impugned assessments were held unauthorized, and consequential relief including costs and refund of excess fee followed.

Ratio Decidendi: a taxing provision that singles out dealers dealing in imported goods, without objective standards for selection and with power to impose liability only at the Commissioner's discretion, is discriminatory and void for violating constitutional equality and non-discrimination guarantees.

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