TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether section 18A of the Bombay Sales Tax Act was within legislative competence insofar as it subjected stock of goods remaining unsold on cancellation of registration to tax; (ii) Whether section 18A could be applied to plant, machinery and laboratory apparatus forming part of the dealer's assets.
Issue (i): Whether section 18A of the Bombay Sales Tax Act was within legislative competence insofar as it subjected stock of goods remaining unsold on cancellation of registration to tax.
Analysis: The provision was construed as operating on goods previously purchased for resale or for use in manufacture or processing of goods for sale, where no tax had been levied at the earlier point of sale because of the exemption certificate. On that construction, the levy did not create a tax on assets, but postponed the taxation of the sale until the contingency of cancellation of registration and continued retention of unsold stock arose.
Conclusion: Section 18A was intra vires to the extent it applied to such stock of goods, and the levy on those goods was valid.
Issue (ii): Whether section 18A could be applied to plant, machinery and laboratory apparatus forming part of the dealer's assets.
Analysis: The charging provision was required to be construed strictly. Plant, machinery and laboratory apparatus were not stock-in-trade of the dealer and could not be treated as "stock of goods remaining unsold" within the language of section 18A. The court declined to enlarge the charge by implication or by reference to legislative intention alone, and held that the provision did not clearly bring such assets within the tax net.
Conclusion: Section 18A was not applicable to plant, machinery and laboratory apparatus, and the attempted levy on those assets was not sustainable.
Final Conclusion: The challenge succeeded in part only, with the impugned levy upheld for unsold trading stock and disallowed for capital assets, and the matter sent back for disposal in accordance with these findings.
Ratio Decidendi: A taxing provision must be construed strictly, and it can be applied only where its language clearly brings the subject matter within the charge; a provision taxing "stock of goods remaining unsold" does not extend by implication to capital assets of the dealer.
TaxTMI 
