1968 (8) TMI 184 - HC - VAT and Sales Tax

Court rules on tax appeal jurisdiction and state law discrimination, dismissing petition with costs.

The court dismissed the writ petition, ruling that Section 9(3) of the Central Sales Tax Act incorporates both procedural and substantive provisions of ... - Issues Involved:1. Whether Section 9(3) of the Central Sales Tax Act incorporates all provisions of the A.P.G.S.T. Act, including Section 21(6).2. Whether the requirement of tax payment before entertaining an appeal under the Central Sales Tax Act is discriminatory under Article 14 of the Constitution.Detailed Analysis:Issue 1: Incorporation of Provisions of A.P.G.S.T. ActThe petitioner, a dealer in rose oil, was assessed under the Central Sales Tax Act for transactions deemed to be inter-State sales. The petitioner argued these were local sales under the A.P.G.S.T. Act, for which tax had already been paid. The appeal to the Sales Tax Appellate Tribunal was challenged on the grounds that Section 9(3) of the Central Sales Tax Act does not incorporate all provisions of the A.P.G.S.T. Act, specifically Section 21(6), which requires proof of tax payment before an appeal is entertained.The court analyzed whether Section 9(3) of the Central Sales Tax Act incorporates substantive provisions of the A.P.G.S.T. Act. It was concluded that Section 9(3) authorizes state authorities to assess, collect, and enforce tax payments under the Central Sales Tax Act in the same manner as under the State Act, including all provisions relating to returns, appeals, reviews, revisions, penalties, and compounding of offenses. The court emphasized that the language in Section 9(3) is comprehensive and all-embracing, applying both procedural and substantive provisions of the State Act to the Central Act.The court contrasted this with Section 12 of the Central Excises and Salt Act, which only refers to procedural matters, thus not extending to substantive provisions. The court cited the Supreme Court's interpretation in The State of Mysore v. Lakshminarasimhiah Setty, affirming that the Central Sales Tax Act did not intend to deviate from the State Act's provisions regarding levy, assessment, and collection of tax.Issue 2: Discrimination Under Article 14The petitioner contended that the requirement to pay tax before an appeal is entertained under the Central Sales Tax Act is discriminatory, as other states may not have similar provisions, thus violating Article 14 of the Constitution. The court held that discrimination under Article 14 must be inherent within the Act itself, not arising from differences in state laws.The court explained that different states having different provisions does not constitute discrimination under Article 14. It noted that legislative independence allows states to enact laws tailored to their specific needs and conditions. The Central Sales Tax Act was designed to facilitate uniform tax collection for inter-State sales, with states authorized to levy and collect taxes as per their respective sales tax laws.The court referenced E.I. Sandal Oil Distilleries Ltd. v. State of Andhra Pradesh, where it was held that differences in state laws do not imply discrimination by the Central Act. The court found no evidence showing that other states lack similar provisions to Section 21(6) of the A.P.G.S.T. Act, thus dismissing the argument of discrimination.Conclusion:The court dismissed the writ petition, concluding that Section 9(3) of the Central Sales Tax Act incorporates both procedural and substantive provisions of the A.P.G.S.T. Act, including the requirement to pay tax before an appeal is entertained. The court further held that differences in state laws do not constitute discrimination under Article 14. The petition was dismissed with costs, and the advocate's fee was set at Rs. 100.Petition dismissed.