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of <h1>Court Upholds Sales Tax Act Validity, Deems Incentives Non-Discriminatory</h1> The court upheld the constitutional validity of Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962, citing past judgments. SRO No. 267 was ... - Issues Involved:1. Constitutional validity of Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962.2. Validity of SRO No. 267.3. Alleged discrimination under Article 14 of the Constitution.4. Legality of retrospective tax imposition.5. Continuation of exemption under SRO No. 468.Detailed Analysis:1. Constitutional Validity of Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962:The petitioners argued that Section 5 of the Act suffers from excessive delegation of powers, giving uncanalised and unguided powers to the Government, thus violating Article 14 of the Constitution. The respondents countered that the classification and delegation in taxing statutes are permissible and necessary due to the legislature's wide powers in such matters. The court upheld the constitutional validity of Section 5, referencing past judgments which established that the legislature can delegate the power to select persons or objects for tax exemption. The court cited Hiralal Rattanlal v. Sales Tax Officer and Orient Weaving Mills (P.) Ltd. v. Union of India to support its decision, stating that the delegation of such details to the Government is essential due to ever-changing social, economic, and administrative conditions.2. Validity of SRO No. 267:The petitioners challenged SRO No. 267, claiming it was discriminatory and violated Article 14. The respondents argued that the SRO was not discriminatory as brick manufacturers and tile manufacturers were not similarly situated. The court agreed with the respondents, noting that the tile industry was new and required incentives, unlike the well-established brick industry. The court concluded that the classification had a clear nexus with the Government's policy of industrialisation and was not violative of Article 14.3. Alleged Discrimination Under Article 14:The petitioners claimed that SRO No. 267 was discriminatory as it treated brick manufacturers differently from tile manufacturers, despite similar circumstances. The court found that the two industries were not similarly situated, as the tile industry required incentives to establish itself, unlike the brick industry. The court held that the classification was reasonable and had a nexus with the objective of promoting industrialisation, thus not violating Article 14.4. Legality of Retrospective Tax Imposition:The petitioners argued that the notices issued to them to submit accounts or pay sales tax from 1st April 1977 were illegal as they imposed tax retrospectively. The court clarified that SRO No. 468, which exempted bricks from sales tax, ceased to be effective after 31st March 1977. Hence, the petitioners became liable to pay sales tax automatically from 1st April 1977 under Section 4 of the Act. The court concluded that charging tax from this date was not retrospective, as the liability arose immediately after the exemption ended.5. Continuation of Exemption Under SRO No. 468:The petitioners contended that SRO No. 468 continued to provide exemption as it was not explicitly superseded by subsequent SROs, including SRO No. 267. The court rejected this argument, stating that SRO No. 468 was only effective until 31st March 1977. After this date, the exemption ceased, and the petitioners were liable to pay sales tax. The court emphasized that there is no rule of 'once exemption, always an exemption.'Conclusion:The court dismissed the writ petitions, finding no merit in any of the grounds raised by the petitioners. The constitutional validity of Section 5 of the Act was upheld, SRO No. 267 was deemed non-discriminatory, and the imposition of sales tax from 1st April 1977 was found to be legal and non-retrospective. The court also ruled that the exemption under SRO No. 468 did not continue beyond its specified period. The stay orders issued earlier were vacated, and the petitions were dismissed without any order as to costs.
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