Advance sales tax by executive instruction held unauthorised where the statute required notification and lawful authority.

A lump-sum advance sales tax on iron and steel, cement and chemical fertilisers was held unauthorised because the Manipur Sales Tax Act, 1990 permitted changes to levy only by State Government notification in the Official Gazette after prior notice. The office memorandum was issued by the Commissioner of Taxes, who had no statutory power to impose advance tax by executive instruction, and fiscal liabilities could arise only by authority of law. The selective coverage of only certain goods was also treated as arbitrary and without legal basis. The memorandum was therefore liable to be quashed as constitutionally impermissible.

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Issues: Whether the office memorandum dated 27 September 2000, requiring lump sum advance sales tax on iron and steel, cement and chemical fertilisers, was valid in the absence of statutory authority and prior notification under the Manipur Sales Tax Act, 1990, and whether the selective levy was arbitrary and violative of equality.

Analysis: The taxing provisions empowered the State Government to amend schedules or alter the mode of levy only by notification in the Official Gazette after prior notice. The impugned memorandum was issued by the Commissioner of Taxes, not by the State Government, and no statutory provision in the Act authorised levy of advance tax by executive instruction. In fiscal matters, tax can be imposed only by authority of law, and taxing statutes must be strictly construed. The selective coverage of only certain goods also disclosed arbitrary classification with no legal basis.

Conclusion: The office memorandum was authority of law, beyond the competence of the Commissioner of Taxes, and constitutionally impermissible; it was liable to be quashed, and the writ petitioner succeeded.

Ratio Decidendi: A tax or tax-related levy can be imposed only by statutory authority and in the manner prescribed by the statute; executive instructions cannot create a taxing liability where the Act does not authorise it.

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