2012 (12) TMI 156 - HC - VAT and Sales Tax

Dismissal of Writ Petition on Tax Rates Notification Validity Emphasizes Proper Assessment

The court dismissed the writ petition challenging the constitutional validity of a notification rescinding an earlier notification regarding tax rates on ... Classification of steel tubes - exemption from CST - inter-state sales - constitutional validity of the notification No.F 10/11/2005/CT/V (20) - steel strips are manufactured in the integrated plant same is used for manufacture of steel tubes – Held that:- Classification as allegedly introduced by notification No. F 10/16/2002/CT/V (17) dated 12-2-2002 has been rescinded by the impugned notification No. F 10/11/2005/CT/V (20) - Notification No. F 10/16/2002/CT/V (17) dated 12-2-2002 deals with tax payable under sub section (1) of section 8, if the same is rescinded by the impugned notification, the steel tubes may come under section 8(2) of the CST and the rate has been reduced from 2% to 1% by notification No. F- 10/11/2005/CT/V (31) dated 31-5-2005. Thus, the facts which are necessary for adjudication is that whether the petitioner is liable to be taxed under section 8(2) or section 8(1) that cannot be ascertained without proper assessment by the Assessing Authority on the basis of return submitted by the dealer - petition cannot be entertained at this stage on the ground that the entire facts are not available, as the petitioner ought to have filed the return before the Assessing Authority, and thereafter the decision taken thereon would be appellable before the appellate authority - writ petition dismissed Issues:Constitutional validity of notification rescinding earlier notification regarding tax rates on steel tubes manufacturing.Analysis:The petitioner challenged the constitutional validity of a notification issued by the Government of Chhattisgarh, which rescinded an earlier notification that exempted certain manufacturers of steel tubes from paying tax under the Central Sales Tax Act. The petitioner, a manufacturer of steel tubes, argued that the notifications created different tax rates based on the manufacturing process. The State contended that the rate of tax on interstate sale of steel tubes was uniform for all manufacturers, regardless of the source of steel strips used in manufacturing. The court noted that the petitioner did not provide any assessment under the impugned notification, making it difficult to adjudicate the issue at that stage.The court examined the notifications issued by the State Government, which exempted certain classes of goods from tax under the Central Sales Tax Act for a specified period. The court observed that the classification introduced by the earlier notification had been rescinded by the impugned notification, rendering the petitioner's grievance moot. The court emphasized the need for proper assessment by the Assessing Authority to determine the applicable tax section under the Act.In conclusion, the court dismissed the writ petition, stating that without the necessary facts from proper assessment, the petition could not be entertained at that stage. The court advised the petitioner to follow the proper legal procedures if they wished to challenge the decision further. The parties were directed to bear their own costs, and the petition was dismissed for lack of merit.