TaxTMI 
TaxTMI 
1994 (9) TMI 335
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....business of manufacture and sale of steel and wooden furniture, trunks and agricultural implements at Sri Ganganagar. They are registered dealers under the Central Sales Tax Act (in short, "the CST Act" and "the RST Act"). They supply furniture and boxes to various departments of the Central Government located at Sri Ganganagar. Assessment orders were passed under section 10 of the RST Act in respect of the assessment year 1989-90. They have now received notices under section 12 of the RST Act for showing cause as to why reassessment be not made as in the earlier assessments sales tax had been calculated at lesser rate of 4 per cent than the prescribed rates of 10 per cent or 12 per cent. 3.. In the Writ Petitions Nos. 2334 of 1988 and 5591 of 1991, the respondents have filed replies to show cause notices stating that the said notices are valid, they do not offend articles 14, 301, 302, 303 or 304A of the Constitution and the notices under section 12 of the RST Act have rightly been issued as furniture was sold and tax at the rate of 4 per cent had been paid instead of 10 per cent or 12 per cent. 4.. It has been contended by the learned counsel for the petitioners that a dealer o....
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....rate of 4 per cent when the goods are sold to Government departments situated in other States. The same commodities supplied by a trader of Rajasthan to the same Government departments attract sales tax under the RST Act at the rate specified in the notification issued under section 5 of the RST Act. The traders of other States selling goods in Rajasthan form a different class of persons from the traders of Rajasthan selling goods in Rajasthan. This is a reasonable classification and is permissible under article 14 of the Constitution of India. 7.. State has discretion to prescribe different rates of tax for different goods and may also exempt any commodity. Article 14 of the Constitution is not attracted. It has been observed in Sita Ram Bishambhar Dayal v. State of U.P. [1972] 29 STC 206 (SC) at pages 207-208; AIR 1972 SC 1168, para 5, as follows: "It is true that the power to fix a rate of tax is a legislative power but if the Legislature lays down the legislative policy and provides the necessary guidelines, that power can be delegated to the executive. Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determini....
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....ture used, in the process of growing, curing and grading, in the market facilities foreign and inland, in the price and in the variety of uses to which they are put and also the class of customers that take to them.' Thus, it will be seen that Virginia tobacco has features which distinguish it from country tobacco, and can be treated as a class in itself. It will therefore be within the power of the State to impose a tax on the sales of Virginia tobacco while exempting the country tobacco." 9. It has been held in Pandit Banarsi Das Bhanot v. State of Madhya Pradesh [1958] 9 STC 388 (SC); [1959] SCR 427, as under: "..........Now, the authorities are clear that it is not unconstitutional for the Legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like." 10.. Article 301 of the Constitution provides that subject to the other provisions of this Part xiii, trade, commerce and intercourse throughout the territory of India shall be free. Articles 302, 303 and 304 empower the Parli....
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....ent No. F.1(2)FD/GFAR/88 Jaipur, dated the 17th March, 1990 Circular It has been brought to the notice of the Government that some autonomous bodies are not following the instructions issued vide this department circular No. F. 5(8)FD/RRA & A/76-I dated January 19, 1987. While making any purchases they must compare the rates quoted by firms outside Rajasthan and those in Rajasthan and while doing so the element of Rajasthan sales tax shall be excluded whereas that of Central sales tax shall be included. Non-observance of the aforesaid circular has been viewed seriously by the Government. It is therefore, emphasised again that all Government corporations/companies/ public undertakings should follow these explicit instructions while making purchase. Sd/ (Y. Singh) Finance Commissioner and Secretary." As a result of these circulars, there remains no discrimination in between the dealers of outside Rajasthan and dealers of Rajasthan. 12. The next question for consideration is whether the notices (annexure 3 in all the writ petitions) issued under section 12 deserve to be quashed. Notification No. F.4(3) FD/Gr. IV/79-2 dated March 5, 1979, was issued under section 4(2) of the A....