TaxTMI 
TaxTMI 
TaxTMI 
1996 (6) TMI 340
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....,00,000 and assessed it to sales tax. aggrieved by the assessment orders passed by the assessing authority, M.E.S. filed an appeal before the Appellate Authority-Deputy Commissioner (filed.), kakinada. It was pleaded before the appellate authority that in view of the of article 285(1) of the Constitution of India, no tax can be collected ROM the Union Government; further M.E.S. is not a dealer within the meaning of the Act, as it is not carrying on business, therefore, no sales tax can be levied on it. It was also pleaded that no reasonable opportunity was given to M.E.S. The abovesaid pleas were not accepted by the appellate authority and the appeal was dismissed on July 31, 1992; the matter was remanded to the assessing authority to verify the actual turnover and assess the tax according to law. Aggrieved by the order of the appellate authority, M.E.S. filed an appeal before the Sales Tax Appellate Tribunal. The Tribunal held that M.E.S. could not be said to be a dealer under the A.P. General Sales Tax Act; the Tribunal thus allowed the appeal, setting aside the order of the appellate authority on September 21, 1995. It is the validity of that order of the Tribunal that is the su....
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....ocal authority and society within the meaning and the ambit of the definition of "dealer". So far as the Central Government or the State Government is concerned, explanation III to the definition of "dealer" puts the matter beyond the pale of controversy as it says that if the Central Government or the State Government buys, sells, supplies or distributes goods for cash or for deferred payment or for commission, remuneration or other valuable consideration whether or not in the course of business, shall be deemed to be "dealer" for the purposes of the APGST Act. Mr. Dhilleswara Rao, the learned counsel for the respondent, vehemently contends that inasmuch as the Union of India is not a person, M.E.S. cannot be treated as a dealer. This contention of the learned counsel completely ignores the existence of explanation III, referred to above. We may note here that the words "Central Government and the State Government" formed part of the definition of "dealer" prior to July 1, 1985 but they were deleted from clause (i) and explanation III was added by Act 18 of 1985 with effect from July 1, 1985. Thus it is clear that even before July 1, 1985 "the Central Government" and "the State ....
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.... so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. (2)..................." It is true that by virtue of this article, the property of the Union is exempted from all taxes imposed by a State or by any authority within a State and that this exemption is subject to the law that might be made by the Parliament. Admittedly, there is no law made by the Parliament governing the said provision. The question then arises, whether the sales tax would fall within the concept of "all taxes" in article 285(1). In In re, Sea Customs Act (1878) AIR 1963 SC 1760 the Special Bench of the Supreme Court while explaining the nature of excise duty in the context of section 20(2) of the Customs Act, observed in para 25 as follows: "This will show that the taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. Therefore, though both excise duty and sales tax are levied with reference to good....
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.... Railway Department questioned the imposition of road tax under the Punjab Motor Vehicles Taxation Act, 1924. The learned single Judge of the Punjab and Haryana High Court held that the provisions of article 285(1) of the Constitution clearly bars the imposition of the tax. It was also observed that the provisions of clause (2) of article 285 of the Constitution were not applicable. That is a case where the property of the Union was subjected to direct tax and as pointed out above, exemption contemplated under article 285(1) of the Constitution, is confined to direct taxes only. Therefore, that judgment does not advance the case of the petitioner. The learned counsel next relied upon the judgment of the Supreme Court in Union of India v. Purna Municipal Council AIR 1992 SC 1597. In that case Union of India claimed exemption from service charges on the vehicles of the Railways for the period from 1954 to 1960. The Bombay High Court did not accept the defence of the Union of India that no tax could be levied in view of the provisions of article 285 and section 135 of the Railways Act. Reversing the judgment of the Bombay High Court, the Supreme Court held that section 135 of the Ind....