TaxTMI 
TaxTMI 
2012 (11) TMI 1049
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....Act No. 4 of 2010) with effect from the first day of April, 2010. 2. By consent of the learned counsel on both sides, the writ petition is heard on merits. I have heard Shri K.G. Raghavan, learned Senior Counsel appearing for the petitioner and Shri K.M. Shivayogiswamy, learned Additional Government Advocate appearing for the respondents. 3. The impugned provision reads as follows: "4. Liability to tax and rates thereof.-(1) to (4) . . . (5) Notwithstanding anything contained in sub-section (1), a registered dealer shall be liable to pay tax on the sale of cigarettes, cigars, gutkha and other manufactured tobacco, on the maximum retail price indicated on the label of the containe....
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....on the sale or purchase of goods on any notional measure of tax, i.e., on the basis of a notional price as a measure of tax. He further submitted that a similar provision had come up for consideration before the Rajasthan High Court in Rajasthan Chemists Association v. State of Rajasthan [2006] 147 STC 476 (Raj) which held the said provision as beyond the legislative competence of the State as being outside the scope of entry 54 of List II of the Seventh Schedule to the Constitution of India. The said judgment is affirmed by the Supreme Court in State of Rajasthan v. Rajasthan Chemists Association [2006] 147 STC 542 (SC); [2006] 6 SCC 773. 5. On the contrary, Shri Shivayogiswamy, learned Additional Government Advocate argued supporting t....
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....y, for the purpose of fixing the rate of abatement under sub-section (1), take into account the amount of sales tax and other local taxes, if any, payable on such goods. Explanation.-(i) Where on the package of any goods different retail sale prices are declared with reference to different areas, the retail sale price declared with the reference to the area within the State in which it is sold shall be deemed to be the retail sale price for the purposes of this section. (ii) Where on the package of any goods different retail sale prices are declared with reference to different areas and none of the areas falls within the State, the maximum of such retail sale prices shall be deemed to ....
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....evy cannot be divorced therefrom where price and not the weight of goods is the measure of tax. 208. If section 4A is designed to bring a levy into existence which is divorced from the sale subject to tax under the Act, it falls foul with the legislative competence under entry 54 of List II of the Seventh Schedule so also notification, annexure 3, to the extent it is intended to levy tax on first point sale with reference to price which could be charged in respect of a subsequent sale which has not come into existence at the time liability to tax arises and is determined ex hypothesi". The aforesaid judgment of the Rajasthan High Court holding that the provision providing for levy of t....