TaxTMI 
TaxTMI 
TaxTMI 
2015 (2) TMI 795
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....wer conferred by Clause (b) of Sub Section 1 of Section 3A of the Act at the point of sale to the extent of 20 per cent on yarn imported from outside India and 4 per cent on yarn of other kind. It has been submitted that imposition of tax on the yarn imported from outside the country is beyond the jurisdiction of State Government. 3. The petitioner is a registered dealer under the Act. It has been submitted that in pursuance to treaty between the Government of Nepal and the Government of India signed on 6.12.1991 as amended on 3.12.1996 it has been made obligatory for the Government of India to provide access to the Indian market free of customs duties and the quantitative restrictions for all articles manufactured in Nepal. Treaty has been made valid up to 5.12.2001 (Annexure-2). Petitioner has been given import licence by the Government of India called certificate of import/export (Annexure-3). It has been submitted that in pursuance to licence granted by the Government of India the petitioner imports Polyster Yarn from Nepal which is being sent by the consignor of Nepal to the consignee in the U.P. by road after due clearance from the custom frontier of India. 4. It has been f....
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.... By Order, (T. George Joseph) Pramukh Sachiv 6. Shri Pradeep Agrawal, learned counsel appearing on behalf of the petitioner submitted that State of U.P. lacks jurisdiction to impose tax on the yarn imported from outside the country hence it is void ab initio. He submits that the impugned notification is violative of Article 286 (1)(b) read with Article 304 A of the Constitution of India. It is further added that in view of Section 3 and 4 of the Central Sales Tax Act (CST) also it is not permissible for State Government to issue impugned notification. Alternatively, it has been submitted that it is not open for the government to impose 20 per cent tax on the goods imported from outside India for sale in the State of U.P. at higher rate than the goods manufactured and imported from other State or manufactured in the State of U.P.. The imposition of 20% tax in any way not reasonable. Reliance has been placed by learned counsel for the petitioner on the case of Shree Mahvir Oil Mills and another vs. State of Jammu and Kashmir and another reported in 1997 U.P.T.C. 227. 7. It shall be appropriate to consider the relevant provisions contained in Article 286 and 304 (A) of the Constit....
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....f Article 304 State has been conferred power to impose such restrictions on freedom of trade, commerce or intercourse with or within that State which may be required to secure public interest. 9. Accordingly, Article 304 of the Constitution of India does not seem to applicable in the present case as it confers regulatory power on the State government with regard to goods imported from other States providing that the tax has not been higher than the goods manufactured produced in the respective State itself. Article 304 does not relate to goods imported from outside the country. Accordingly, reliance placed by learned counsel for the petitioner on Article 304 seems to be not sustainable. 10 Under Clause 1(a) of the Article 286 State may not impose taxes on the sale or purchase of goods where such sale or purchase took place outside the State. Clause (b) of Article 286(1) deals with situation where goods are imported into or exported outside the territory of India. Thus the purpose of Clause (b) of Article 286 seems to restrict the State power where sale and purchase of goods takes place outside country and goods are imported or exported into or outside territory of India. 11 Whil....
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.... must start with the presumption that legislature did not make any mistake and must interpret so as to carry out the oblivious intention of legislature. It must not correct or makeup a deficiency, neither add nor read into a provision which are not there particularly when literal reading leads to an intelligent result. 16 In Grasim industries ltd. vs. Collector of Custom (2002) 4 SCC297, it has been held that every word and provision of a statute should be looked at generally and in the context in which it is used and not in isolation. 17 In S.Samuel M.D. Harresons Malayalam vs. UOI (2004)1 SCC 256, it has been held that when a word is not defined in the statute, a common parallence meaning out of several meanings provided in the dictionaries can be selected having regard to the context in which the word appeared in the statute. 18 In Deepal Girish bhai soni vs. United India insurance ltd. (2004) 5 SCC 385, it has been held that a statute has to be read in its entirety and the purport and object of the Act is to be given its full effect by applying principle of purposive construction. 19 In Pratap Singh vs. State of Jharkhand (2005) 3 SCC 551, it has been held that the Interpre....
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....on a field prohibited to it. Wherever legislative powers are so distributed, situation may arise where two legislative fields might apparently overlap, it is then the duty of the Courts, however, difficult it may be, to ascertain to what degree and to what extent, the Authority to deal with the matters falling within these classes of subjects exist in each legislature and to define, in the particular case before them, the limits of respective powers. It could not have been the intention that a conflict should exist; and, in order to prevent such a result the two provisions must be read together, and the language of one interpreted, and, where necessary modified by that of the other" 24 In (2005) 4 SCC 53: State of T.N. Vs. M. Krishnappan, Hon'ble Supreme Court held that when the Constitution provides a field of legislation, it has to be read in the broadest possible terms. 25 There appears to be no ambiguity in the letter and spirit of Article 286 of the Constitution of India. It should be interpreted as a whole right from the head note i.e., beginning which indicates that it relates to imposition of tax on sale and purchase of goods. Thus, if the sale and purchase of goods t....
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....e oil manufactured and produced in the State itself. To certain limit exemption was for the period of five years which was later on extended to further five years. On appeal Hon'ble Supreme court held that exemption granted to local manufacturer/producer of edible oil is violative of Article 301 read with Article 304 (a) of the Constitution of India. The observation made by Hon'ble Supreme Court in para 24 of the judgement is reproduced as under:- "Now, what is the ratio of the decisions of this Court so far as Clause (a) of Article 304 is concerned? In our opinion, it is this : the States are certainly free to exercise the power to levy taxes on goods imported, from other States/Union territories but this freedom, or power, shall not be so exercised as to bring about a discrimination between the imported goods and the similar goods manufactured or produced in that State. The clause deals only with discrimination by means of taxation; it prohibits it. The prohibition cannot be extended beyond the power of taxation. It means in the immediate context that States are free to encourage and promote the establishment and growth of industries within their States by all such means....
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.... case sale and purchase was exempted from sales altogether. The very fact of nonliability to tax is sufficient to exclude the assessee from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed. While considering the provisions contained in Section 3,4 and 5 of CST Act read with Article 286 of the Constitution of India their Lordship of Hon'ble Supreme Court held that though for the purpose of registration of a dealer and submission of the returns of sales tax transaction may be included in the turn over but such inclusion shall not affect non liability of these transaction to levy or imposition of sale tax by virtue of provision of Article 286 of the Constitution of India and the corresponding enactment and the corresponding provision enacted in the Act (CST). 30 In AIR 1974 SC 2272, S.Kodar v. State of Kerala, Hon'ble Supreme Court rules that State cannot impose tax beyond the legislative competence in terms of Entry 54 List II of the Constitution of India. 31 In 1983(4) SCC 45, M/s Hoechst Pharmaceuticals Ltd and others Vs. State of Bihar and others, Hon'ble Supreme Court relying upon the decision rendered in ....