AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1397
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....tional, illegal and void. 2. The petitioners are sole proprietorship concerns engaged in wholesale and retail distribution of live chicken and other live stock. It is submitted that Section 20 of the said Act deals with 'Exemption from Tax' and states that subject to certain restrictions and conditions as may be prescribed, a dealer who deals in the goods specified in the First Schedule to the Act shall not be liable to pay any tax under the said Act in respect of such goods. It is submitted that Entry 39 of the First Schedule includes Meat, Fish, Prawn and other aquatic products when not cured or frozen; eggs and live stock. 3. The petitioners' case is that live chicken comes within the meaning of live stock and exempt from payment of Value Added Tax. It is further submitted that in terms of sub-section (1) of Section 14 of the Act, every registered dealer or a person liable to be registered under the Act, whose total turnover for a year exceeds rupees ten lakhs and every casual trader or agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax on the taxable turnover in each tax period at the rate and at the point as specified in the Sc....
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....te of Kerala reported in AIR 1962 SC 723, Ayurveda Pharmacy & Anr., vs., State of Tamil Nadu, reported in AIR 1989 SC 1230, and Aashirwad Films vs. Union of India & Ors., reported in (2007) 5 MLJ 170 (SC) . 6. Mrs.N.Mala, learned Special Government Pleader appearing for the respondent submitted that the Writ Petitioners have challenged the levy of tax on live chicken in Mahe region on the ground of discrimination and such contention is not tenable, as there is reasonable classification in imposition of tax in Mahe alone. It is submitted that the Union Territory of Puducherry comprises of four regions wherein Karaikal and Puducherry regions are surrounded by State of Tamil Nadu, Yanam is surrounded by State of Andhra Pradesh and Mahe is surrounded by State of Kerala. In the States of Tamil Nadu and Andhra Pradesh, there is a total tax exemption in respect of sale of live chicken, whereas the State of Kerala levies tax at 14.5%. It is submitted that the dealers like petitioners have charged the same price for the live chicken as prevalent in Kerala, where there is imposition of tax at 14.5%. It is submitted that the petitioners are enjoying the benefit of exemption and have not pass....
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....primarily on the ground that the impugned enactment is discriminatory and violative of Article 14 of the Constitution of India. The petitioners are dealers in live chicken registered under the provisions of the Act and carrying on business in Mahe region of the Union Territory of Puducherry. In terms of Section 20 of the Act, goods specified in the First Schedule of the Act are not liable to tax. Entry 39 of the First Schedule includes live stock. It is not in dispute that the product dealt by the petitioners namely live chicken falls within the meaning of live stock. By virtue of the exemption, no tax is liable to be paid on the sale of live chicken by the petitioners. While so, a notification was issued by the Government of Puducherry, on 31.12.2011, bringing about an amendment to Entry 39 of the First Schedule. The Entry 39A included Meat, Fish, Prawn and other aquatic products when not cured or frozen and eggs. Entry 39-B included live stock other than chicken sold in Mahe region. An amendment was also brought about in Schedule 3 of the Act, by adding the new Entry, under Entry No.81 as Entry 81-A including live chicken sold in Mahe region. Thus, by virtue of the amendment, liv....
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.... In the case of Aashirwad Films vs. Union of India & Ors., reported in (2007) 5 MLJ 170 (SC), the classification was faulted as being only on the basis of language without anything more and therefore, having a different rate of tax was held to be exfacie arbitrary. In the case of Ayurveda Pharmacy & Anr., (supra) the Hon'ble Supreme Court held that the levy of higher rate of sales tax on Arishtams and Asavas is discriminatory, as they are also medicinal preparation and cannot be treated differently for the purpose of sales tax on the ground of their high alcoholic content. We may pointed out that the decision in the case of Aashirwad Films (supra), would not render any assistance to the case of the petitioners as the issue which arose therein was regarding the rate of tax in respect of a medicinal preparation and it was held that there was no rational basis for discrimination between one commodity and another for the purpose of imposing tax. 12. It is well settled legal principle that the State does not have to tax everything in order to tax something; it enjoys a wide discretion in the matters of taxation and enjoys more freedom for classifying the objects to be taxed and the....
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....ners had availed the exemption and the benefit of the exemption was not passed on to the consumers. Therefore, the Government accepted the decision of the Empowered Committee and issued a notification with effect from 01.01.2012, which subsequently was made as an amendment to the Act (impugned Act). 16. From the counter affidavit it is seen that on account of making the transaction taxable at 5%, the Government of Puducherry has been able to generate an yearly revenue Rs. 6.7 crores, which are to be utilised for other developmental activities. Therefore, the distinction sought to be made for making the transaction taxable for Mahe region alone cannot be termed to be an improper exercise nor arbitrary or an artificial classification, but a reasonable one with a substantial distinction between two classes. 17. As pointed out by the Hon'ble Supreme Court, the State enjoys a vide discretion in the matters of taxation and classifying the objects to be taxed and the rates of taxation. As pointed out by the Hon'ble Supreme Court in the case of Khandige Sham Bhat vs. Agricultural ITO reported in AIR 1963 SC 591, the inherent complexity of fiscal adjustment of diverse elements, pe....