POLAKI MOTORS Vs. STATE OF ORISSA

JUDGEMENT

(1.) In the writ petitions filed in the year 1983 the constitutional validity of the Orissa Additional Sales Tax (Amendment and Validation) Ordinance, 1983 is questioned. In Writ Petition Nos. 207 to 211 of 1984 and 1302 of 1986 the constitutional validity of the Orissa Additional Sales Tax (Amendment and Validation) Act, 1983 (Act 22 of 1983 which replaced the ordinance is in question. Civil Appeal No. 4596 of 1990 has been filed against the judgment of the Orissa High court in which the constitutional validity of Orissa Act 22 of 1983 was upheld. The arguments in the writ petitions and the civil appeal therefore related to the vires of the Orissa Act 22 of 1983 which we will hereinafter refer to as the 'validation Act'.

(2.) The writ petitioners and the appellants in the civil appeal are registered dealers under the Orissa Sales Tax Act, 1947 (hereinafter referred to as the 'principal Act'). Section 4 imposes the liability to pay tax in accordance with the provisions of the Principal Act on every dealer whose gross turnover during the fiscal year exceeds Rs. 50,000. 00. 'gross turnover' is defined in Section 2 (dd) as meaning the total of the turnover of sales and turnover of purchases. 'turnover of Sales' is defined in Section 2 (i) as meaning the aggregate of amounts of sale prices and tax, ifany, received and receivable by a dealer in respect of sale or supply of goods other than those declared under Section 3-B of the Principal Act effected or made during a given period. 'turnover of purchases' is defined in Section 2 (j) as meaning the aggregate of the amounts of purchase prices paid and payable by a dealer in respect of the purchase or supply of goods or classes of goods declared under Section 3-B. However, under Section 5, tax is payable by the dealer only on his taxable turnover at the percentage notified by the government from time to time. Under Section 3-B the government may from time to time by notification declare any goods or class of goods to be liable to tax on turnover of purchases but there is a proviso which says no tax will be payable on the sale of such goods or class of goods declared under this section. Section 6 enables the government by notification to exempt from tax the sale or purchase of any goods or class of goods and likewise withdraw any such exemption. Section 7 provides that notwithstanding anything to the contrary in the Act the State government may subject to such condition or restriction by notification exempt in whole or in part any class of dealers from the payment of tax or allow any class of dealers to defer from payment of tax. Section 8 which is relevant for the purpose of this decision may be quoted and that reads as follows:

(3.) It may be seen from the scheme as contained in the provisions of the Principal Act, if the goods are not exempted under Section 6 either the sale or purchase could be taxed and not both. In the case of goods covered by the notification under Section 3-B the tax is levied on the purchase and in the case of other taxable commodities on the sale. Section 8 which has an overriding effect by reason of the opening non-obstante clause in that section restricts the levy of either the sales tax or purchase tax to a single point in the same series of sales or purchases by successive dealers of thesame goods. Though Section 4 as such does not restrict the power of the government to levy multi-point tax since that provision was expressly made subject to Section 8 and also by reason of the non-obstante clause in Section 8 the levy of tax at a single prescribed point and prohibition against levy of tax at more than one point is the scheme of the Act. It may also be seen that the Principal Act provided a tax on the taxable turnover and not on the gross turnover.