MANGALORE STEEL AGENCY Vs. GOVERNMENT OF KARNATAKA

JUDGEMENT

(1.) THE petitioner is M/s. Mangalore Steel Agency. It is a registered dealer under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act" ). It is aggrieved by the assessment orders as at annexure-A concerning its taxable turnover for the period 1st October, 1979 to 31st August, 1980. The total turnover returned was Rs. 68,01,457. 50. On identical amount exemption was also claimed inter-alia, on the ground that the goods in question, namely, mild steel rounds, flats, etc. , sold to M/s. Canara Wire and Wire Products, Yeyyadi, Mangalore, were goods which had been re-rolled items by the principals of the assessee who claimed to be only an agent. It is clear from the assessment order as at annexure-A that in support of exemption claimed, from No. 32 was not produced, as an agent of the principal as per section 11 (1) of the Act. Therefore, the assessing authority came to the conclusion that the sales made were re-rolled iron steel out of tax-paid ingots. The assessee being the first dealer in mild steel rounds was liable to pay tax in the various re-rolled items of iron and steel as the sales were made within the State only. Therefore the entire turnover, as admittedly the total turnover, became the taxable turnover and brought to tax. Aggrieved by that order as at annexure-A which is dated 18th November, 1981, he preferred writ petition on 11th March, 1982, questioning the constitutional validity of sub-section (4) of section 5 of the Act which brings to tax certain declared goods at the point of first sale in the State in accordance with the Fourth Schedule to the Act.

(2.) THE argument advanced is that sub-section (4) of section 5 being arbitrary, not being clear as to what constitutes taxable turnover having regard to its language is violative of article 14 of the Constitution and therefore it be declared to be ultra virus the Constitution as violative of article 14. The assessment concluded thereunder should also be struck down by a writ of certiorari.

(3.) THIS argument is rather novel because all sales must necessarily include a purchase and vice versa, in that all purchases do constitute an element of sale, in that there is a seller who conducts the sale and there be a purchaser who purchases it. Therefore the so-called vagueness or arbitrariness in the language employed in sub-section (4) is more imaginary than real.