SHAKANJI DEVJI Vs. ADDL COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Because common questions of law arise for consideration in these petitions, they are disposed of by this common judgment.

(2.) Petitioners, in all these petitioners, were dealers in goods which had. been declared by the Parliament as of special importance in inter-State trade or commerce under the provisions of the Central Sales Tax Act (hereinafter referred to as the Central Act) . The purchase turnovers of the goods in question were liable to payment of purchase tax under S. 5(4) read with Schedule IV of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the State Act) . The period of assessment in all these cases is prior to 1967. According to the pronouncement of the Supreme Court in State of Mysore v. Yaddalam Lakshminthasimhiah Seity & Sens (1965) 16 STC 231 SC. the petitioners were not liable to, pay Central Sales Tax even though the goods in question had been sold in the course of inter-state trade or commerce, in view of S. 9 of Central Act as it stood then read with the relevant provisions of the State Act. In all these cases, the petitioners had also been allowed refund of the purchase tax paid by them by reason of the Interpretation placed by this Court in Munshi Abdul Rahman & Bros., v. Commercial Tax Officer 20 STC. 89=(1967) 1 MysLJ. 432=1967 KarLJ. 52. In the year 1969. the Parliament amended the Central Act by introducing S. 6(1-A) and substituting S. 9 with retrospective effect. By reason of the said amendment the turnover relating to inter-state sales of goods in question became liable to tax. In the year 1972 S. 15 (b) of the Central Act was amended by Parliament with retrospective effect by Central Sales Tax (Amendment) Act, 1972. Thereafter S. 5 (4) of the State Act was also amended with retrospective effect by Karnataka Sales Tax (Amendment) Act, 1973. After the Karnataka Sales'Tax (Amendment) Act, 1973 was passed, the concerned Assessing Authorities under the State Act issued notices to the petitioners to show cause as to why the orders of assessment passed against them in respect of the periods prior to 1967 should not be rectified, as according to them, the refund of sales tax allowed under the State Act was erroneous. The petitioners contended before the Sales Tax Authorities that they (the authorities) had no jurisdiction to rectify the orders of assessment and that the petitioners were not liable to pay purchase tax under the provisions of the State Act, notwithstanding the amendment made in the year 1973. The contentions of the petitioners were overruled by the Sales Tax Authorities and orders rectifying the assessment orders were passed by them As a result of the rectification, the petitioners became liable to pay to the State Government the amount equivalent to the purchase tax payable under the Stale Act. In some cases, they became liable to refund to the State Government the amount equivalent to the purchase tax paid by them under the State Act. which had been refunded to them by the Asssessing Authorities. The petitioners, have questioned in these writ petitions, the order passed by the several Assessing Authorities, rectifying the orders of assessment passed by them earlier, and calling upon them to pay the amounts equivalent to tax payable by them under the provisions of the State Act.

(3.) In order to appreciate the contentions urged by the parties in these cases, it is necessary to set out the history of legislation governing the cases on hand. After the decision of the Supreme Court in Bengal Immunity Co., Ltd. v. State of Bihar AIR. 1955 SC. 661., the Parliament amended the Constitution by the Constitution (sixth) Amendment Act, 1956 in certain respects. The effect of the amendment of the Constitution may be summarised thus: By Entry 92A of List-I of the VII Sch of the Constitution, the Parliament was empowered to levy taxes on the sale or purchase of goods other, than newspapers, where such sale or purchase took place in the course of inter State trade or commerce. The power of the State Legislatures to levy taxes on sale or purchase of goods other than newspapers, under Entry 54 of List II was made subject to the provisions of Entry 92-A of List I. Although by virtue of Entry 92-A in List-I, the Parliament was authorised to levy taxes on the sale or purchase of goods other than newspapers. where such sale or purchase took place in the course of inter-State trade or commerce the taxes so collected were assigned to the State under Art. 269(1) (g) of the Constitution. Clause (3) of Art. 286 directed that any law of a State was, in so far as it imposed or authorised the imposition of tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce, subject to such restrictions and conditions in regard to the system of levy rates and other incidence of the tax as Parliament might by law specify, Pursuant to Entry 92-A of List I and clause (3) of Art. 286, the Parliament enacted the Central Act in the year 1956. The Central Act (except S. 15 of that Act) came- into force on 5th Jan: 1957 and S. 15 of that Act came into force on 1-10-1958, S. 6(1) of the Central Act authorised the levy of tax on all sales effected in the course of inter State trade or commerce, subject to the ether provisions of the Act. S. 8 of the Central Act determined the rate at which the sales tax was payable. S. 9 prescribed the procedure regarding levy and collection of tax and penalties. S. 14 declared that the goods mentioned therein were of special importance in Inter State Trade or commerce. One of the restrictions and conditions imposed by the parliament under S. 15 of the Central Act on the power of the State Legislature to levy tax on sale or purchase of declared goods was as tollows:-