SHIRAGANNAVAR Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) In this writ petition the petitioners who are carrying on business as" commission agents within the market yards established by the Agricultural Product Market Committees of Jamkhandi and Mahalingapura of Bijapur District have questioned the constitutional validity of S. 6-B of the Karnataka Sales Tax Act of 1957 (hereinafter referred to as the 'Act') which was introduced by S. 3 of the Karnataka Sales Tax Act (Second Amendment) Act 1975 (hereinafter referred to as the 'amending Act') and of S. 18(3) of the Act which was introduced by S. 4 of the amending Act. S. 6-B of the Act reads as follows: "There shall be levied and collected from every dealer liable to pay tax under S. 5 or under S. 6 and whose total turnover is ten lakh rupees or more in a year, an additional tax at the rate of ten paise in the rupee on the sales tax or purchase tax or both payable by such dealer: Provided that in respect of the sale or purchase of any of the declared goods mentioned in the Fourth Schedule, the tax together with the additional tax shall not exceed three per cent of the sale or purchase price thereof". S.18(3) of the Act reads as follows:

(2.) The case of the petitioners is that the levy of additional tax under S.6B which cannot be collected by way of such additional tax from the| purchasers cannot be considered as tax levied in exercise of the power vested in the State Legislature by Entry 54 of last II ot the VIIth Schedule of the Constn of India. It is argued on behalf of the petitioners that the additional tax is in the "nature of income-tax and the State Legislature Wai therefore incompetent'to levy. This question is no longer res integra. In S. Kodar v. State of Kerala , AIR. 1974 SC. 2272, where a provision similar to S.6B of the Act was questioned, the Supreme Court observed as follows :

(3.) The fact that a dealer cannot collect the additional tax from his constituent also would not alter the character of the additional tax. In the above decision, the Supreme Court also has approved the observations made by it earlier in Konduri Buchirajalingam v. State of Hyderabad, AIR. 1965 SC 750, in which it was held that a tax which was levied on the sales effected by a dealer could .still retain the character of sales tax even though he had ao power to recoup the amount of tax payable fey him from any other party. Hence, the second contention -also fails.