MATHEW Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner has been assessed to additional sales tax under sub-section (2) of S. 3 of the General Sales Tax Act, 1125, in respect of the sales of tobacco effected by him in 1953-54. THE relevant portion of that section read as follows: " (1) Subject to the provisions of this Act: (a) Every dealer shall pay for each year a tax on his total turnover for such year; and (b) the tax shall be calculated at the rate of three pies for every Indian rupee in such turnover. (2) Subject as aforesaid, the sale of any of the goods mentioned below shall be subject to a tax at the rate specified in respect thereof, at such single point in the series of sales by successive dealers as may be prescribed; and the tax shall be paid by the dealer concerned on his turnover in each year relating to such goods and shall be in addition to the tax to which he is liable under sub-section (1) on his total turnover for the year: Description of the goods. Rate of tax for every Indian rupee in the turnover relating to such goods. (ix) Tobacco 11/2 annas (3) A dealer whose total turnover in any year is less than ten thousand Indian rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2 ). "and R. 6 of the General sales Tax Rules, 1950, omitting the proviso thereto, was in the following terms: "the sale of any of the goods mentioned in items (1)to (ix) in S. 3, sub-section 2, shall be subject to the tax specified in that sub-section at the stage of sale by the person who in the State is the first dealer in such goods, who is not exempt from taxation under S. 3 (3):"

(2.) THE petitioner purchased the tobacco from outside the state in inter-State trade - in what has come to be termed "explanation sales" - & sold it within the State. His contention is that he is not liable to the additional tax under subsection (2) of S. 3 as his supplier who sold the goods to him in inter-State trade, and not himself, should be considered as "the person who in the State is the first dealer in such goods. " It is common ground that the supplier was not exempt from taxation under S. 3 (3) of the Act.

(3.) A reading of R. 6 which was fixing a point of taxation for the additional tax under S. 3 (3) of the Act, however, does not indicate that the point was being fixed with a view to future parliamentary legislation under art. 286 (2) of the Constitution or only for the limited period of less than a year between the 30th day of May 1950 and the 31st day March 1951. In these circumstances we think we should hold that "explanation sales" are not within the purview of that rule and that the first sale specified is the first intra-State sale by a dealer like the petitioner who is not exempt from taxation under S. 3 (3) of the Act. It follows that the petition should fail and that it is unnecessary to consider whether the amendments effected to the general Sales Tax Act, 1125 by the Travancore-Cochin General Sales Tax (Amendment) Act, 1957, and by the General Sales Tax (Amendment and Validation)Act, 1962, subsequent to the Constitution (Sixth Amendment) Act, 1956, are invalid and of no effect as contended by counsel for the petitioner.