GUJARAT LEASE FINANCING LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) These three petitions have been filed for declaring Section 2(36A) and Section 3A of the Gujarat Sales-Tax Act, as ultravires Constitution of India being beyond the legislative competence of the State Legislature in so far as it purports to tax Inter-State `specified sales' and has sought that respondents be permanently restrained from taxing such Inter-State `specified sales'; and the respondents be further directed to refund the tax so collected on such inter-state deemed sales and to restrain the respondents from making any assessment against the petitioner by including such Inter-State `specified sales' in the taxable turnover.

(2.) It is contended by learned counsel for the petitioners that under the provisions of the Gujarat Sales Tax Act by considering lease agreements to be specified sales, tax is being imposed on such transactions resulting in sales in the course of interstate trade and commerce where lease agreement in respect of leasing out assets outside the territory of Gujarat results in movement of such goods. He relies for that purpose on the provisions of Sections 2(30C), 2(36A) and Section 3A. He further urges that Section 2(28) which defines term `sale' and Section 87 which make certain sales and purchase not liable to tax does not exclude the applicability of the Act on specified sales which may result in sale in the course of inter-state trade and commerce.

(3.) Having carefully considered, we are of the opinion that the contention is without any substance.