NOOKA RAJU Vs. STATE OF ORISSA

JUDGEMENT

(1.) THE petitioner is a dealer in cement under the Associated Cement Company Limited having its place of business at Berhampur. On enactment of the Orissa Additional Sales Tax Act, 1975 (Orissa Act 24 of 1975) (hereinafter REFERRED TO as the "act"), which came into force with effect from 1st April, 1975, the petitioner became liable to pay additional sales tax according to the provisions of the Act. On account of this additional liability, he has challenged the constitutionality of the Act in this writ application. According to the petitioner, the provisions of the Act put unreasonable restrictions on his fundamental rights and are confiscatory in nature. It is submitted that the Act does not come within the ambit and scope of entry 54 of List II of the Seventh Schedule of the Constitution of India. The Act is also challenged on the ground that it does not permit the burden of additional tax to be passed on to the customer. The petitioner has accordingly prayed that the Act should be declared ultra vires and unconstitutional.

(2.) A counter has been filed on behalf of the State justifying imposition of the additional tax. It is stated the Act does not contravene any of the provisions of the Constitution and that similar Acts passed by various other States in India have been upheld by the Supreme Court and other High Courts.

(3.) MR . Sharma, learned counsel appearing for the petitioner, submitted that imposition of the additional tax under the Act is in excess of the powers of legislation, unconstitutional and confiscatory and that the liability to pay the tax having been fixed on the dealer, it is unreasonable that he should be obliged to pay the tax irrespective of whether he has earned any profit during the year. Mr. Patnaik, learned standing counsel, submitted that similar provisions under the Tamil Nadu Additional Sales Tax Act (14 of 1970) were considered and upheld by the Supreme Court in the decision reported in [1974] 34 STC 73; AIR 1974 SC 2272 (S. Kodar v. State of Kerala ). It is further pointed out that the points urged in the present writ application had been urged before the Supreme Court and had been answered in the following manner :