GAUHATI MOTOR TRADERS Vs. COMMISIONER OF TAXES

JUDGEMENT

(1.) In this petition, the circular/letter dated 16 August, 1993 issued by the Commissioner of Taxes, Assam has been challenged as ultra vires of the provisions of the Assam General Sales Tax Act, 1993 (Act 12 of 1993) with prayer for consequential relief including issue of a writ of mandamus prohibiting the respondents from collecting sales; tax on the second/last sale of component parts of motor vehicles etc. in the State of Assam which were purchased prior to 01.07.1993, i.e. before the Assam General Sales Tax Act, 1993 came into force.

(2.) The petitioner association registered under the Societies Registration Act, 1860 has in its roll 275 members primarily engaged in motor trade and ancillary industries at Gauhati in the State of Assam. The Association is aggrieved by the aforesaid impugned circular whereby the registered dealers have been asked to pay Sales Tax on sale of [goods to unregistered dealers or consumers. The circular reads as follows:

(3.) Dr. A.K. Saraf, learned counsel appearing for the petitioner Association submitted that the Commissioner of Taxes acted beyond his jurisdiction in issuing the aforesaid circular which is ex facie contrary to the provisions of the Act. According to Dr. Saraf, prior to the enactment of the Assam General Sales Tax Act, 1993, the component parts of the motor vehicles and other articles necessary for use in the motor vehicles and trailers were taxable under the Assam Finance (Sales) Tax Act, 1956 at the rate of 12% at the point of first sale in the State of Assam. The Assam General Sales Tax Act 1993 which repealed the Act of 1956 and three other Acts also provided for levy of tax at the point of last sale made on or after 1.7.93 in the State of Assam. But the Act of 1993 do not provide that goods purchased before 1.7.93 on payment of tax under the Act of 1956 shall be subject to payment of tax @6% if the last sale thereof is made on or after 1.7.93 in the State of Assam. According to Dr. Saraf, the impugned circular issued by the Commissioner is, therefore, beyond the scope of the Act of 1993. Mr A.K. Goswami, learned Govt. Advocate, however, argued that the Commissioner was within his competence under the provisions ofthe Act of 1993 to clarify the provisions with regard to levy of tax on second/last sale as provided in the Act. Mr Goswami further elaborated that under the Assam Finance (Sales) Tax Act, 1956, no right was vested with the registered dealers in as much as the provisions for levy of tax at the last point of sale was non-est under the Act of 1956 and as such sales tax has to be paid on the last sale as provided in the Act of 1993.