SRI SAILEN KONWAR DUTTA Vs. STATE OF ASSAM

JUDGEMENT

(1.) The constitutional validity of Explanation (ii) to Section 8(1)(a) of the Assam General Sales Tax (Amendment) Act, 2002 and the legality of (i) the assessment order dated 30-7-2004 of the Superintendent of Taxes, Unit-D, Assam (respondent No. 3) assessing an amount of ' 1,25,46,326/- (ii) the assessment order bearing the same date assessing an amount of ' 7,25,034/- and (iii) the assessment order bearing the same date assessing an amount of ' 99,297/- for payment by the petitioner by way of sales taxes due and the accrued interests thereon for the period between 1-4-2002 and 31-3-2003 issued by the Superintendent of Taxes, Unit-D, Guwahati (respondent 3) on the basis of best judgment assessment are called into question in this batch of three writ petitions filed by the same petitioner.

(2.) As there is virtually a common question of facts and of law in the three writ petitions, suffice it to refer to the controversy involved in WP(C) No. 7807 of 2004 and our decision thereon will govern the remaining cases. The case of the petitioner in WP(C) No. 7807 of 2004 is that he is carrying on the business of contractual works under various Departments of the Government of Assam and the Central Government through his proprietorial concern, namely, M/s. S.D. Enterprise having its office at Bharali Complex, G.S. Road, Guwahati. The Government of Assam, through the open tender process and in accordance with the provisions of the Assam Excise Rules, 1945, awarded the contract for wholesale supply of potable alcohol/rectified spirit (Grade) to the Excise Warehouse located at Jorhat for a period commencing from 13-9-2000 to 12-9-2003, for which the agreement dated 7-9-2000 was executed by him with the Government of Assam. This was followed by the issuance of License at Annexure-B to him so as to enable him to carry out the terms of the said agreement. Immediately after execution of this agreement and the issuance of the license in this behalf, he started importing potable alcohol/rectified spirit from different distilleries to the Excise Warehouse, Jorhat at his own cost and against payment of the cost price of the country spirit. Thereafter, a Gazette Notification bearing dated 10-5-2002 (Annexure-H) was issued by the State-respondents notifying the Assam General Sales Tax (Amendment) Act, 2002, which came into force immediately, to the effect that in the case of country spirit mentioned in serial number 27A of Schedule-II, the licensed contractor who sells or supplies such item to a licensed retail vendor shall be deemed to be the first point seller who shall be liable to pay tax on the sale price of the item as defined in clause (34) of Section 2 including still head duty payable thereon . It was further provided therein that the retail vendor while depositing the cost price and duty shall also deposit the tax payable under the Act in the designated Bank by challan and hand over one copy of the challan to the contractor. It is another matter that another Notification was issued on 3-5-2003 notifying the Assam General Sales Tax (Amendment) Act, 2003, which substituted the impugned provision herein thereby making the Officer-in-Charge of the country spirit warehouse, instead of the licensed contractor, liable to pay the said tax: this amendment came into force immediately. Following the impugned notification dated 10-5-2002, the respondent No. 5 vide his letter dated 19-3-2002 (Annexure-G) informed the Superintendent of Excise, Jorhat, inter alia, that the Government had imposed sales tax surcharge @ 20% on IMFL/country liquor with effect from 19-2-2002, and the sale tax surcharge was payable on any country spirit issued from the Excise warehouse and the same is to be deposited in the Government Treasury in the appropriate Head of Account with a request to instruct the retail licensees to deposit the sale tax, who had received stock on or after 19-2-2002. A copy of this letter was also forwarded to the Officer-inCharge, Excise Warehouse, Jorhat.

(3.) Pursuant to the said Notifications dated 10-5-2002 and 10-5-2002, the Sales Tax Department, Government of Assam started demanding payment of sales tax from the petitioner on account of the sale of the country spirit transported by him as indicated earlier. Contending that the contractual assignments undertaken by him in transporting the country spirit did not constitute a sale exigible to sales tax but is only a transportation contract, he approached the Commissioner of Excise, Assam (respondent 5) for appropriate action. The respondent No. 5 accordingly by his letter dated 23-7-2002 (Annexure-I) informed the Commissioner and Secretary, Government of Assam in the Excise Department that the spirit supply contractors were not supplying country spirit directly to the licensed retail vendors and, as such, they were not required to realise sales tax and the sales tax is to be paid by such vendors and deposited with the Treasury with the further information that the Officer-in-Charge of the Warehouse would issue the spirit from bottling plant after verification of Treasury Challan for sales tax and forwarded a copy of the same to the respondent No. 2 for information and necessary action. Subsequently, the respondent No. 5 by his letter dated 12-9-2002 (Annexure-J), inter alia, informed the respondent No. 2 that sales tax was to be realized from the lessees of country spirit, but the practice of issuing Road Permits to contractors was still in vogue thereby implying the liability of contractors to pay sales tax and, therefore, to remove possible confusion, had requested him to issue necessary orders for allowing the contractors to bring spirit from outside on the strength of export and import permits issued by the Excise Authority only and to exempt the practice of issuing Road Permits to these contractors. Thereafter, the Joint Commissioner of Taxes, Assam by his letter dated 13-9-2002 directed the respondent 3 to allow the vehicles of the contractors carrying the consignment of spirit on behalf of the State of Assam to cross the Check Gates subject to verification of documents and ensuring that the goods belonged to the Excise Department of Assam. The net effect of the said letters dated 12-9-2002 and 13-9-2002 is that the authorities had stopped demanding payment of sales tax by the petitioner in connection with the said sales and that the petitioner accordingly submitted monthly supply statements/returns of country spirit without enclosing any sales tax deposit challans to the respondent No. 3.