WOOD ENTERPRISE Vs. STATE OF ASSAM AND ORS.

JUDGEMENT

(1.) IN the present writ application, the petitioner has challenged not only the legality of the show cause notice, dated March 3, 2006, issued by the Assistant Commissioner of Taxes, Tinsukia, but also the vires and validity of Section 8(3)(iv)(a) of the Assam General Sales Tax Act, 1993 (in short, "the Act of 1993") on the ground that Section 8(3)(iv)(a) is beyond the legislative power and competence of the State.

(2.) THE material facts, in brief, are thus : The petitioner is engaged in sale and supply of electrical goods and it executed various works contract with the railways and other public bodies. The petitioner submitted, under the Act of 1993, its return of turnover, in respect of not only supply of goods and services, but also in respect of works contract for the assessment years 2002 -03 and 2003 -04. The Superintendent of Taxes, Tinsukia, upon verification of the records of the petitioner, assessed, vide assessment orders, dated October 18, 2004 and March 11, 2005, the tax liabilities of the petitioner for the assessment years 2002 -03 and 2003 -04, respectively and issued notices of demands accordingly. The petitioner complied with the notices of demands, so issued. However, subsequent thereto, the Assistant Commissioner of Taxes, Tinsukia, vide notice, dated March 3, 2006, informed the petitioner that there was an irregularity in allowing deduction of turnover amounting to Rs. 57,96,189 used in works contract. The petitioner was, therefore, directed to show cause as to why the assessment for the assessment years 2002 -03 and 2003 -04 should not be revised and interest should not be levied. Being aggrieved by the said notice, the petitioner has instituted the present writ proceeding challenging, as already indicated hereinabove, the said notice as well as the provisions of Section 8(3)(iv)(a) of the Act of 1993, as the same stands amended with effect from October 19, 2001.

(3.) IN so far as challenge to Section 8(3)(iv)(a) of the Act of 1993 is concerned, Mr. Gupta submits that the amendment made, with effect from October 19, 2001, that the turnover in relation to declared goods purchased locally, in the State of Assam, on payment of tax, are only to be allowed as deduction from gross turnover of works contract is beyond the legislative powers of the State and the same cannot be given effect to. Mr. Gupta submits that since the amendment is ultra vires the Constitution of India, the same is liable to be declared ineffective and the same is liable to be suitably read down. Mr. Gupta, in support of his contention, relies on a decision of this Court in Blue Star Limited v. State of Assam W.P. (C) No. 6272 of 2000, decided on April 23, 2003 Reported in, [2006] 146 STC 432 (Gau), wherein it has been observed that the absence of power of the State authority to levy tax on goods brought into the State in course of inter -State trade and commerce is not in dispute. Relying on this decision, it is submitted by Mr. Gupta that the amendment made in Section 8(3)(iv)(a) is illegal and ultra vires.