BEHUBAR CO LTD Vs. COMMISSIONER OF TAXES

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India for a writ in the nature of mandamus, certiorari and also for other suitable writs or order. It arises out of three assessments made under the Assam Sales Tax Act, 1947. The three periods of assessments are :- (1) from 1st April, 1951, to 30th September, 1951; (2) from 1st October, 1951, to 31st March, 1952; (3) from 1st April, 1952, to 30th September 1952. In respect of these periods the petitioner was assessed on certain items of turnover amounting to Rs. 50,823, Rs. 1,05,685 and Rs. 1,73,820 respectively. The turnover in each case was from tea chests and machine parts which were purchased at calcutta by the petitioner's head office and despatched to the petitioner in Assam for use in its business, namely, manufacture and sale of tea. The assessments were made under the second proviso to section 2(12) of the Assam Sales Tax Act, 1947, which provides that any use by a dealer from his stock of any goods liable to tax under the Act shall be deemed to be a sale.

(2.) NOTICES of demand were served on the petitioner. The tax was due to be paid only on or before 23rd october, 1953. It is alleged that the notices of demand were mislaid in the Calcutta office of the petitioner and therefore an application was made for extension of time for appeals under the second proviso to section 30(1) of the Assam Sales Tax Act. The Superintendent of Taxes informed the petitioner that the question whether delay could be condoned could be considered only when the appeals were filed. On 22nd February the petitioner filed three appeals before the Assistant Commissioner of Taxes. These appeals were dismissed on 30th July, 1954, on the ground that they were barred by limitation. The Assistant Commissioner did not go into the merits of the controversy. The order, it is said, was passed without hearing the petitioner. He then filed three petitions of revision before the Commissioner of Taxes. These petitions were rejected on 18th May, 1956. The Commissioner came to the conclusion that the order rejecting the appeals was correct. But he did not dispose of the revision petitions only on that ground. He observed further as follows :-

(3.) THE learned counsel for the petitioner has argued that the second proviso to section 2(12) of the Act is ultra vires the Government of India Act, 1935, and the Constitution of India, 1950, inasmuch as Entry 48 of List II to the Seventh Schedule to the Government of India Act, 1935, and Entry 54 of List II of Seventh Schedule to the Constitution authorise the State Governments to impose tax only on sales and not on the use of goods. He has argued first that the word "sale" in the relevant entries of the two Constitution Acts has a well-defined meaning and mere use does not fall within the scope of the expression. The power conferred on State Legislature cannot be enlarged or added to by widening the scope of the expression "sale" for the purposes of any taxation measure. The assessments are illegal and void inasmuch as the provision under which they purport to have been made involves an excessive use of the legislative power by the State Legislature. The learned counsel has also argued that the petitioner can be exonerated from the apparently illegal levy only by suitable writs. He has no other remedy available to him.