VISHWA VIMOHAN JHA Vs. STATE OF MEGHALAYA

JUDGEMENT

(1.) In this writ petition, the petitioner has challenged the endorsement of the Superintendent of Taxes of the Check Post Byrnihat, Meghalaya made on the petition submitted on behalf of the petitioner (Annexure-III of the writ petition) From the petition it appears that a tourist taxi bearing No. ML-05-7156 carrying a consignment of Sri Vicky Mukhim, Asstt Manager of M/s Colour Calcutta Agent, Kashari Road, Shillong was detained by the Officer on duty on 28.11.94 at 8 P.M. due to non declaration of the said consignment at Byrnihat Check gate. By the said letter Sri Mukhim requested the authority to allow the vehicle to be moved upto to Shillong to enable him to pay the composition money imposed by 30.11.94. The said letter the Superintendent of Taxes make the following endorsement :

(2.) In this writ petition, petitioner submitted inter alia that the Assam Finance (Sales Tax) Act, 1956 as adopted in Meghalaya as Meghalaya Finance (Sales Tax) Act is not applicable so far the business of the petitioner is concerned. Mr. B.K. Deb Roy submitted that the petitioners run a photo colour Lab and undertakes the job of developing photo graphs belonging to customers. He submitted that so far the business of the petitioner is concerned it does not come within the purview of Meghalaya Finance (Sales Tax) Act, 1956 and as such the purported action initiated by the respondents are without jurisdiction. Mr. Deb Roy at the first instance sought to impress upon me that the photography and other cameras and enlargers lenses, films and plastic papers with which the petitioner deals with are not exigible to tax as the same are not taxable items under the law. However, he relented from the aforesaid contention when confronted with item No. 11 of the Meghalaya Finance (Sales Tax) Act, 1956. Under the Act taxable goods "means such goods as are specified in the Schedule attached to the Act and item No. 11 of the schedule covers photographic and other cameras and enlargers lenses, films and plates and other parts. The argument of Mr. Deb Roy was further supplemented by Shri S.P. Sharma, learned counsel for the petitioner. According to Mr. Sharma. According to Mr. Sharma, the petitioner runs a photo colour lab and under takes the job of developing photographs belonging to customers, hence the copy right of the photographs always belongs to customers and it does not have any marketable value. Mr. Sharma also challenges the action of the respondents to recover composition money from the petitioner as disclosed by the endorsement of the Superintendent of Taxes. Taxation checkgate dated 29.11.94 Mr. Sharma submits that coercing Sri Vicky Mukhim the letter dated 29.11.94 was extracted from Sri Mukhim and as such that letter of Shri Vicky Mukhim is not binding on Sri Vicky Mukhim or to the petitioner. Mr. Sharma, further submits that the attempt to realise composition money from the petitioner is illegal and without jurisdiction and as such an appropriate writ be issued quashing the direction contained in the endorsement of the Superintendent as per Annexure-III. Mr. sharma also submits that since the Act in question is not applicable to the petitioner so much so he does not indulge in the sale, the impugned actions of the respondents are illegal without jurisdiction and liable to be quashed. He submitted that the endorsement of the Sales Tax Officer Incharge of the Checkpost has seriously affected the Fundamental right of the petitioner to carry on his occupation, trade and business and as such violative of the Article 19 (1) (g) of the Constitution of India. Mr. Sharma streneously submits that the negatives of the Film are returned to the owner (customers) the films those are developed has no value to others and as such those photographs have no commercial value. According to the learned counsel all the elements of a sale under the Act is absent as such question of sale by the petitioner does not arise. Mr. Sharma in support of his argument has referred the following decisions : 1. Raja Bhairabendro Narayan Bhup -Vs- Superintendent of Taxes, Dhubri, AIR 1957 Assam -179. 2. Matadin -Vs- Commissioner of Sales Tax, (1965) 16 STC 869. 3. Senairam Doonger Mal -Vs- State of Assam, AIR 1962 Assam 98 4. Jai Narayan -Vs- Asstt. S.T.C. (1957) 8 STC -795. 5. Sanjeev Coke Mfg. Co -Vs- Bharat Coking Coal Ltd. A.I.R.1983 S.C. 239. 6. State of Bombay -Vs- United Motors (India) Ltd. (1953) 4 STC 133 (SC) ;: AIR 1953 SC 252 : State of Madras -Vs- Gannon Dunkerley & Company, AIR 1958 SC 560 : (1958) 9 S.T.C. 353 (SC) 7. M/s Studio Sen & Sen -Vs- The State of Tripura, (1989 (2) GLJ 49).

(3.) Mr. Kynjing, learned counsel on behalf of the respondents 1,2 and 3 submitted that whether the petitioner indulging sale of photographic articles within the meaning of Meghalaya Finance (Sales Tax) Act, 1956 is out and out a question of fact which cannot be examined by this Court under Article 226 of the Constitution of India. He seriously disputes the contention of the petitioner that no sale takes place in the business of the petitioner. He submits that the writ petition is pre-mature and instead of approaching to this Court, the writ petitioner could have approached the appropriate authority by way of representation and raise all the issues of facts and law which could have been decided by the authority of first instance by considering the materials on record. Mr. Kynjing submits that the State of Meghalaya set up a check post at Byrnihat under Section 33A of the Meghalaya Finance (Sales Tax) Act, 1956 to prevent evasion of taxes payable under the Meghalaya Finance (Sales Tax) Act, 1956. Mr. Kynjing took me to the affidavit-in-opposition and referred and relied the factual statement of facts made by the Department. According to respondents photo paper is taxable in Meghalaya under Section 3 of the Act. The Supply of paper by the firm for developing and printing photographs of customers falls under the definition of business as per clause (i) of sub-section 1 (B) of Section 2 of Meghalaya Finance (Sales Tax) Act. The execution of the works by the petitioner for the customers is purely a works contract and in this instant case the transfer of photo paper is a sale. According to the department photo paper is goods involved in execution of the works contract which is taxable in Meghalaya. According to the respondents the petitioner carries goods in Meghalaya and in respect of such business he is deemed to be a dealer for the purpose of Meghalaya Sales Tax Act as amended. The respondents also state that the petitioner is carrying on business of taxable goods, but refused to register himself as a dealer which is in total contravention of the Meghalaya Finance (Sales Tax) Act, 1956. Mr. Kynjing also submits that after the Constitution (Forth sixth Amendment) Act, 1982 and the Meghalaya Finance (Sales Tax) (Amendment) Act, 1985 the decision of the Supreme Court in State of Madras-Vs- Dunkerly & Co AIR 1958 S.C. 560: (1958) 9 S.T.C. 353 will not be applicable in the interpretation of a law. The object of new definition introduced by the Forty Sixth Amendment is to enlarge the scope of tax on sal or purchase of goods "Where ever it occurs in the Constitution to include the transfer, delivery or supply of goods whether as goods or in some other form) Mr. Kynjing further submits that relief under Article 226 of the Constitution is an equitable relief and the petitioner who has violated the law is not entitled to invoke the equitable jurisdiction and on that count alone, the writ petition is liable to be dismissed. The Supreme Court held in the State of Madras -Vs- Gannon Dunkerley and Co(Madras) Ltd. (supra) that a works contract was an indivisible contract and the turnover of the goods used in the execution of the works contract could not, therefore, become exigible to sales tax. With a view to over come the effect of the said decision, the Parliament amended Article 366 of the Constitution by introducing sub-clause (b) of clause (19-A). Sub-clause (b) of clause (29-A) states that 'tax on the sale of purchase of goods' includes among other things a tax on the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract. It includes also a tax on transfer property in the goods (whether as goods or in some other form) involved in the execution of a works contract. It refers to a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. The emphasis is on the transfer of property in goods (whether as goods or in some other from ). The letter part of clause (29-A) of Article 366 of the Constitution makes the position very clear. While referring to the transfer, delivery or supply of any goods that takes place as per sub-clauses (a) to (f) of clause (29-A) the latter part of clause (29-A) says that 'such transfer, delivery of supply of any goods' shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Hence, a transfer of property in goods under sub-clause (b) of clause (29-A) is deemed to be a sale of the goods involved in the execution of a works contract by the person making the transfer and purchase of those goods by the person to whom such transfer is made. In Builders' Association of India -Vs- Union of India, (1989) 2 S.C.C. 645, the Supreme Court considered the decision of State of Madras -Vs- Gannon Dunkerley and Co. (Madras) Ltd. the relevant portion of paragraph 36 is quoted below :