S B GURBAKSH SINGH Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THIS judgment will dispose of Civil Writ Petitions Nos. 305-D, 436-D, 540-D and 556-D of 1959. The facts of all the petitions need not be set out as the result depends on a common question arising in all the cases, namely, the validity of Rule 28 of the Delhi Sales Tax Rules, 1951. This rule was, however, omitted from 11th November, 1959. The learned counsel for the parties have agreed that whatever be the decision in Civil Writ No. 540-D of 1959, it will cover the other writ petitions. I am, therefore, confining myself to the facts of Civil Writ No. 540-D of 1959.

(2.) THE petitioner is a building contractor carrying on the business of execution of building contracts in the Union Territory of Delhi. For the year 1954-55 the petitioner was assessed to sales tax of Rs. 13,945-14-0 on part of the payments received by him on account of the execution of various building contracts. Besides that, a penalty of Rs. 200 was also imposed on the petitioner by an order of the Sales Tax Officer dated 8th December, 1955, for nonfiling of returns. Sale price liable to sales tax was determined in accordance with Rule 28 of the Delhi Sales Tax Rules, 1951. After various proceedings by way of appeals and revisions the matter was sent back to the Sales Tax Officer to reexamine the case, who, with respect to the year 1954-55, determined the sale price in accordance with Rule 28. It is not disputed that in case Rule 28 is held ultra vires, the assessment order will have to be quashed. It is further alleged in the petition that the Assessing Authority proposes to make assessments for the years 1955-56 and 1956-57 also in accordance with Rule 28. Rule 28 is in the following terms :in computing the sale price for the carrying out of any such contract, as is referred to in Sub-Clause (i) of Clause (h) of Section 2, a dealer may deduct from the amount payable to him as sale price for the carrying out of any contract: (1) in the case where the registered dealer produces to the satisfaction of the appropriate Assessing Authority evidence showing the cost of materials and the cost of labour used in respect of such contract, the sum obtained by multiplying the amount so payable by Y/x+y where X is the cost of materials used in the execution of the contract and Y is the cost of labour employed ; or (2) in other cases, the following percentages of the amount payable, namely : (a) in the case of an electrical contract-20 per cent. (b) in the case of a structural contract-30 per cent. (c) in the case of sanitary or gas contract-33 per cent. (d) in the case of overhaul or repair of any motor vehicles-60 per cent.

(3.) THE contention of the petitioner is that Rule 28 is invalid for the reasons given in the various decisions mentioned hereinbelo and also for the reason that there is a sweeping delegation of legislative power. The decisions relied upon are : (1) Pandit Banarsi Das v. State of Madhya Pradesh and Ors. [1955] 6 S. T. C. 93 (2) C. Damodaran v. The Agricultural Income-tax and Rural Sales Tax Officer, Devicolam and Ors. [1956] 7 S. T. C. 417 (3) Jubilee Engineering Co. Ltd. v. Sales Tax Officer, Hyderabad City, and Ors. [1956] 7 S. T. C. 423 (4) Kenchappa and Ors. v. Sales Tax Officer, Fourth Circle, Bangalore [1957] 8 S. T. C. 329 (5) Bhuramal and Ors. v. State of Rajasthan [1957] 8 S. T. C. 463 and (6) Dukhineswar Sarkar and Bros. Ltd. v. Commercial Tax Officer and Ors. [1957] 8 S. T. C. 478.