TULSIRAM PANNALAL Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THESE Writ petitions under Art. 226 of the Constitution raise common questions of law and are therefore disposed of together by this judgment.

(2.) IN Writ Petition No. 169 of 1957, the petitioner is a firm carrying on business of sugar dealers at Alwar. The case of the petitioner is that it purchased crystal sugar, Khandsari and Guria Shakkar worth Rs. 9,17,696/10/3 in the year 1955-56 from the dealers residing outside Rajasthan but carrying on business in Rajasthan. The aforesaid commodities were brought in Rajasthan by Railway, in motor trucks and other means of transport as detailed in the petition and were delivered to the petitioner for consumption in Rajasthan and later on sold to other persons in Rajasthan. The Sales Tax Officer, Alwar Circle, held the petitioner liable to pay tax amounting to Rs. 12523/4/3 for the Sales Tax on these goods which were purchased by the petitioner from outside dealers. The penalty Rs. 101/- was also imposed for late submission of return and non-payment of tax. A notice of demand for the aforesaid amount was also served on the petitioner. The petitioner has challenged the said assessment order mainly on the ground that the outside dealers must be deemed to be sellers at the first point in the series of sales and they were liable to pay the Sales Tax under the provisions of the Rajasthan Sales Tax Act, 1954 (Act No. 29 of 1954), hereinafter referred to as the Act, and the Rajasthan Sales Tax Rules, 1955, hereinafter referred to as the Rules. The petitioner states that as a purchaser it was not liable to pay any Sales Tax under the relevant law, and, as such, the demand of the aforesaid amount from the petitioner was not under the authority of law. The petitioner prays that a writ of certiorari be issued quashing the order of the Assistant Commissioner, Excise and Taxation, Alwar, dated the 14th of August, 1957 and the Notice of Demand of the same date.

(3.) IN both the writ petitions learned counsel for the petitioners have confined their arguments broadly to two points. The first point is that while the Act came into force on the 1st of April, 1955, the Rules came into force by virtue of Rule 1 on the date of their publication in the Rajasthan Gazette on the 28th of March, 1955, and, as such, the Rules, which had come into force before the Act came into force, had no validity. The second contention is that by force of the definition of 'sale' as given in the Act as it stood at the time of assessment, the outside dealers whether they were carrying on business in Rajasthan or not, were the persons who were liable to pay the sales tax, as under sub-rule (1) of R. 15, it was the first sale in the series of sales which was liable to be taxed. The Rajasthan Sales Tax Assessment and Recovery Validating Act, 1958, is challenged on the ground that it transfers the liability of the outside dealers who sold the goods to pay the tax on to the dealers in Rajasthan who purchased the goods and it offends Art. 14, 19 and 31 of the Constitution.