CENTUARY ECKA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) The appellant, M/s. Centuary Ecka, Jodhpur, is a duly registered partnership firm under the Indian Partnership Act, 1932, having its registered office at 182, Balniketan Road, Jodhpur, and its branch office at Pali. This firm is also registered as a dealer under the provisions of the Rajasthan Sales Tax Act, 1954 (hereinafter, for short, "the Rajasthan Act") as well as under the Central Sales Tax Act, 1956 (hereinafter, for short, "the Central Act"). This firm is doing business in purchasing and selling of packing materials, that is, waterproof paper (bituminised paper), the PVC bags and poly propylene bags, etc., at Jodhpur as well as at Pali. During the financial year 1978-79, the appellant-firm effected sale of waterproof paper only worth Rs. 2,32,074.50 at its head office at Jodhpur and worth Rs. 25,757.10 at its branch office at Pali and it charged sales tax from the customers at 4 per cent treating them as packing material and deposited the tax amount accordingly with the State exchequer. During the same financial year, the appellant-firm effected sales of PVC bags worth Rs. 27,353 and of poly propylene bags worth Rs. 7,999.85 at Jodhpur and further effected sale of poly propylene bags worth Rs. 15,503.61 at its branch office at Pali and charged the sales tax at the same rate of 4 per cent and deposited the tax accordingly with the Government exchequer. The Assistant Commercial Taxes Officer, Jodhpur, made assessment under Section 10(3) of the Rajasthan Act for the financial years 1978-79 and 1979-80, on February 28, 1984 and after having gone through the books of account, purchases and sales vouchers, etc., maintained by the appellant-assessee, the turnover from the sale of waterproof paper (bituminised paper), PVC bags and poly propylene bags were assessed to sales tax at 4 per cent in accordance with the rate of tax prescribed for these goods by the State Government by its Notification No. F. 2(8)FD/Gr. 1V/75-9 dated July 1, 1975. However, on the basis of an audit report, the Assistant Commercial Taxes Officer, Jodhpur, on May 27, 1985, issued a notice under Section 12 of the Rajasthan Act fixing date of hearing as June 13, 1985, and stating that the turnover from the sale of waterproof paper, PVC bags and poly propylene bags during the financial years 1978-79 and 1979-80 should have been taxed respectively at 7 per cent and 8 per cent instead of 4 per cent and required the appellant-firm to show cause why the difference of tax calculated and leviable and interest under Section 11B of the Rajasthan Act may not be recovered. By these notices the Assistant Commercial Taxes Officer, Jodhpur, proposed to create an additional demand of Rs. 7,735 and Rs. 1,525 in respect of the difference of tax and of Rs. 7,889.36 and Rs. 1,650 in respect of interest of the sale effected during the financial year 1978-79 and for the financial year 1979-80, it proposed to create the additional demand of Rs. 4,434 in 'respect of difference of tax and of interest amounting to Rs. 3,725.12 under Section 11B of the Rajasthan Act. The appellant-firm submitted reply to the show cause notice dated May 27, 1985, issued under Section 12 of the Rajasthan Act, contending that the waterproof paper was either a form of craft paper or bituminised packing material and further that PVC bags and poly propylene bags were polythene and alkathene packing materials as well as plastic packing materials and were covered under item No. 8(g) of the aforesaid State Government notification dated July 1, 1975. The butter paper was also packing material. Despite that the Assistant Commercial Taxes Officer (respondent No. 2) made the reassessment under Section 12 of the Rajasthan Act and issued demand notices exhibits 6 and 7 raising additional demand of tax with respect to the difference of sales tax paid and payable and also for interest. This additional levy and demand was challenged by the appellant by filing S. B. Civil Writ Petition No. 1828 of 1985 in this Court on August 13, 1985 which was dismissed summarily by a learned single Judge of this Court on October 7, 1985 and it is against the said order of dismissal of Writ Petition No. 1828 of 1985 that M/s. Centuary Ecka, Jodhpur, has filed the present special appeal under Section 18 of the Rajasthan High Court Ordinance, 1949, before the Bench of this Court.

(2.) The learned single Judge, who decided the writ petition, held that an appeal lay to the Deputy Commissioner (Appeals) against the reassessment order of the Assistant Commercial Taxes Officer under Section 13 of the Rajasthan Act. The question whether the goods under consideration were packing material within the meaning of item 8 of the State Government notification dated July 1, 1975 was a disputed question of fact which has to be decided by the assessing authorities and the petitioner had an alternative remedy by way of appeal to the Deputy Commissioner (Appeals) under the Rajasthan Act and, therefore, he did not consider it to be a case for interference under Article 226 of the Constitution. As regards the validity of the provisions contained in Sections 11B, 12, 13, 23, proviso to Section 23-B and Section 23-C, which was also challenged by the appellant in his writ petition, the learned single Judge held that the provisions contained in Sections 11B and 12 of the Rajasthan Act did not suffer from the vice of discrimination or arbitrariness. As regards the validity of Section 23, proviso to Section 23-B and Section 23-C, the learned single Judge held that the question did not arise in that case. He accordingly dismissed the writ petition filed by the appellant summarily on October 7, 1985.

(3.) Mr. Bilam Chand Mehta, strenuously contended before us that there was no disputed question of fact involved in the case. On the other hand, a pure question of law was involved as to whether the list of packing materials as given in item No. 8 of the list annexed to the State Government notification dated July, 1, 1975 was exhaustive or illustrative and in case this Court came to the conclusion that the list was exhaustive, then whether the bitumiinised waterproof paper, etc., were covered under the list of packing materials specified in sub-items (a) to (h) of item 8 of the list annexed to the said notification. In such circumstances, it was argued that the alternative remedy was no bar and was not an efficacious remedy in the instant case. It was next contended that the proceedings under Section 12 of the Rajasthan Act had been initiated by the assessing authority on the basis of some audit report made by the audit party. It was urged that the assessing authority had no jurisdiction to initiate the proceedings and to make the reassessment under Section 12 of the Rajasthan Act on a mere change of opinion and that it was legally estopped from initiating the proceedings on the well-settled principles of res judicata. Apart from that the appellant has also challenged the constitutional validity of Section 11B and Section 23 of the Rajasthan Act on the basis of the Supreme Court judgments. Similar other writ petitions have been admitted by this High Court. It was argued that the provisions contained in Section 11B and Section 23 of the Rajasthan Act suffered from the vice of discrimination and arbitrariness and were unconstitutional. On merits it was contended that the list of packing materials given in the State Government notification dated July 1, 1975 was illustrative and not exhaustive and even if the list is held to be exhaustive, the items under consideration were covered by it and were exigible to tax at 4 per cent.