Venee Corporation v. Commissioner of Commercial Taxes
2001-12-21
KURIAN JOSEPH
body2001
DigiLaw.ai
Judgment :- Kurian Joseph, J. Tax collected is for the State and it has to be remitted as provided under Rules. Under the Kerala General Sales Tax Rules, 1963, the monthly returns are to be submitted before the assessing authority on or before 15th day of every month (10th day in the case of Special Circle). Such a procedure is provided only to facilitate filing of monthly returns along with proof of remittance of tax. The return for the preceding month is to be sublfitted together with proof of payment of the full amount of tax due for the month. In the case of dealers of interstate transport of packing case, splints, and veneers, tea chests, wooden crates, wooden cable, drums and veneers, it was noticed that there was large scale evasion of tax. Hence a direction was issued to pay the tax collected to the assessing authority before the transport of/while transporting those goods. This direction is under challenge. 2. All the petitioners are registered dealers in packing case, splints and veneers, tea chests, wooden, crates, wooden cable, drums and veneers etc. The interstate sale attracts central sales tax. It has to be collected by the dealers from the purchasers. Under S.29(2) of the KG.S.T. Act, the purchasers are entitled to transport goods when the same is accompanied by sale bills. With effect from 17.8.2000 onwards, goods were detained at the checkpost demanding payment of central sales tax as a condition for allowing transport of goods, pursuant to letter dated 17.8.2000 (Ex!. PI in D.P. No. 2755012000-D) issued' by the Commissioner, Commercial Taxes, Thiruvananthapuram which reads as follows: "It has come to notice that large scale evasion of tax is being practised by a number of dealers 'in packing case, splints, and veneers, tea chests, wooden crates, wooden cable, drums and veneers. It is therefore directed that interstate transportation of the above commodities shall be only on the strength of Departmental Delivery notes and that endorsement of payment of advance tax in the Delivery Note shall be insisted for the transport, by all checkposts and inspecting officers. The advance tax is to be collected by the assessing authority taking in to, account the invoice bill value and the market price". 3. As a matter of fact, the letter issued by the Commissioner of Commercial Taxes, dated 17.8.2000 (Ext.
The advance tax is to be collected by the assessing authority taking in to, account the invoice bill value and the market price". 3. As a matter of fact, the letter issued by the Commissioner of Commercial Taxes, dated 17.8.2000 (Ext. P1 in D.P. No. 2755012000) was modified subsequently on the representation of the petitioners' association as per circular dated 4.9.2000 (Ex!. R(b)in D.P. No. 2755012000) issued by the Commissioner of Commercial Taxes, Thiruvananthapuram. 4. The petitioners contended that Ex!. PI letter mentioned above is issued without jurisdiction. It is also contended that the goods accompanied by sale bill cannot be detained at the checkposts under S.29(2) of the KG.S.T. Act on the ground of nonpayment of advance tax. Yet another contention was that the department acted in an unreasonable manner, violating Art.14 of the Constitution of India. 5. S.3(IA), S.29(2), 29A(I) & (2) & 29(2B) of the K.G.S:T. Act, 1963 and S.9(2) of the Central Sales Tax, 1956 are the relevant statutory provisions to be referred to.
Yet another contention was that the department acted in an unreasonable manner, violating Art.14 of the Constitution of India. 5. S.3(IA), S.29(2), 29A(I) & (2) & 29(2B) of the K.G.S:T. Act, 1963 and S.9(2) of the Central Sales Tax, 1956 are the relevant statutory provisions to be referred to. S.3(1A) reads as follows: "The Board of Revenue shall have superintendence over all officers and persons employed in the execution of this Act and the Board of Revenue may; (a) call for returns from such' officers and persons; (b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such officers and persons; (c) issue such orders, instructions and directions to such officers and persons as it may deem fit, for the proper administration of this Act" S.29(2): "(2) No person shall transport within the State across or beyond the notified area any consignment at-goods exceeding such quantity or value as may be prescribed by any vehicle or vessel, unless he is in possession of, (a) either bill of sale or delivery note or way bill or certificate of ownership containing such particulars as may be prescribed, and, (b) a declaration in such form and containing such particulars as may be prescribed when the vehicle or vessel enters or leaves the State limits." S.29A: "Procedure for inspection of goods in transit through notified areas: (1) The driver or other person in charge of a vehicle or vessel shall stop the vehicle or vessel and any person referred to in sub-s.(2A) of S.29 shall stop or, the case may be stop the animal at any place within a notified area when so required by the officer in charge of that notified area, or any' other place when so required by any officer empowered by the Government in that behalf, for the purpose of enabling such officer to verify the documents required by sub-so (2) bf S.29 to be in the possession of the person transporting the goods and to satisfy himself that there is no evasion of tax.
(2) If such officer has reason to suspect that the goods under transport are not covered 'by proper and genuine documents (in cases where such documents are necessary) or that any person transporting the goods is attempting to evade payment of the tax due under this Act, he may, for reasons to be recorded in writing, detain the goods and shall allow the same to be transported only on the owner of the goods, or his representative or the driver or other person in charge of the vehicle or vessel on behalf of the owner of the goods, furnishing security for double the amount of tax likely to be evaded; as may be estimated by such officer." S.29A (2B): "[(2B) If such officer has reason to believe that the tax exigible on the sale or purchase of goods under transport is not paid, or the dealer whose goods are transported is in default of payment of any tax or other amount due under this Act for any period, such officer may, notwithstanding anything to the contrary contained in this Act or the rules made thereunder allow the goods to be transported after realising the tax in respect of the goods transported.
If the driver or the person in charge of the goods or the dealer whose goods are under transport refuses to pay such tax, the goods shall be detained by such officer and shall be dealt within the manner provided in this section as if the transport of goods were an attempt to evade payment of tax due under this Act.]." S.9(2) of the Central Sales Tax Act, 1956 reads as follows: "(2) Subject to the other provisions of this Act and the rules made thereunder the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, including any (interest or penalty) payable by a dealer under this Act as if the tax or (interest or penalty) payable by such a dealer under this Act is a tax or (interest or penalty) payable under the General Sales Tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including, provisions relating to returns, provisions assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references (refund, rebates, penalties) (charging or payment of interest) compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly." 6. A bare reading of S.3(1A) of K.G.S.T. Act, 1963 indicates that the Commissioner (Board of Revenue) is competent to issue orders, instructions and directions to the offices and persons for the proper administration of the Act. The purpose of the Act is the levy and collection of taxes on the sale and purchase of the goods in the State. As far as the levy and proper collection of taxes are concerned: the Commissioner is competent to issue orders, instructions and directions. If the letter (Ext. PI in O.P. No. 2755012000) as modified by Ext.
The purpose of the Act is the levy and collection of taxes on the sale and purchase of the goods in the State. As far as the levy and proper collection of taxes are concerned: the Commissioner is competent to issue orders, instructions and directions. If the letter (Ext. PI in O.P. No. 2755012000) as modified by Ext. R(b) is analysed in the background of S.3(IA), it is crystal clear that the Commissioner acted only within his jurisdiction in issuing appropriate orders or directions for the proper administration of the Act and hence it cannot be said that the Commissioner lacks jurisdiction. S.9(2) of the C.S. T. Act also indicates 'such a source of power. 7. Since Ext P1 in C.P. No. 2755012000 is modified by Ext.R(b) only the following instructions are now in force: "2. Dealers associations have brought to notice that this creates some hardship in the case of dealers in splints and veneers for matches who sell small quantities interstate and where consignments relating to a number of dealers have to be transported in the same lorry. It is also pointed out that since in the case of packing cases, consignments will have to be sent immediately the product is ready remitting tax for each load becomes difficult especially when the date of transport falls on a holiday. 3. In the circumstances, in partial modification of the directions already issued, the following instructions are issued; I)The directions already issued shall not apply in the case of splints and veneers for matches. 2) In the case of dealers in other items who are willing to pay tax in advance for a month, the tax relating to a month may be collected in advance and sufficient number of delivery notes for transportation of goods in a month issued. After the close of the month the quantity of goods transported shall be verified with reference to the delivery notes used and the balance tax, if any payable shall be collected before issuing fresh delivery notes. 3) In the case of sales to outside dealers who are not registered under the CST Act, tax at the rate of 10% will be collected.
3) In the case of sales to outside dealers who are not registered under the CST Act, tax at the rate of 10% will be collected. 4)In cases where sale declared in the delivery note is in favour of registered dealers outside the State and tax at the rate of 4% alone is collected in the bills, the assessing authority will verify whether the sale is actually to registered dealers outside the State. 5) In cases where the sale is found to be not genuine in interstate sale to registered dealers immediate steps will be taken by the assessing authority to realise balance tax and stringent penal action will also be taken". It is sigllificant to note that the modified instructions were issued at the instance of the Association of dealers, including the petitioners and that is not under challenge also. 8. The next contention is centered round on S.29(2). Under S.29(2), if the goods are accompanied by a bill of sale or delivery note or weigh bill or certificate of ownership, containing such particulars as prescribed and declaration in the prescribed form. a person is entitled to transport goods and the detention at checkposts is justified only if the goods are not covered by proper and genuine documents. It is also to be noted that there is sufficient indication in those provisions regarding the steps which could be taken for preventing evasion of tax. It is profitable to refer to the background of the letter (Ex!. PI in O.P. No.27550/2000). It is stated in paragraph 5 of the counter affidavit as follows: "It was noticed that many of the dealers in packing cases where either filing returns showing 'NIL' turnover or when turnover was conceded tax due on turnover was not being paid." Regarding the specific instances, in paragraph 6 of the Counter affidavit, it is stated as follows: "Verification of the declaration in Form No. 27B, filed at the Checkposts showed that the petitioner had used two sets of sale bills. In one set, the name of the firm was printed in. comparatively smaller size letters with words cash/credit bill shown as "Cash/Bill": In the second set of bills, the name of the firm was printed in bold letters with the words cash/ credit bill printed as "Cash/ Credit Bill".
In one set, the name of the firm was printed in. comparatively smaller size letters with words cash/credit bill shown as "Cash/Bill": In the second set of bills, the name of the firm was printed in bold letters with the words cash/ credit bill printed as "Cash/ Credit Bill". In the statement of sales filed along with the returns sales as per one set of bills only were included suppressing the sales as per the second set of sale bills. The petitioner had used bills from the two sets of bills at a time with the same serial numbers but reported turnover as per one set of sale bills only". 9. Various other instances are also referred to in the counter affidavit. It is shocking to note from Ext. R(a) chart in O.P. No. 2755012000, that the dues in respect of 24 dealers come around Rs. 3 crores and it is also to be noted that the Department was not able to realise the said amount from the dealers since all of them were found to be possessed with. no sufficient means. In the background of such large scale evasion of tax it is the duty on the part of the Commissioner to ensure the proper collection of tax and hence the letter (Ext. PI in O.P. No. 2755012000) cannot be faulted at all. After all, as already noted at the out set, the dealers are only asked to remit the tax collected from the purchasers. I do not think that there is' anything unreasonable. S.29 empowers the officers posted at the checkposts to verify the documents accompanying the goods not only to prevent evasion of tax but also 12 ensure proper collection of tax It is not a mechanical duty of merely verifying the documents stipulated under S.29(2). The very verification is with a view to ensure the proper compliance with the provisions of the Act so as to achieve the purpose of the Act. What is now insisted is only the payment of tax collected while transporting the goods and, that too, for the Purpose of avoiding evasion and ensuring proper collection of tax. Hence the insistence is neither arbitrary nor unreasonable. 10. All these apart, there is also another question to be tackled in the background of the doctrine of precedents. The impugned Circular in these Original Petitions was.
Hence the insistence is neither arbitrary nor unreasonable. 10. All these apart, there is also another question to be tackled in the background of the doctrine of precedents. The impugned Circular in these Original Petitions was. the subject matter of the decision reported in M.C. Johnson. Reshma Timbers, Perumbavoor v. The Commissioner of Commercial Taxes & Ors. «2001) 9 KTR 302 (Ker.». The impugned order in that case is Ext. P3. In the said judgment, 'it is stated as follows: "3. As far as Ex!. P3.is concerned, it is an order issued by the Commissioner of Commercial Taxes, dated 17.8.2000, it is observed that there is large scale of evasion of tax by a number of dealers engaged in the business in packing cases. splints and veneers, tea chests, wooden crates, wooden cable drums and veneers and it was therefore decided that interstate transportation of the above commodities shall be on the strength of Departmental delivery Notes and endorsement of payment of advance tax has to be insisted for the transport of goods by all checkposts and by inspecting officers. The advance tax is to be collected by the assessing authority taking into account the invoice bill value and the market price. The petitioner submits that this is beyond the powers of the Commissioner and he is not authorised. 5) As noticed by "me earlier, the demand for security cannot be enforced in a manner so as to detain the goods at the checkposts as it Vas not warranted under S.29A(2B) of the Act. However, the Commissioner cannot be faulted in insisting for security and it will be within their powers to insist that Departmental Deliver>: Notes should be used for the transportation, as there is sufficient indication to show that several dealers had not been always straight forward in their dealings as a averred in the statement filed.1can also find that Ext. P3 could be found as permissible in view of the powers vested on the Commissioner Under S.3(1A)(c) of the K.G.S.T. Act. 6) I do not think that interference in Ext. P3 is therefore warranted. It is only a reasonable restriction on the assessee that he should obtain Departmental Delivery Notes, since it is insisted for securing the interests of the Revenue and for avoiding misuse of facilities. There is no element of harassment as alleged. It also does not run counter to the statute". II.
P3 is therefore warranted. It is only a reasonable restriction on the assessee that he should obtain Departmental Delivery Notes, since it is insisted for securing the interests of the Revenue and for avoiding misuse of facilities. There is no element of harassment as alleged. It also does not run counter to the statute". II. Ramachandran, J. has taken the view that the circular was issued in the interest of Revenue. In other words the same was issued for ensuring proper collection of tax and for avoiding evasion of tax. The learned counsel for the petitioners submit that the view taken by the learned Single Judge in M.c. Johnson, Reshma Timbers's case is in conflict with another decision reported in Rijo JaCob v. The Commissioner of Commercial Taxes & Ors. ((20018 KTR 505 (Ker)) wherein this court held as follows: "7. As already stated, the main question raised in these Original Petitions is as to whether the check post authorities or the other authorities mentioned in S.29 and/or S.29A of the Act have got the power to detain the goods transported from outside the State through the Sales Tax Check Posts and demand advance tax in respect of the consignment for onwards transmission of the same. On a perusal of the provisions of Ss.29 and 29A of the Act, it is seen that the only provision which enables the check post authorities to demand tax for release of the goods under detention is contained in the second proviso to sub-so (2) of S.29A. It provides that where the documents produced in support of the transport of goods evidence defects of a minor or technical nature only and the goods are owned by a dealer registered under this Act, such officer may allow the goods to be transported after realising the tax on the turnover of the goods under transport. The said proviso, as could be seen, can be applied only on satisfying two conditions, viz. (i) the documents produced in support of the transport of goods evidence defects of a minor or technical nature only and(ii) the goods under transport are owned by a registered dealer under this Act.
The said proviso, as could be seen, can be applied only on satisfying two conditions, viz. (i) the documents produced in support of the transport of goods evidence defects of a minor or technical nature only and(ii) the goods under transport are owned by a registered dealer under this Act. From the above it is clear that if the goods under transport are owned by a registered dealer under the Act and the documents accompanying the transport evidence defects of a minor or technical nature only, the check post authorities can realize the tax on the turnover of goods under transport for allowing the said dealer to transport the goods. Of course, S.29A(2B) also enables the check post authorities to collect tax due in respect of the goods under transport if such officer has reasons to believe that the tax exigible on the sale of purchase of goods under transport is not paid, or the dealer whose goods are transported is in default of payment of any tax or other amount due under this Act for any period. The said sub-section, though gives power to the check post authorities to collect tax, the said provision has no application in the instant cases since the taxable event under the Act has not reached. Further, the respondents also do not have a case that the petitioners are defaulters of tax or any other amount due under the Act. The proviso to sub-so (3) of S.29A is also relevant in this context. Sub-so (3) provides that the officer detaining the goods shall record the statements, if any, given by the owner of the goods or his representative or the driver or other person in charge of the vehicle or vessel and shall submit the proceedings along with the connected records to such officer not below the rank of Sales Tax Officer as may be authorised in that behalf by the Government, for conducting necessary inquiry in the matter. The manner of inquiry is provided under sub-so (4) which provides for adjudication of the matter and imposition of penalty in case such officer finds that there has been an attempt to evade the tax due under the Act. It is in this context the proviso to sub-so (3) has significance.
The manner of inquiry is provided under sub-so (4) which provides for adjudication of the matter and imposition of penalty in case such officer finds that there has been an attempt to evade the tax due under the Act. It is in this context the proviso to sub-so (3) has significance. It provides that where tax is collected under the second proviso to sub-s.(2) or under sub-so (2B), no enquiry under this sub-section shall be necessary and the officer detaining the goods shall submit the proceedings along with the connected records to the concerned assessing authority. I have referred to the provisions of the second proviso to sub-so (2) of S.29A and the proviso to sub-so (3) of S.29A only to show that the check post authorities have got the power in specified circumstances to collect tax in respect of the goods under transport and the nature of the collection is only by way of advance tax. It is in view of the proviso to sub-so (3), the tax, if any, collected under the second proviso to sub-so (2) of S.29A acquires the character of advance tax, for if on final assessment of such a dealer it is found that the turnover of the goods under transport is exempted or is otherwise not exigible to tax, the tax, if any, collected will be adjusted towards other dues or in case no demands are due, it will be refunded. So, the contention taken by the petitioners that there is no provision in S.29Aofthe Act enabling the check post authorities to collect advance tax is unsustainable. That does not mean that the respondents can issue any general direction that in cases of transport of live chicken and broiler birds advance tax has to be remitted. Any such general direction issued by the respondents cannot stand in the eye of law. It is only in such cases falling under the second proviso to sub-so (2) of S.29A the check post authorities can realise advance tax. It must also be noted that it is privilege available to a registered dealer provided the defects in the documents accompanying the transport are only minor or technical in nature.
It is only in such cases falling under the second proviso to sub-so (2) of S.29A the check post authorities can realise advance tax. It must also be noted that it is privilege available to a registered dealer provided the defects in the documents accompanying the transport are only minor or technical in nature. I say so because under the main provisions of sub-s.(2)of S.29A the check post authorities can release the goods under the detention only on furnishing security for double the amount of tax likely to be evaded in anyone of the ways specified in clauses (a) to (d)of sub-r.(2) of R.(2)of R.6 or by depositing the amount as prescribed in sub-r.(2) of R.35A of the Kerala General Sales Tax Rules. Of course, the first proviso gives the discretion to the checkpost authorities to allow such goods to be transported on execution of a bond with or without sureties for securing the amount due as. security." 12. Sivarajan, J. is of the view that no general direction is permissible under S.29.. of the Act. But it is not necessary to refer the matter to a Division Bench for reasons more than one. Firstly, it has to. be seen that the former decision in Reshma TImbers' case is in respect of the very same impugned order, whereas the latter decision in Rijo Jacob's case was on a general principle. That apart, there is no discussion in Rijo Jacob's case as to the source of power of the Commissioner under S.3(IA) of the Act or S.9(2) of the C.S.T. Act and the decision centers round only the exercise of power by the departmental officers under S: 29 and. 29A at the. checkposts. It has also to be seen that it was case of undervaluation in the matter of transport of chicken or chicken meat to Kerala and there was a circular on estimate of weight according to size of vehicle and that was under challenge. Thirdly in Reshma TImbers' case the taxable event had already occurred whereas in Rijo Jacob's case, it was a case where the event had not taken place, or the taxable event was outside the State. 13. There is a binding decision on the related issue which unfortunately was not brought to the notice of the learned judges in both cases. Rijo Jacob's case was also not cited before the learned judge I Reshma-TImbers' Case.
13. There is a binding decision on the related issue which unfortunately was not brought to the notice of the learned judges in both cases. Rijo Jacob's case was also not cited before the learned judge I Reshma-TImbers' Case. The Full Bench decision is reported in M.R.F. Ltd. v. Asst. Commissioner 1995 (1)KLT 809 (FB). There the constitutional validity of S.29A(2B) was under challenge. The relevant paragraphs are extracted below. "16. Applying the above relevant principles to the case on hand, bearing in mind the fact that the impugned provision is one incorporated in the Act by way of an amendment, specifically for the purpose of suppressing evasion of payment of tax and as a provision for collection of tax under the Act, it is only just and legal to adopt that meaning of the word payable which would ffectuate the object of the enactment and make the machinery for collection more effective. W e find that adoption of the meaning canvassed for. by the appellants would totally defeat the object for which the provision was incorporated in the Act in as much a sit may enable dishonest dealers who wanted to avoid payment of tax to remove goods beyond reach of the authorities under the Act even before. payment of tax, by using documents forged in the name of bogus dealers or in the name of reputed dealers without their knowledge and thus to avoid payment of tax. If on the other hand payable' is understood as having the alternative meaning of 'a liability to pay at a future time', we find that it will enable the check-post officials to demand and collect tax for payment of which liability has already been incurred on the happening of the taxable event, namely, last purchase in the case of goods on which tax is leviable at the last purchase point, before goods are attempted to be transported outside the State. Such a meaning can illegitimately be assigned to the word 'payable' in the context in which the word is used in the sub-section especially in view of our finding that liability to be assessed for tax and to pay the tax as assessed arises on each sale or purchase of goods.
Such a meaning can illegitimately be assigned to the word 'payable' in the context in which the word is used in the sub-section especially in view of our finding that liability to be assessed for tax and to pay the tax as assessed arises on each sale or purchase of goods. As such, we are of the view that in the context in which the word 'payable' has been used in the sub-section, it should be understood as having the meaning 'liable to pay at a future time'. In that view, we are inclined to accept the contention of the learned Government Pleader that the sub-so (2B) is a special provision which makes the tax payable in the normal course only after assessment, immediately payable, in cases where goods are sought to be transported beyond the limits of the State before assessment and payment of tax in the normal course and authorising officers at the check-post to demand and collect such tax if not already paid. It is a provision which directs payment to tax even before assessment in cases coming within the purview of the sub-section subject to the condition that the tax paid is to be credited to the account of the dealer to be adjusted at the time of assessment. In that sense alone it can loosely be called advance tax. As a necessary corollary, we have also to accept the contention of the appellants that the provision authorises realisation of tax contrary to the normal procedures prescribed of assessment and collection of tax under the Act. 17. If that be the legal effect of the impugned provision, whether it will be bad in law for any of the reasons stated in the Original Petitions and the Memorandum of Appeal is the further question to be considered. In the Light of our find in" that the liability for tax arises on the conclusion of each sale or purchase of goods the provision can be treated as a provision compelling discharge of such legal liability incurred even before assessment in cases coming within the purview of the said sub-section. The procedure prescribed for assessment and collection of tax for which dealers have already become liable by virtue of the charging section on a later date is a procedure prescribed by the legislature for collection of tax under the Act in the normal course.
The procedure prescribed for assessment and collection of tax for which dealers have already become liable by virtue of the charging section on a later date is a procedure prescribed by the legislature for collection of tax under the Act in the normal course. None of the petitioners have seriously disputed the competency or the legislature to change the procedure for assessment and collection of tax levied by the charging. section if so found necessary for the purpose of making the machinery for collection Provided under the Act workable and more effective, Since legislative competence has not been seriously disputed, the only point to be considered is whether the impugned provisions and the circular issued for its implementation are either arbitrary and as such violative of Art.14 or are unreasonable restrictions imposed on the free movement of goods on the course M trade and commerce and as such violative of Art.301 of the Constitution of India. 20. Similarly, the submission that the circular authorises collection of advance tax contrary to sub-s, (2B) and as such is in excess of the powers conferred on the Board under S, 3(lA) of the Act is also unsustainable in law, As we have already indicated, both sub-so (2B) and the circular only authorise collection of tax for which liability has already been incurred unlike the provisions in Ss.190and 20er in respect of the total income anticipated and estimated even before the liability is actually incurred. In the case on hand the liability incurred is only made payable and collectable simultaneously or immediately on the happening of the taxable event and not earlier. As such, as pointed out by the learned judge, it can only be treated as a word used in a loose sense to indicate the distinction between tax payable in the normal course after assessment and the tax payable immediately on incurring of liability 21. In the light of our finding regarding the precise legal effect of the provisions in sub-so (2B), we cannot also agree with the submission of the learned counsel for the appellants that the circular authorises something to be done contrary to the sub-section and that is not in consonance with it.
In the light of our finding regarding the precise legal effect of the provisions in sub-so (2B), we cannot also agree with the submission of the learned counsel for the appellants that the circular authorises something to be done contrary to the sub-section and that is not in consonance with it. The circular in the circumstances can old be considered as one issued for the effective implementation or the authorisation given as per the sub-section and is fully within the powers of the Board under S.3(]A) of the Act " 14. In view of the authoritative pronouncement on the Legislative intent and competency in the matter of Circular, it is not necessary to deal with that aspect. Hence also it is not necessary to place the matter before a division Bench. 15. The petitioners also had another contention that they are discriminated since the instance is only in respect of a few items. There is also an argument that if there are. erring dealers, they can be proceeded against and there need not be general direction. It is now well settled that in fiscal statutes, it is open to the State to follow its own classification and unless it is shown that there is discrimination within a class, the classification is not open to challenge on the ground of violation of Art.14 of the Constitution of India. ,Q the instant case, as already noted from the counter affidavit, the classification is well founded and reasonable. Hence it is not necessary to consider the said contentions. The restrictions introduced are reasonable and are validly made in order to suppress evasion of tax and ensure proper collection of tax. In the result, the Original Petitions are dismissed.