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2005 DIGILAW 87 (GAU)

Prabhat Marketing Co. Ltd. v. State of Assam

2005-02-03

RANJAN GOGOI

body2005
JUDGMENT Ranjan Gogoi, J. 1. Heard Mr. G.N. Sahewalla, learned Senior Counsel for the petitioner and Mr. K.N. Choudhury, learned Additional Advocate-General, Assam. 2. By the Assam General Sales Tax (Amendment) Act, 1998 (Assam Act 8 of 1998), Section 8A was inserted in the principal Act to provide for levy of additional tax on a dealer on his taxable turnover at 10 per cent of the tax payable by him in cases where the turnover of a dealer exceeds Rs. 3 lakhs. Sub-section (3) of Section 8A, as inserted by the amendment of 1998, however, provided that a dealer shall not be entitled to collect any sum on account of additional tax payable by him from the purchaser. Sub-section (3) of Section 8A was deleted with effect from June 1, 1999 by Assam Act (15 of 1999). The challenge herein is with regard to the validity of the Sub-section (3) of Section 8Aduring such time the aforesaid provision remained in force. 3. The contention advanced on behalf of the petitioner, in support of the challenge made, is that in view of the provisions of Sub-section (3) of Section 8A, the levy of additional tax amounts to a direct tax imposed on the income of a dealer and therefore, the power to levy such additional tax would be beyond the power of the State Legislature under entry 54 of List II of the Seventh Schedule to the Constitution. 4. Controverting the submissions advanced on behalf of the petitioner, Shri K.N. Choudhury, learned Additional Advocate-General, Assam has submitted that the question raised is no longer res integra having been settled by the apex Court in J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh and S. Kodar v. State of Kerala. A reading of the later judgment of the apex Court makes it crystal clear that the contention advanced on behalf of the petitioner in the present case has been expressly negatived by the apex Court in a similar challenge with regard to the validity of an identical provision contained in the Tamil Nadu Additional Sales Tax Act (Act 14 of 1970). In S. Kodar v. State of Kerala, the apex Court, after consideration of the decision in J.K. Jute Mills Co. In S. Kodar v. State of Kerala, the apex Court, after consideration of the decision in J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh, and another judgment of the apex Court in Konduri Buchirajalingam v. State of Hyderabad, reiterated the view that legal incidence of a tax on sale is on the seller and though, according to the accepted notions, such incidence is normally passed on to the buyers, the same would not be an essential characteristic of sales tax and it cannot be understood that the seller must have the right to pass it on to the buyer. 5. In view of the law laid down by the apex Court in the decisions noted above, the challenge made in the present writ application must be held to be legally untenable. Accordingly, I find no merit in this writ application. It shall, therefore, stand dismissed. However, having regard to the facts and circumstances of the case, there shall be no order as to costs.