LexGOVIND SARAN GANGA SARAN versus COMMISSIONER OF SALES TAX AND ORS.
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• J ' ., ' " '985 • ,. ·J. "!· •. ,, 1~ 1 , I -" or \TlC-iD SARAN GANGA SARAN v. t. COMMISSIONER OF SALES TAX AND ORS. , . April 26;' 1985 .. (R.S. PATHAK AND E.S.,VENKATARAMIAH, JJ.] Central Sales Tax Act, ss,,14 and 15 read With Bengal Flnanc~ ,1(Sales Tax) Act 1941, s.5 (2) (a) (ii)-Scope ~/-Goods declared to be oi specfa/,dmport- ance in inter·State trade or commerce-Omission to specify ·the~ single point at , ~which the tax may be leviedr Ejfect of. . ., l The appellant, a registered dealer-under the BeilgalFinance ·(Sales11,Tax) Act 1941 as applied. to the Union Territory of Delhi (for short,·the State>Act) 1:1 used to purchase Cotton· yarn! and sell it to registered dealers, unregistered A , jdea1ers and consumers. He submitted his return of turnover 1under the State Act for the assessment year 1968-69 and claimed exeinption in respect.of the ~turn over of sales of cotton tbread on' the ground that it was an exempted item under •1,, Entry 21 of the Second ,Schedule, The Sales Tax: Officer ·held 'that. the saleS were ) ::liable to tax as the same were effected in respect of cotton yarri.1)The 1a.ppe11ant ultimately .went in revision to the Financial ··Commissioner who·proceedingon the baSis that the sales were in respect of cotton yarn., ·which was a. declared ',~~ :item under s.14 of the Central Sales Tax Act aHowed the··revisio.n ·petition hold- ing that they could not be subjected to sales tax because. 'one of the 1 roilditions ·, 11 ~Pr.c;:scribed. by s.15 of that· Act ·had not been complied with,. that is to: say, the ~ t,law. had. omitted to prescribe the single point at .which the levy ·could.·aJone be imposed. Aggrieved by the order of the Financial Commissioner, the Revenue •. 1 filed a writ petition in the High Court which, relying on the .construction placed ~. '"'b'y it on sub-cJause (ii) of cL(a) of s.5 in Fitwell Engineers v.- Financial·Commis- sloner Delhi Admn. (1975) 35 S.T.C; 66, allowed the petition holding that the ·~ · single point in a series of sales is the sale made by the last registered dealer , among successive dealers when he ·sold the goods to an unauthorised dea !er or a consumer. Hence this Appea1. " Allowing the Appeal, ·.... :HELD : 1. The compon·ents which enter· into the Concept of cl· ta:ii: are '• well known. The first is the chaiacter of the imposition known by its 'nature which· prescribes the taxable ~vent attracting the levy, the second is a clear 'indi- , ·· · cation of the person on whom the levy is imposed and who is obliged to pay the ' '·tax, the third is the rate at which the tax is imposed, and the fourth is the mea. I· A 'B Jc 'D E • F G ' ··sdre or vaJue to which the rate will be applied for computing the' tax 'liability. If ' H A B c D E p 986 SUPREME COURT REPORTS [1985] 3 s.c.a. tJlese components are not clearly_ and defi~itely aScertainable it.-.is difficult to Say that the levy exists in point of law;·_ -Any uncertairity or vagueness in the legis. latlve scheme defining any of those components of the levy will be fatal 10 it& validity. [ 900D·EJ , , 2. Where the turnover of goods declared to be of special importance in inter .. State trade or :commerce under s. 14 of the Ce~tral Sales Tax Act is subjected to sales tax ·law of a St<i.te, section 15 prescribes the maximum ·rate at which such tax may be imposed and requires that such tax shall not be levied at ' more than one point. The two conditions ·,have been imposed in order to ens~re that inter-State trade or commerce in sUch EoOds is not hampered by heavy taxation within the State occasicined by an excessive rate of tax or by rnult• point taxation. Section 15 enacts restrictions and <:onditions which are essen. tial to the validity of an impost by the State on such goods. If either of the two ~".cbnditions are not satisfied, the· impost ~ill be invaid. Now in order that tax should '·not be levied at more than one" stage it is i1nperative that the sales tax Jaw of the State should specify either expressly or by necessary implication the single point at which .the tax· may be levied. Alternatively, it may be enlpower a statutory authority to prescribe such single point.for the purpose. Where such point ·is not prescribed, either by .the statute ·or by the statutory delegate, no - compliance is possible with s. 15. The single point at which the tax ·may be imposed must be a definite ascertainable point So that both th
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