INTERNATIONAL COTTON CORPN. (P) LTD, versus COMMERCIAL TAX OFFICER, HUBLI & ORS.

Citation: [1975] 2 S.C.R. 345 · Decided: 04-10-1974 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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345 
INTERNATIONAL COTTON CORPN. (P) LTD. 
v. 
COMMERCIAL TAX OFFICER, Hl'BLI & ORS. 
October 4, I 974 
[A. N. RAY, C. J., Y.V. CHAHFACHto A A 
A. C. Gt.JPTA, JJ.) 
• · 
lACJJtl~'tl )~· r ;.~o 
Ctnlrol Sole& Tax Act, l9S6-S 8(2)(a)-C 
1. 8(2A) hod th~ tffect oj up~ol/ng s.'6(t·A) of th~~
11"
1'£:::1 WJ/idity of-Whtrhu 
of the rtcorti-Jj Sa!~s Tax Officer tntltltd to rtcrl'j cr-1, or 0PP<Ut111 011 tht fare 
. 
Y tor •tr rtrtljkotlon. 
Certam Inter-state sale, of the appeUants were assessed b th 
to central sales-tax before lOth November 1964 
On tha &:; 
e Sales !Ill( Officer 
do/am Laklhml Nanimhalah Setty & Son~ 'held that where'• ~ 
t!ti' Coun ifl Yad· 
not liable to aalea tax if it were an Intra-state sales und 
h 
am transactJon "'115 
appropriate State lt. would not be liable to sales-tax if it '~>'!: ;:;es-~aw 0.r .the 
effect. to this declston the a~es.smeot orders of tho appellants W:ete rectified 
11~ 
s~t as1de the effect or this decuioo, sub-s. (l·A) "'-u Inserted 1n 1• 6 and a coc~uell· 
ual amendment '1\"8.5 made in au~s. (2-A) of a. 8 of the Central Salts-Tax Act on 
9-6-1969. Thereupon the assessma authority Bialn brouaht to tax the inter-stato , 
sales. 
~cction 8{2)(a) ~ter ita amendment enaeted that the tax pay8ble by any dealer 
oa hJJ tlll'llO\Icr relatlnf to tho sale of aoods in the ~une of inter-sute trado or 
commerce not fallina Wlthill •ub-I. (1) ill the ease or declared 1oods shall be ..UCU· 
Jated at the rate applicable to the sale or purchase oC such aoodJ uUidc t.bo appro-
priate State. 
It ...,. contended (1) that the clause it ll.llconstitulion:U in that Parliameot has 
abdicated 111 lqil!ative (unction by adoptina the rato applicable to the sale or pur-
chaae of sooda ~ 
the appropm~ State; (2) under a. 8(2)(a) it i3 tho rate of tax 
that wu prevaknt wlu:n that tectloo was enacted and not any Jubsequcnt variations 
ill the rate of tax that ~ru appllcable; (3) that while traDsactions bttwoen lOth No•· 
ember, 1964 aJ:id 9th Jllllt, 1969 :wore exempted !'rom liability to pay tax, if iD f~ 
the tu In respect of th.est transactions had not been collected by the dealer, a silln· 
lar c:o!ICGSion had not been sranttd to da!en who were siroilally aituated, that 
·is, thoso 'll'ho had not collected any tax on their sales prior to !WI NovcmberJ 1964 
and that auch concession sbo11ld bo available to ~ 
who had DOt mace any 
collection after 23rd January, 1962, that it the d11to of the j~dament of Hiah Court; 
(4) that Section 8(2A) whJch "u &mended at the samo tJmc as sub-4. 6<1-A) wu 
inserted had the effect of lmpUcdly rcpealina sut>-s. 6(l.A); (~~t the Sal~u 
O&cer h.t.d no power tO rectify tho a.sseuroent ordct1 after C:OJDU!i 11110 force o( ~ 
Cwtral Sa!ea Tu (,Amwdment) Aet, 1969 aince there was no error appar.Cllt ( .t11• 
fiiCe of the record; and (6) that the rectil!cation order was beyond tho polllt 0 tlllll 
under rule 38 ot tho ,Mysorc Sales Tu Rules. 
Di.mllMin a tho 11ppeaJ.s, 
f 
tho purpote of dto 
RElD : (l)(a) The adoption of Lhe rate oC local .ales tue ~tiamellt biiS In any 
Cc:nu . .t Salet tax 1n a partu:ular State doea oot •row ~;~am<D-t provides w•t tb• 
">' abdicated Ita lcaltl11t1ve runctJon. Whcro a aw 0 
a !.iublo to tho .ale or 
rate or Centr&l aa!ea-tu ahould be calculated at tho rate1111ft~ Jc~sla.tivo policy c&ll 
pu~haq ot such aoods Inside the appropn~t~. S~e, :,:~! C<etr&l slllcs-tax should, 
be dl5certled ill tuch a law, tho policy bellli ., .. I 
e r 
A law made by ParllamtDl 
In 110 event, be lu• than the rate ot lo~.,'<ftes~~utrerina from the vice of~ 
containina the above provlsJonJ CI.JliiOt be ""' 10 
tho abovo law tncorporatet · 
ar.c cleJeaauon of leiJ,!l&tlvo tuDctlon. On the contu:a'objectivt oC tho le~.t.~~ 
1ri1hlD lucl! tho nccetaatY provialont to ~~ 
0~ 
ta~ea-tu and to plua r-
0 
~&mdy,. to pr_,yent evuJon of paymtot o 
loopboA (3$0D·FJ 
)l s T c. 219, toUond. 
Q. hylff S/1/c ltl/1· (lf'l'f.) Co. Ltll. v. Aut. Cllllf""· 
.• 
346 
SUPRE~E COURT REPORTS 
[1975) 2 S.C.R. 
(b) The letislative policy laid down by Parliament in s. 8(2)(a) is that inter-
state trade should not be discriminated against. If the argument of the appellant 
is accepted there will have to be unending series of amendments to this section every 
tinte one State or the other alters its rate of tax. [351-D] 
(2) "Rate applicable" merely means the rate applicable at the relevant point 
of time and not the rate applicable when section 

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