LexK.M. MOHAMAD ABDUL KHADER FIRM versus STATE OF TAMIL NADU & ORS.
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A B c D E F G 980 K.M. MOHAMAD ABDUL KHADER FIRM v. STATE OF TAMIL NADU & ORS. October 16, 1984 [V.D. TULZAPURKAR, V. BALAkRISllNA ERADI AND D.P.MADON JJ.] Tamil Nadu Additional Sales Tax Act, (Act II of 1976)-Legls/Qtive com- petence to levy Additional Tax in addition to the collecti~n of surcharge under the Tamil Nadu Sales Tax (Surch11rge) Act, 1971-Whether the levy of graded rates violate1Article14 of the Constitution-Whether the levy of Additional Tax itself is violative of Articles 19 and 3~.I of the Constitution since it prohibits passing of the incidence of taxation to the consumer of goods-Constilution of India 1950 Articles 14, 19 and 30/. In Tamil Nadu the levy of the Sales Tax is regulated by the Tamil Nadu General Sales Tax Act, 1959. In the year 1970 the S~te Legislature enacted the Tamil Nadu Additional Sales Tax Act, (Act XIV of 1970) with effect from May 28, 1970. The scheme of section 2 of the Act was to levy the Additional Tax by the process of increasing the tax payable under the Act of 1959 by 10 · percent the said increase repre~enting the quantum of the Additional Tax. The proviso to Section stipulates for a concessional treatment in respect of the declared goods. In September, 1971 the State Legislature enacted the Tamil Nadu Sales Tax (Surcharge) Act, 1971. with retrospective effect from. June, 1971. Under Section 3 of that Act every dealer liable to pay tax under the Act of 1959 was subjected to a further liability to pay surcharge at the rate of S per cent of such tax. In 1976 the Tamil Nadu Additional Sales Tax (Act II) of 1976 was passed amending and substituting Section 2 of the earlier Act providing for graded rates with a super added condition that the Additiona I Tax payable cannot be collected from the consumers, a contravention of which would attract penal action. On receipt of notices of demand issued consequent upon the assess· ment to Additional Sales Tax under the provisions of the Section as amended by the 1976 Act the petitioners have come up to the Court challenging the constitutional validity of the Act, 1976 and seeking to quash the assessment orders and tho Dotices of den1arid issued to them. Dismissing the Writ Petitions, the Court HELD : t, The contentions that the amended Section 2 of the Tamil Nadu Additional Sales Tax Act 2 of 1976 is devoid of legislative con1petence in as H much as it in1poses not a tax on sales but a tax on income, that the adoption - • j i • ' k.M M.A. KHADER v. TAMIL NADU (Balkrishna Eradi, J.) 981 of slab system for determinin& taxr liability is alien to the concept of Sales Tax A _ that the levy or"Additionat Tax under the irnpun&cd enactment violates Articles · J4 and 19 ·of the Constitution and that the provision~ of the Act arc violative of Article 301 of the Constitution are all totally devoid of merit. [99JC.D] Mis Pha,ma Associates and others v. Stale of Bihar, [f983] 4 S.C.C. 45 : 's. Kodar v. State of Kera/a [!975] I S.C.R. 121 followed. 2. The constitutional validity .of the levy of AdditionaJ·Tait is not in any ,manner affected by the changes brought about in tbe_modc of levy and as a ,re_sult of the amendments effected by the impugned Act. The impugned enact- ment has merely amended the 197 '.) Act. It has not introduced a new tax ; what it has done is only tO amend the 1970 Act by providing for a different method of computation of the Additional Tax leviable under that Act by link- ing the rate of levy to the.taxable turnover instead of to the amoun~ of tax assessed under.the Act of 1959. The nature and identity of the Additional Sales Tax imposed by the 1970 Act have not been in any way altered bY the imprigned Act. (985F;C;E;D] . S. Kodar v. State of Kera/a, [1975] I S.C.R. 121 referred to. ' . - · " :ORIGINAL JuRISDICTION : Writ Petition (Civil) Nos: 4358 of 1978, 212-213, 760 of 1979 and 6449 of 1980. Under article 32 of the eon~titution of India S.N. Kacker and A. T.M. Sampath for the Petitioner in W.P. Nos. 212-213 of 1980. A.K. Sen, A.T.M. Sampath and P.N. Rama/ingam for the Petitioner in W.P. No. 760 of 1979. A. T.M. Sampat~ and P.N. Rama/ingam for the Petitioner in W.P. Nos. 4358 of 1978 and 6449 of 1980. S.T. Desai and A .V. Rangam for the Respondent. The Judgment of the Court was delivered by BALAKRISHNA BRAD!, J. in these Writ Petitions, the petitioners have challenged the constitutional validity of the provisions of Tamil Nadu Additional
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