1997 (12) TMI 574 - SC - VAT and Sales Tax

Competence of the State Legislature to pass any law relating to transportation of goods - Held that - The assurance given by the counsel of the State in court was whether the applicants are dealers or not he assures that if and when the applicants approach the Commissioner of Taxes he shall ensure that these forms are supplied to the petitioners . This assurance was clearly against the law. Form XVIII-A cannot be issued to the transporters. Although the order dated March 3 1997 was based on the assurance given by the Senior Advocate appearing for the State the order will have to be recalled. An advocate appearing on behalf of the State cannot undertake that the State will do something contrary to the statute. Therefore this application is allowed.

Summary

Issues:
Challenge to the competence of State Legislature to pass laws on transportation of goods; Misinterpretation of Tripura Sales Tax Rules regarding issuance of forms XVIII-A and XVIII-B to transporters; Recalling of an order based on an unauthorized concession made by the State's Senior Counsel.

Analysis:
The case involved a writ petition by Tripura Goods Transport Association questioning the State Legislature's authority to enact laws on the transportation of goods, specifically regarding sales tax liability for transporters. The petition raised concerns about the submission of various forms under the Sales Tax Rules by transporters at check-posts. The Gauhati High Court dismissed the petition, leading the Association to appeal to the Supreme Court via a special leave petition. The matter was settled by a consent order in 1996, outlining conditions for transporters to furnish specific forms to avoid certain requirements under the Sales Tax Rules.

Subsequently, a further application was made by the transporters, prompting an order in March 1997. The order was based on the State Counsel's concession that transporters were not being supplied with the required forms due to not being dealers. The State Counsel assured that forms would be provided upon request to the Commissioner of Taxes. However, the State later sought to recall this order, alleging it was based on an unauthorized concession that contradicted the Tripura Sales Tax Rules.

The Supreme Court agreed with the State's argument, emphasizing the language of Rule 47-A and the specific requirements of form XVIII-A, which clearly indicated it was meant for dealers, not transporters. The Court highlighted that the form's content and declaration were tailored for dealers, making it inappropriate for issuance to transporters. The Court deemed the State Counsel's assurance as against the law and unauthorized, leading to the decision to recall the order based on this assurance.

Ultimately, the Court allowed the State's application to recall the order from March 1997 and reinstated the previous application for further proceedings. It was emphasized that an advocate representing the State cannot commit to actions contrary to statutory provisions. The judgment concluded by disposing of the applications without any cost implications.