9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1999 (8) TMI 761 - SC - VAT and Sales TaxWhether the two Acts under reference operate in the same field. If so which one of the two Acts is a special Act? Is the Sugarcane Act an enactment intended solely for the purpose of regulation of supply production and distribution of sugarcane and the collection of purchase tax under the said Act is only incidental for the purpose of creating a fund for maintenance and functioning of the Board and the Council under the said Act? Whether the levy under the Sugarcane Act is only a fee for the services rendered? Held that - Appeal allowed. The Sugarcane Act being a special Act pertaining to all aspects of the control of sugarcane as well as levy of purchase tax the same will have to be construed as a special enactment with reference to sugarcane. Legislative history of the Sugarcane Act bears testimony to the fact that at one point of time the Legislature had intended to collect a levy under sub-section (3) of section 49 as a fee which imposition came to be challenged before the High Court and the challenge succeeded because the State was not able to satisfy the court that the said levy was supported by quid pro quo. It is in this background that the present sub-section (1)(b) of section 49 came to be brought on the statute book first by way of an Ordinance and then by virtue of an Act making the collection a tax under entry 54 of List II of the Seventh Schedule. It is too late in the day for the State now to contend once again that the said levy is a fee and not a tax. It may also be noted at this stage that nowhere in the pleadings material has been placed by the State to satisfy the requirement of levy of fee by showing that there is a reasonable service rendered to the purchasers of sugarcane so as to justify the said levy as a fee.
Issues Involved:
1. Whether the two Acts (Bihar Finance Act, 1981 and Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981) operate in the same field. 2. Whether the Sugarcane Act is a special enactment intended solely for the regulation of sugarcane. 3. Whether the levy under the Sugarcane Act is a fee for services rendered or a tax. Issue-wise Detailed Analysis: 1. Whether the two Acts operate in the same field: The appellants argued that the State of Bihar is levying and collecting purchase tax on sugarcane under both the Bihar Finance Act, 1981 (Finance Act) and the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (Sugarcane Act), thereby subjecting the same purchase to tax twice. They contended that the Sugarcane Act, being a special enactment for levying purchase tax exclusively on sugarcane, should override the general provisions of the Finance Act. The State, however, argued that the levies under the two Acts cover different aspects and operate in different fields. The Court found that both enactments are legislated under entry 54 of List II of the Seventh Schedule, which empowers the State Legislature to levy tax on the sale and purchase of goods. The Finance Act is a general Act relating to the levy of tax on the sale and purchase of goods in Bihar, while the Sugarcane Act specifically provides for the levy of purchase tax on sugarcane and regulates its production, supply, and distribution. Thus, both Acts operate in the same field concerning the levy of purchase tax on sugarcane. 2. Whether the Sugarcane Act is a special enactment intended solely for the regulation of sugarcane: The Court noted that the object of the Sugarcane Act is to regulate the production, supply, and distribution of sugarcane intended for use in sugar factories and for taxation of sugarcane. Section 49(1)(b) of the Sugarcane Act imposes a tax on the purchase of sugarcane by or on behalf of the occupier of a factory. This section does not state that the levy of purchase tax is in addition to the levy under the Finance Act. Therefore, the Sugarcane Act is a special enactment specifically meant for the control of sugarcane activities, including the levy of purchase tax. The Court concluded that the Legislature intended the Sugarcane Act to be a special enactment for the purpose of levying purchase tax on sugarcane, to the exclusion of such levy under the Finance Act. Thus, the rule that "general provision should yield to special provision" is applicable. 3. Whether the levy under the Sugarcane Act is a fee for services rendered or a tax: The State contended that the levy under section 49 of the Sugarcane Act is in the nature of a fee for services rendered by the Sugarcane Board and Council. However, the Court found this argument unconvincing. The legislative history showed that the levy was initially intended as a fee but was later changed to a tax due to legal challenges. The Court noted that the State had not provided material to justify the levy as a fee by demonstrating a reasonable service rendered to the purchasers of sugarcane. The Court concluded that the levy under section 49(1)(b) of the Sugarcane Act is indeed a tax and not a fee. The tax collected under the Sugarcane Act is not exclusively earmarked for the Board and Council but also goes to the State exchequer/general fund. Conclusion: The appeals were allowed, setting aside the judgment and order of the High Court. The Court held that the Sugarcane Act, being a special enactment, overrides the general provisions of the Finance Act concerning the levy of purchase tax on sugarcane. The levy under the Sugarcane Act is a tax, not a fee, and the writ petitions were allowed with all consequential relief. Appeals allowed.
|
