1956 (8) TMI 41 - HC - VAT and Sales Tax

Summary

Issues:
1. Legality of orders regarding the levy of sales tax on untanned hides and skins.
2. Offending provisions of Article 286(3) of the Constitution of India.
3. Validity of rules regarding assessments not passed by the Legislature.
4. Ultra vires declaration of Rule 23(5) by the Supreme Court.
5. Impact of the amendment to Rule 1(2) in Schedule I of the Act.
6. Application of Rule 23(5) in the assessment of unlicensed dealers.

Analysis:
The judgment delivered by the Mysore High Court addressed multiple issues raised in petitions filed under Article 226 of the Constitution of India concerning the legality of sales tax levy on untanned hides and skins. The main arguments revolved around the contravention of Article 286(3), the validity of rules not passed by the Legislature, and the ultra vires declaration of Rule 23(5) by the Supreme Court. The petitioners contended that lack of President's assent post-1952 affected the assessment, but the Court held that pre-existing laws were not impacted by Article 286(3) as per Soma Singh v. State of Pepsu. The Mysore Sales Tax Act, in force since 1948, was exempt from the requirement of President's assent.

Regarding the amendment to Rule 1(2) in Schedule I of the Act, the petitioners argued against the shift in liability from seller to buyer due to the deletion of the term "licensed" in 1952. However, the Court cited legal precedents emphasizing that the burden ultimately falls on the consumer, irrespective of whether the tax is imposed on buyers or sellers. The amendment was deemed lawful as it did not involve a delegation of policy beyond the Government's conferred power.

The validity of Rule 23(5) was challenged based on the Supreme Court's ruling on a similar provision in the Madras Sales Tax Act. The Court distinguished between licensed and unlicensed dealers, asserting that the distinction was reasonable and not held to be unreasonable in previous cases. The petitioners' argument that the rules were unfavorable to them as unlicensed dealers was dismissed, as the differentiation was deemed lawful and consistent with the Act's provisions.

In conclusion, the Court dismissed the petitions without costs, upholding the legality of the sales tax levy on untanned hides and skins and affirming the validity of the rules and assessments in question. The judgment provided a detailed analysis of each issue raised by the petitioners, citing relevant legal principles and precedents to support its conclusions.