1958 (4) TMI 104 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the High Court should interfere under Article 226 of the Constitution when alternative remedies are available under the Rajasthan Sales Tax Act.
2. Whether the articles prepared by the applicants (Misri, Batasa, etc.) are subject to sales tax despite being made from sugar on which sales tax has already been paid.
3. Whether the articles prepared by the applicants qualify as Deshi sweetmeats, which are exempt under the Rajasthan Sales Tax Act.

Issue-wise Detailed Analysis:

1. Interference under Article 226 of the Constitution:
The court addressed a preliminary objection from the State, arguing that the applicants had an equally efficacious and convenient alternative remedy by way of appeal and revision under the Rajasthan Sales Tax Act. The court emphasized that the Act provides a comprehensive mechanism for assessment and correction of sales tax through sections 13, 14, and 15, which include provisions for appeal, revision, and reference to the High Court on questions of law. The court referenced its earlier decision in Ramniranjan Kedia's case, which held that a writ of certiorari is discretionary and should not be issued when alternative remedies are available. The court distinguished the Supreme Court's decision in Kailash Nath's case, noting that it was an application under Article 32, which guarantees the right to move the Supreme Court for enforcement of fundamental rights, unlike Article 226. The court concluded that it should not intervene at this stage since the applicants had not exhausted the remedies provided under the Act.

2. Sales Tax on Articles Made from Sugar:
On the merits, the court rejected the applicants' contention that Misri, Batasa, etc., should not be subject to sales tax because they are merely sugar, on which sales tax has already been paid. The court stated, "Misri, Batasa, etc., are not merely sugar," and clarified that the transformation of sugar into these products constitutes a different taxable event. Therefore, the fact that sales tax had been paid on the raw sugar did not exempt the finished products from being taxed again.

3. Classification as Deshi Sweetmeats:
The applicants argued that their products should be classified as Deshi sweetmeats, which are exempt from sales tax under serial No. 14 of the Schedule to the Rajasthan Sales Tax Act. The court dismissed this argument, stating, "Nor are we prepared to accept that they are Deshi sweetmeats." The court noted that while it is difficult to define Deshi sweetmeats precisely, common knowledge in the region does not consider Misri, Batasa, or sugar toys as Deshi sweetmeats. Consequently, these products did not qualify for the exemption under the Schedule.

Conclusion:
The court dismissed the applications, concluding that the applicants had an alternative remedy by way of appeal under section 13 of the Act and further remedies under sections 14 and 15, which they had not utilized. The court also found no merit in the applicants' contentions regarding the taxability of their products and their classification as Deshi sweetmeats. The applications were dismissed with costs.