1960 (1) TMI 26 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the Andhra General Purchase Tax Rules due to lack of pre-publication.
2. Jurisdiction of the Special Commercial Tax Officer (Evasions) to assess the petitioner.
3. Timing of the sales completion in relation to the enforcement of the Andhra General Purchase Tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Andhra General Purchase Tax Rules:
The petitioners argued that the Andhra General Purchase Tax Rules were void due to the lack of pre-publication as required by Section 19 of the Madras General Sales Tax Act, read with Section 11 of the Andhra General Purchase Tax Act. The court examined the provisions of the Andhra General Purchase Tax Act, which was enacted in 1956 and came into force on 1st August 1956. Section 4 of the Act provided for the levy of taxes on purchases of specific goods and stated that the turnover shall be determined in accordance with prescribed rules, which must be approved by a resolution of the Legislative Assembly. The rules were indeed approved by the Legislative Assembly and published in the Andhra Gazette on 18th October 1956. The court referred to a Full Bench decision in Sreeramulu Chetty v. State of Andhra, which held that rules not complying with the pre-publication requirement were invalid. However, the court distinguished the present case by noting that Section 11 of the Andhra Act only incorporated provisions of the Madras Act that were not inconsistent with the Andhra Act. Since the Andhra Act specifically provided for the approval of rules by the Legislative Assembly, the pre-publication requirement of the Madras Act did not apply. Therefore, the court held that the Andhra General Purchase Tax Rules, 1956, were valid.

2. Jurisdiction of the Special Commercial Tax Officer (Evasions):
The petitioners contended that the Special Commercial Tax Officer (Evasions) had no jurisdiction to assess them. The court referred to G.O. Ms. No. 377 Finance (Commercial Taxes) dated 18th May 1956, which empowered Commercial Tax Officers appointed for investigating evasions to make assessments in cases where omissions or suppressions were detected. The notification explicitly stated that the Commercial Tax Officer (Special) for evasions had the authority to exercise the powers of an assessing authority in cases of detected suppression or omission. Thus, the court found no merit in the petitioners' contention and held that the Special Commercial Tax Officer (Evasions) had the jurisdiction to make the assessments.

3. Timing of Sales Completion:
The petitioners argued that the sales transactions were completed before the Andhra General Purchase Tax Act came into force on 1st August 1956. They relied on Section 20 of the Sale of Goods Act, which states that the property in goods passes to the buyer when the contract is made, irrespective of the time of payment or delivery. However, the court noted that the Andhra Act defined "purchase" as a transaction involving the acquisition of goods for consideration, excluding acquisitions under mortgage, hypothecation, charge, or pledge. Since the possession of the goods was transferred and the price was paid after the Act came into force, the court held that the transactions were liable to tax under the Andhra General Purchase Tax Act. The court emphasized that the definition of "purchase" in the Andhra Act required the actual transference of possession, which occurred after the enforcement date of the Act.

Conclusion:
The court dismissed the revision cases, upholding the validity of the Andhra General Purchase Tax Rules, confirming the jurisdiction of the Special Commercial Tax Officer (Evasions), and determining that the sales transactions were taxable as they were completed after the Act came into force. The petitions were dismissed with costs.