1963 (4) TMI 54 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of sales tax on a licensed dealer and tanner for the year 1953-54. Jurisdiction of a Magistrate to recover tax exceeding a specified amount under section 24(2)(b) of the Madras General Sales Tax Act, 1959. Alleged discrimination under Article 14 of the Constitution in the levy of tax at different points of sale.

Analysis:
The petitioner, a licensed dealer and tanner, was assessed to sales tax for the year 1953-54. The turnover included purchases of untanned hides and skins from licensed dealers, attracting tax at the point of purchase. The petitioner sought to prevent the revenue from collecting the tax, raising two main grounds. Firstly, questioning the jurisdiction of a Magistrate to recover tax exceeding a specified amount under section 24(2)(b) of the Act. The court held that the Magistrate's jurisdiction to collect tax as a fine is governed by the fiscal Act, not the Code of Criminal Procedure, dismissing this ground of challenge.

Secondly, the petitioner alleged discrimination under Article 14 of the Constitution regarding the levy of tax at different points of sale. The contention was that tax should be levied at the sale point when tanned goods are sold to unlicensed dealers, as they do not benefit from the single point tax scheme. The court emphasized that any differential burden arose due to the failure of dealers in the transaction chain to obtain licenses, not due to discriminatory provisions of the Act. The court highlighted that the Act imposes tax at each point of sale, subject to concessions and exemptions, and upheld the validity of the tax scheme. The court rejected the discrimination claim, noting that the petitioner had not demonstrated any discriminatory treatment among licensed dealers.

The court emphasized that the State should not discriminate under Article 14, and equal treatment should be provided to similar entities. The court found no basis for discrimination in the tax assessment and dismissed the petition, stating that the petitioner had no grounds for complaint regarding discrimination in the assessment order for the year 1953-54. The court concluded that the Act's scheme did not support the discrimination claim, referencing a previous judgment on a similar issue. The petition was dismissed with costs awarded to the respondent.