1966 (6) TMI 8 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the validity of section 5-A of the Andhra Pradesh General Sales Tax Act on grounds of violation of Article 14 of the Constitution and retrospective application of the Amendment Act.

Analysis:
The petitioner, a cooperative society, challenged the validity of section 5-A of the Andhra Pradesh General Sales Tax Act, contending it violated Article 14 of the Constitution and raised concerns about the retrospective application of the Amendment Act. The petitioner argued that the Act should be deemed to have come into force only upon its publication in the Official Gazette on 26th September 1963, not earlier. The respondents argued that the Act came into force from 1st August 1963, and the petitioner was liable to pay sales tax from that date onwards. The petitioner's counsel relied on statutory interpretation principles to support the contention that the Act should be considered effective only from the date of publication in the Gazette.

The court analyzed the legislative intent behind the enactment of the Amendment Act and the significance of the date specified for its commencement. It emphasized that when the legislature clearly expresses the date of commencement in an enactment, the law is deemed to come into force from that date, irrespective of the timing of assent by the Governor or President. The court referred to the General Clauses Act and legal precedents to establish that a specific commencement date in the Act prevails over the date of assent. It concluded that the Amendment Act, having a specified commencement date of 1st August 1963, was intended to have retrospective effect, rendering the petitioner liable to pay sales tax from that date.

Regarding the petitioner's argument on the retrospective collection of sales tax, the court cited a Supreme Court decision to affirm that the obligation to pay sales tax lies with the seller, regardless of whether the tax is collected from the buyer. The court dismissed the petitioner's contention that the retrospective levy of tax was beyond the State Legislature's competence, emphasizing the legal obligation of the seller to pay sales tax as per the law.

The court also addressed the petitioner's claim of arbitrary classification under section 5-A, citing a previous decision where a similar argument was rejected. It concluded that the classification was not arbitrary and did not violate Article 14 of the Constitution. Consequently, the court dismissed the writ petition, upholding the validity of section 5-A of the Andhra Pradesh General Sales Tax Act and rejecting all contentions raised by the petitioner.