1972 (7) TMI 88 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to demand for sales tax and purchase tax.
2. Validity of provisions of the Purchase Tax Act.
3. Nature of transactions regarding the purchase of sugarcane.
4. Consideration for remission of tax under the Purchase Tax Act.

Analysis:
1. The petitioner, a sugar factory, challenged the demand for sales tax and purchase tax on various grounds. The petitioner argued that the provisions of the Purchase Tax Act were ultra vires, and the transactions for purchasing sugarcane were not voluntary, thus sales tax should not be levied. Additionally, the petitioner sought a writ of mandamus for the State Government to consider remitting the tax under the Purchase Tax Act.

2. The contention regarding the ultra vires nature of the Purchase Tax Act was not pursued, citing a Supreme Court decision. Similarly, the argument that the supply of sugarcane did not amount to sale due to regulation under another Act was not pressed, referring to another Supreme Court decision.

3. The only issue pressed before the court was the rejection of the petitioner's application for remission of purchase tax. The court noted that the government's rejection was based on the petitioner's factory closure for renovation, leading to a loss. The court emphasized that the government's power to remit tax under the Purchase Tax Act was administrative and could only be challenged if mala fide, discriminatory, or without relevant reasons. The court found that the government's rejection was justified as the petitioner failed to demonstrate continuous loss due to specific reasons outlined in the Act.

4. The court ruled that since the petitioner did not raise any other points, the petition was dismissed. The court directed each party to bear their own costs due to the filing of the petition before key legal questions were settled by Supreme Court decisions.