1979 (10) TMI 196 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the rate of sales tax on country liquor
2. Levying sales tax on the first point of sale
3. Requirement of President's assent for amending Act removing exemption from sales tax on liquor

Analysis:

1. The petitioner challenged the rate of sales tax on country liquor, arguing that it should only be charged on the cost of liquor, not the license fee. The definition of "sale price" under the Act includes any sum charged for activities done by the dealer, which would cover the license fee. The petitioner admitted that the sales tax was based on the total price, including the license fee, adjusted towards excise duty. The court found that the license fee forms part of the consideration for the sale of liquor, making it part of the sale price and turnover. The court distinguished a previous case where excise duty was paid directly to authorities, unlike in this case where it was part of the sale consideration, leading to the dismissal of this ground.

2. The petitioner argued that sales tax should not be levied on the second point of sale, but the State had issued a notification directing tax payment from the warehouse to retail-sale licensees. The court found this ground devoid of merit, as the State had the authority to levy tax at the specified point of sale, leading to the rejection of this argument.

3. The petitioner raised an objection regarding the amending Act removing the exemption from sales tax on liquor, claiming it required the President's assent. However, this objection was not included in the original petition. The court noted that the tax in question fell under the State List of the Constitution, and the amending Act did not require the President's assent as it was assented to by the Governor. The court highlighted that no authority supported the petitioner's claim that an amendment must also receive the President's assent if the original Act did. Thus, this objection was deemed to lack substance, and the petition was dismissed.

In conclusion, the court dismissed the writ petition challenging the sales tax rate on country liquor, the point of levy, and the requirement of the President's assent for the amending Act. The court found no merit in the petitioner's arguments and ruled in favor of the State, leading to the dismissal of the petition without costs.