1981 (3) TMI 234 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of rule 27(1) of the Rules under the Karnataka Sales Tax Act.
2. Conflict between rule 27(1) and section 27(1) of the Act.
3. Interpretation of the definitions of wholesale and retail dealers.
4. Compliance issues faced by commission agents in filling out form No. 14.

Analysis:
1. The writ petition challenges the validity of rule 27(1) of the Rules and form No. 14 under the Karnataka Sales Tax Act. The petitioners, who are dealers acting as selling commission agents, argue that the requirement to issue delivery notes and bills of lading in the prescribed form is unnecessary and conflicts with section 27(1) of the Act. They contend that this rule is ultra vires of the Act.
2. Section 27(1) of the Act mandates every dealer with a turnover exceeding a specified amount to issue bills for all goods sold. The petitioners argue that the lack of a clear definition of wholesale dealer causes confusion regarding the necessity of issuing delivery notes. However, the court finds that rule 27(1) is not in conflict with section 27(1) as it pertains specifically to wholesale dealers, assisting in the effective control and taxation of goods.
3. The court clarifies that the definitions of wholesale and retail dealers under rule 27(1) are clear, and it is the responsibility of the dealers to understand their classification. The argument of ambiguity in definitions leading to confusion is dismissed, emphasizing that wholesale dealers are those selling to other traders.
4. The petitioners, commission agents in market yards, raise concerns about filling out form No. 14 due to the nature of their business with agriculturists. The court explains that the agents can prepare bills themselves and obtain signatures from sellers for compliance. It is noted that the agents can sign on behalf of the agriculturists as their representatives.

Conclusion:
The court rejects the petition, finding no legal infirmity in rule 27(1) of the Rules. The petition is deemed frivolous and dismissed without issuing a rule.