1982 (2) TMI 289 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the Orissa Additional Sales Tax Act of 1975 as amended by the 1979 Act.
2. Compatibility of the subsequent legislation with the scheme of the 1947 Act.
3. Provision for multi-point taxation under the 1975 and 1979 Acts.
4. Incongruity in tax incidence under the principal Act.
5. Validity of Rules made under the 1975 Act as amended.

Analysis:
The judgment by the Orissa High Court addressed the challenge to the Orissa Additional Sales Tax Act of 1975 as amended by the 1979 Act. The petitioners contended that the subsequent legislation only intended to levy additional sales tax without altering the scheme of the 1947 Act. They argued against multi-point taxation under the 1975 and 1979 Acts, stating that it should align with the single-point scheme of the 1947 Act. Additionally, concerns were raised about the tax incidence on essential commodities and the validity of Rules made under the 1975 Act as amended.

The Court examined the legislative powers and intent behind the Acts. It was acknowledged that the subsequent legislation fell within the legislative field covered by entry 54 of List II of the Constitution. The Court emphasized that each entry provides wide legislative powers, allowing repeated legislation on the same subject matter. It was established that the 1975 Act, as amended in 1979, was an independent statute and not merely supplemental to the 1947 Act.

Regarding the contention on tax imposition, the Court analyzed Section 3(1) of the 1975 Act, emphasizing the declaration of liability and the quantification of tax under the scheme of the 1947 Act. The Court cited legal precedents to support the view that the legislative intention was to raise an additional tax in addition to the liability under the 1947 Act, which was deemed valid.

Furthermore, the Court addressed concerns about the lack of guidelines for taxing essential commodities, stating that it falls within the legislative policy domain. The delegation of power to exempt certain goods from taxation was deemed valid. Lastly, the Court found the Rules made under the 1975 Act to be validly enforced, as they had complied with the statutory requirements.

In conclusion, all contentions raised by the petitioners were dismissed, and the writ application was rejected, with each party directed to bear their own costs. Justice Behera concurred with the Chief Justice's decision.