1981 (4) TMI 262 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the direction and specimen form in annexures B and C.
2. Compliance with Sections 33 and 33A of the Assam Finance (Sales Tax) Act and Rules 55, 56, 57, 71, 72, 73, and 74.
3. Violation of constitutional rights under Articles 19(1)(g), 301, 302, and 304(b).
4. Authority and powers of the Superintendent of Taxes and the Commissioner under the Act and the Rules.

Issue-wise Detailed Analysis:

1. Validity of the Direction and Specimen Form in Annexures B and C:
The petitioner, a registered dealer under the Assam Finance (Sales Tax) Act, 1956, challenged the direction and specimen form issued by the Superintendent of Taxes, Tezpur, arguing that these were contrary to the Act and the Rules. The court examined whether the requirements in annexures B and C, which mandated obtaining a permit in advance by filing a declaration, were within the powers envisaged under the Act and the Rules and whether they were consistent with constitutional provisions.

2. Compliance with Sections 33 and 33A of the Assam Finance (Sales Tax) Act and Rules 55, 56, 57, 71, 72, 73, and 74:
Section 33 of the Act deals with the restriction of movement, ensuring no evasion of tax, while Section 33A allows the erection of check posts to prevent tax evasion. Rules 55 and 56 prescribe the procedure for receiving goods from outside Assam by filing road declaration form XIV. Rules 71, 72, and 73 outline the procedure at check posts, including filing declarations in form XV. The court noted that the new specimen form in annexure C purported to be under Rules 55 and 56, but was an additional requirement beyond the existing forms XIV and XV.

3. Violation of Constitutional Rights under Articles 19(1)(g), 301, 302, and 304(b):
The petitioner argued that the new procedure violated their rights under Articles 19(1)(g), 301, 302, and 304(b) of the Constitution by creating unreasonable restrictions on the freedom of trade, commerce, and intercourse. The court emphasized that while tax evasion prevention is essential, measures must not impede the free flow of trade and commerce. The court cited various judgments, including Atiabari Tea Company Ltd. v. State of Assam and Hansraj Bagrecha v. State of Bihar, to highlight that any measure resulting in unreasonable restrictions on trade would be struck down.

4. Authority and Powers of the Superintendent of Taxes and the Commissioner under the Act and the Rules:
The court scrutinized whether the Superintendent of Taxes and the Commissioner had the authority to issue the impugned direction and specimen form. It was found that the specimen form in annexure C was not in conformity with the instructions issued by the Commissioner and was not a substitute for forms XIV and XV. The court held that the direction in annexure B and the form in annexure C were ultra vires the powers of the Superintendent of Taxes and the Commissioner.

Conclusion:
The court quashed the direction in annexure B and the specimen form in annexure C, declaring them ultra vires the powers of the Superintendent of Taxes and the Commissioner. The Superintendent was restrained from giving effect to these annexures. The court left open the possibility for the petitioner to challenge the instructions issued by the Commissioner in a separate petition if advised. The petition was allowed, and the Rule was made absolute without costs.