1984 (12) TMI 272 - HC - VAT and Sales Tax

Issues Involved:
1. Whether sales tax can be imposed on the sale or purchase of declared goods at more than one stage.
2. Whether the stage of taxation is the first point of sale or the last point.
3. Applicability of Section 15(a) of the Central Sales Tax Act, 1956 regarding single-point taxation.
4. Validity of the assessment orders and demand notices issued by the assessing authorities.
5. Availability and appropriateness of alternative remedies through appeals.

Detailed Analysis:

1. Imposition of Sales Tax at More Than One Stage:
The central issue in these writ petitions is whether sales tax can be imposed on the sale or purchase of declared goods, specifically steel tubes, at more than one stage. The petitioners argue that the tax on declared goods can only be levied at one point as per Section 15(a) of the Central Sales Tax Act, 1956, which states, "the tax shall not be levied at more than one stage." The assessing authorities, however, imposed tax at both the first and subsequent points of sale, leading to a double taxation scenario.

2. Stage of Taxation - First Point or Last Point:
The petitioners contend that the tax should be levied at the last point in the series of sales to successive dealers, as supported by various notifications issued by the State Government. The notification dated April 11, 1958, explicitly states that the tax on iron and steel should be payable at the last point in the series of sales by successive dealers. Subsequent notifications revised the tax rates but did not alter the point of taxation. The respondents argue that the tax on steel tubes/pipes was leviable at the first point by virtue of Rule 15 of the Rajasthan Sales Tax Rules, which was applicable during the assessment years in question.

3. Applicability of Section 15(a) of the Central Sales Tax Act, 1956:
Section 15(a) of the Central Sales Tax Act, 1956, restricts the imposition of tax on declared goods to a single point. The petitioners argue that the imposition of tax at both the first and subsequent points violates this provision. The respondents, however, contend that the notifications referred to by the petitioners were not applicable to the facts of these writ petitions and that the tax was rightly levied at the first point.

4. Validity of the Assessment Orders and Demand Notices:
The petitioners challenge the validity of the assessment orders and demand notices issued by the assessing authorities for the years 1977-78 and 1978-79. They argue that the assessing authorities acted illegally and in gross violation of the provisions of the Act and the notifications by levying tax at both points. The respondents counter that the assessment orders are valid and that the petitioners have an alternative remedy by way of appeals, which they have already availed.

5. Availability and Appropriateness of Alternative Remedies:
The respondents argue that the writ petitions should be dismissed on the ground that the petitioners have an alternative remedy by way of appeals, which are pending before the appellate authority. The Supreme Court in Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 (SC) held that where a right or liability is created by a statute that provides a special remedy for enforcing it, the remedy provided by that statute must be availed of. The petitioners, however, argue that the assessment orders can be directly challenged by writ petitions, especially when the orders are without jurisdiction or violate principles of natural justice.

Conclusion:
The High Court dismissed the writ petitions on the preliminary objection raised by the Department, directing the petitioners to pursue their remedy before the appellate authority. The Court noted that the assessing authority had given contradictory orders, which need to be adjudicated upon by the appellate authority. The Court also directed the appellate authority to decide the appeals on merits before February 28, 1985, and not to enforce the realization of the demand raised until the disposal of the appeals.

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