1988 (9) TMI 320 - HC - VAT and Sales Tax

Summary

Issues: Challenge to the vires of section 30-C of the A.P. General Sales Tax Act and the order of forfeiture under the same section.

Analysis:
The petitioner challenged the vires of section 30-C of the A.P. General Sales Tax Act, contending it to be ultra vires the State Legislature's powers under entry 54, List II of the Seventh Schedule to the Constitution. The Court noted that the petitioner has a right of appeal under the Act, and the appellate authority is the proper forum to decide the applicability of section 30-C. The Court held that it is not appropriate for it to delve into the merits of the case under Article 226 of the Constitution when an alternate remedy of appeal is available.

Regarding the validity of section 30-C, the Court referred to the decision in Kasturi Lal Harlal v. State of U.P. where the Supreme Court upheld the legislative competence of providing a procedure for the disbursement of amounts wrongly realized as tax. Section 30-C of the A.P. General Sales Tax Act imposes penalties for contravening specific provisions related to tax collection. The Court emphasized that the assessing authority can order the refund to the consumer if traced, even though there is no express provision for consumer refund in the section.

The Court also cited the decision in R.S. Joshi v. Ajit Mills Limited, where the Supreme Court clarified that the forfeiture clause in tax legislation does not necessarily require mens rea for penalties related to economic crimes. The Court concluded that the constitutional validity of section 30-C cannot be challenged as beyond the scope of legislative power or violative of constitutional articles based on the precedent set by the Supreme Court.

In light of the above analysis, the Court dismissed the writ petition, emphasizing that the petitioner has an alternate remedy available and, therefore, the challenge to the constitutionality of section 30-C lacks merit. The Court ruled that section 30-C is constitutionally valid and within the legislative competence of the State Legislature, ultimately dismissing the petition without costs.