1994 (12) TMI 294 - HC - VAT and Sales Tax

Summary

Issues:
1. Appeal against the order of the learned single Judge dated August 24, 1993.
2. Common issue raised in special appeal and appeals in Schedule A.

Analysis:
The State of Rajasthan filed a special appeal challenging the order of the learned single Judge, which disposed of a writ petition based on a previous single Bench decision. The special appeal and related appeals in Schedule A were consolidated for a common judgment.

The appellant's counsel moved an application citing the Rajasthan Sales Tax (Amendment) Act, 1994, which substituted section 5(3) of the Rajasthan Sales Tax Act, 1954, and rule 29 of the Rajasthan Sales Tax Rules. The Supreme Court had previously declared these provisions unconstitutional in Gannon Dunkerley & Co. v. State of Rajasthan, leading to the conclusion that the tax could not be levied. The court noted that the authorities were not entitled to recover tax at source following the Supreme Court decision.

The Division Bench in a previous case held that once the substantive provision for tax levy was declared ultra vires, the provisions for tax recovery could not be enforced without an amendment. The court observed that prior to the amendment, there was no provision to impose tax on works contract turnover in Rajasthan, rendering tax collection at source invalid.

Considering the newly substituted provisions in the Rajasthan Sales Tax Act introduced by the Amendment Act of 1994, the court found the impugned order of the single Judge unsustainable. The court allowed the special appeal and appeals in Schedule A, setting aside the single Judge's order and permitting authorities to recover tax in accordance with the law.

In conclusion, the appeals were allowed, and the impugned order was set aside, allowing the authorities to proceed with tax recovery as per the amended provisions. The judgment was to be placed in all files mentioned in Schedule A for reference.