1997 (1) TMI 493 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to notification declaring it ultra vires of State Government's power to amend entry in M.P. General Sales Tax Act, 1958.

Analysis:
The petitioner challenged a notification dated September 20, 1990, which substituted entry 6 of Schedule I appended to the M.P. General Sales Tax Act, 1958. The petitioner, a company engaged in the manufacture and sale of woven fabrics of cotton yarn, argued that certain categories of cloth were excluded by the substitution, beyond the power granted under section 10 of the Act. The petitioner contended that the State Government could only include entries, not exclude them. However, the court disagreed, stating that the power to amend the Schedule includes both inclusion and exclusion.

The court referred to section 10 of the Act, which provides that the State Government can amend Schedule I to include new goods or relax conditions. The court emphasized that the power to amend includes the power to exclude items, as per section 21 of the M.P. General Clauses Act, 1957. This section clarifies that the power to amend includes adding, amending, varying, or rescinding entries, allowing for both inclusion and exclusion.

In support of their interpretation, the court cited the case of Lahu Udyog Karmchari Co-operative Housing Society Ltd. v. State of M.P., highlighting the power of the State Government to release land from a scheme under section 21 of the General Clauses Act. The court also referenced the case of State of Bihar v. D.N. Ganguly, where it was held that the power to cancel or supersede a reference cannot be implied from the General Clauses Act, unlike the power to amend a schedule under section 10(2) of the Act.

The court further noted the case of Gopi Chand v. Delhi Administration, emphasizing that the power to cancel or modify notifications must be exercised within the limits prescribed by the statute granting such power. In the present case, the court found that the State Government had the authority to amend the Schedule, including the power to exclude items, as provided under section 10(2) of the Act.

Lastly, the court addressed the petitioner's reliance on the case of Sales Tax Officer, Navgaon v. Timber & Fuel Corporation, stating that the power under section 12 of the Act was limited to exempting dealers from tax, not retrospectively levying tax. The court concluded that the State Government had the power to amend the Schedule, including the power to include or exclude entries, and found no illegality in the notification. Consequently, the petition was dismissed.