1998 (11) TMI 634 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Propriety and validity of the notice issued under section 23(g) of the Assam General Sales Tax Act, 1993.
2. Inclusion of surcharge in the "sale price" for the purpose of levying sales tax.
3. Maintainability of the writ petition in light of the availability of an alternative remedy.

Issue-wise Detailed Analysis:

1. Propriety and Validity of the Notice:
M/s. Indian Oil Corporation Limited challenged the notice issued by the Senior Superintendent of Taxes, Guwahati, which directed the company to show cause why penal action should not be initiated for non-payment of taxes on the resale of petroleum products. The notice was based on the allegation that the resale price exceeded 40% of the purchase price, making it taxable under section 8(1)(a) of the Assam General Sales Tax Act, 1993, and rule 12 of the Assam General Sales Tax Rules, 1993.

2. Inclusion of Surcharge in the "Sale Price":
The petitioner argued that the surcharge collected on behalf of the oil pool account should not be included in the "sale price" as it was not retained by the company but transferred to the oil pool account. The court examined the definition of "sale price" under section 2(34) of the Act, which includes any sum charged by the dealer, excluding specific exemptions like outward freight, delivery, installation, or interest. The court concluded that the surcharge did not fall under these exemptions and must be included in the sale price. The court emphasized that the statutory provisions are clear and unambiguous, and the surcharge collected before delivery of goods to the buyer is part of the sale price.

3. Maintainability of the Writ Petition:
The respondents contended that the writ petition was not maintainable as the Act provided an alternative remedy by way of revision. The court referred to the Supreme Court's decision, which held that statutory remedies should be exhausted before approaching the High Court. The court noted that the petitioner-company had the option to comply with the notice under section 44(1) of the Act or to prefer a revision under section 36 of the Act. The court found that the writ petition was premature as the petitioner had not availed of the alternative remedies provided by the Act.

Conclusion:
The court dismissed the writ petition, vacated the stay order, and directed the assessing officer to proceed and determine the tax liability of the petitioner-company in accordance with the decision after giving an opportunity to the petitioner-company of being heard. The court held that the surcharge collected by the petitioner-company must be included in the sale price for the purpose of levying sales tax, and the writ petition was premature due to the availability of an alternative remedy.