2000 (3) TMI 1051 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of the circular/letter dated August 16, 1993, issued by the Commissioner of Taxes, Assam.
2. Interpretation of the Assam General Sales Tax Act, 1993, concerning sales tax on goods purchased before July 1, 1993.
3. Competence of the Commissioner of Taxes in issuing the circular.
4. Applicability of the provisions of the Assam Finance (Sales Tax) Act, 1956, post-repeal by the Assam General Sales Tax Act, 1993.
5. Impact of repeal and savings provisions under Section 74 of the Assam General Sales Tax Act, 1993.

Issue-wise Detailed Analysis:

1. Validity of the circular/letter dated August 16, 1993, issued by the Commissioner of Taxes, Assam:
The petitioner challenged the circular dated August 16, 1993, issued by the Commissioner of Taxes, Assam, as ultra vires of the Assam General Sales Tax Act, 1993. The circular mandated registered dealers to pay sales tax on the sale of goods to unregistered dealers or consumers, irrespective of whether the goods were purchased before or after July 1, 1993.

2. Interpretation of the Assam General Sales Tax Act, 1993, concerning sales tax on goods purchased before July 1, 1993:
The petitioner argued that under the Assam Finance (Sales Tax) Act, 1956, component parts of motor vehicles were taxed at the point of first sale at 12%. The Assam General Sales Tax Act, 1993, which came into force on July 1, 1993, introduced a tax at the point of the last sale at 6%. The petitioner contended that goods purchased before July 1, 1993, should not be subject to the new tax regime.

3. Competence of the Commissioner of Taxes in issuing the circular:
The petitioner asserted that the Commissioner acted beyond his jurisdiction in issuing the circular, which was contrary to the provisions of the 1993 Act. The State Counsel argued that the Commissioner was competent to clarify the provisions regarding the levy of tax on the second/last sale.

4. Applicability of the provisions of the Assam Finance (Sales Tax) Act, 1956, post-repeal by the Assam General Sales Tax Act, 1993:
The court examined whether any indefeasible right was vested in the registered dealers under the 1956 Act concerning goods purchased before July 1, 1993, and sold after that date. The 1956 Act did not provide for tax at the last point of sale, whereas the 1993 Act introduced this requirement.

5. Impact of repeal and savings provisions under Section 74 of the Assam General Sales Tax Act, 1993:
The court analyzed Section 74 of the 1993 Act, which provided for the repeal of the 1956 Act and other laws. The court noted that the new taxation policy, effective from July 1, 1993, introduced a double point tax system, including a tax at the last point of sale. The court held that the provisions of the 1993 Act were clear and that the tax at the last point of sale was applicable regardless of when the goods were purchased.

Conclusion:
The court dismissed the writ petition, holding that the circular issued by the Commissioner of Taxes was valid and within the scope of the Assam General Sales Tax Act, 1993. The court found that the new tax regime applied to sales made on or after July 1, 1993, regardless of when the goods were purchased. The stay order granted earlier was vacated, and no order as to costs was made.

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