Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2001 (1) TMI HC This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2001 (1) TMI 938 - HC - VAT and Sales Tax

Issues Involved:
1. Constitutionality of the notification S.R.O. No. 291/2000 under the Kerala General Sales Tax Act, 1963.
2. Discrimination between poultry farmers within Kerala and those outside the State.
3. Violation of Articles 301 and 304(a), (b) of the Constitution.
4. Validity of provisional taxation notice (Exhibit P5).

Issue-wise Detailed Analysis:

1. Constitutionality of the Notification S.R.O. No. 291/2000:

The petitioner challenged the amendments brought by S.R.O. No. 291/2000 to S.R.O. No. 1090/99, specifically targeting the phrase "within the State" in item No. 14 of the First Schedule. The petitioner argued that this differentiation was unconstitutional as it violated Articles 301 and 304(a), (b) of the Constitution by discriminating against poultry farmers outside Kerala.

2. Discrimination Between Poultry Farmers Within Kerala and Those Outside the State:

The petitioner contended that the notification unfairly favored poultry farmers within Kerala by granting them tax exemptions, while denying the same to those outside the State. Citing precedents like Associated Cement Companies Ltd. v. Assistant Commissioner (Assessment), Sales Tax [1996] 101 STC 28 (Ker) and Shree Mahavir Oil Mills v. State of Jammu and Kashmir [1997] 104 STC 148 (SC), the petitioner argued that such discrimination was impermissible under the Constitution.

However, the court found that sufficient materials were not presented to establish that the exemption interfered with the petitioner's rights under Part XIII of the Constitution. The court noted that the petitioner failed to prove that the goods (chickens) were "similar" as required under Article 304. The court emphasized the presumption of constitutionality for statutory orders and held that the petitioner did not discharge his burden to prove otherwise.

3. Violation of Articles 301 and 304(a), (b) of the Constitution:

The petitioner argued that the notification violated Articles 301 and 304(a), (b) by restricting free trade and commerce across State boundaries. The court referred to the Supreme Court's decision in Video Electronics Pvt. Ltd. v. State of Punjab [1990] 77 STC 82 (SC), which held that exemptions granted by States for economic development do not necessarily contravene the Constitution. The court concluded that the exemption granted to Kerala poultry farmers did not amount to an unconstitutional economic barrier and was a valid exercise of the State's powers under the Kerala General Sales Tax Act.

4. Validity of Provisional Taxation Notice (Exhibit P5):

The petitioner also challenged Exhibit P5, a notice for provisional taxation. The court noted that the petitioner's claim of rearing chickens in Tamil Nadu lacked credibility due to insufficient evidence and the improbability of the numbers claimed. The court highlighted practical difficulties in verifying such claims and upheld the State's skepticism regarding the petitioner's credentials.

The court concluded that the notification aimed to boost inter-State trade and did not violate constitutional provisions. The petitioner's challenge to the notification and the provisional taxation notice failed, and the original petition was dismissed.

Conclusion:

The original petition was dismissed, with the court upholding the constitutionality of the notification S.R.O. No. 291/2000 and rejecting the claims of discrimination and violation of constitutional provisions. The provisional taxation notice (Exhibit P5) was also upheld.

 

 

 

 

Quick Updates:Latest Updates