2002 (6) TMI 581 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Constitutional validity of sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957.
2. Whether the power conferred under sections 14(4-C) and 20 is arbitrary and violative of Article 14 of the Constitution.
3. Whether the initiation of proceedings under section 20 based on a Supreme Court judgment is justified.

Detailed Analysis:

1. Constitutional Validity of Sections 14(4-C) and 20:

The petitioner challenged the constitutional validity of sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957. The court noted that the petitioner failed to provide a sufficient factual matrix to support the claim that these sections were unconstitutional. The burden of proving the unconstitutionality of an enactment lies with the petitioner, who must show a clear transgression of constitutional principles. The court emphasized that the presumption is always in favor of the constitutionality of a statute, and the courts generally lean towards upholding the constitutionality of economic and tax legislation.

2. Arbitrary Power and Article 14:

The petitioner contended that sections 14(4-C) and 20 confer uncontrolled, unbridled, and uncanalised power on the authorities, thus violating Article 14 of the Constitution. The court rejected this argument, stating that the power conferred by these sections is not arbitrary. The revising authority under section 20 can exercise its power only if it is satisfied that an order or proceeding is prejudicial to the interests of the revenue. This requirement acts as a jurisdictional fact and a limitation on the power of the authority. The court held that the expression "prejudicial to the interests of the revenue" should be understood in terms of law, not arbitrarily. The court further noted that any misuse or abuse of power by the authorities could be challenged through statutory remedies or judicial review.

3. Initiation of Proceedings Based on Supreme Court Judgment:

The petitioner argued that the Supreme Court's judgment in Vijayalaxmi Cashew Company should not affect already concluded assessments and should be applied prospectively. The court dismissed this argument, stating that the declaration of law by the Supreme Court applies to all relevant sales and purchases, whether before or after the judgment. The court cited previous decisions, including Al-Kabeer Exports Ltd. v. Commissioner of Commercial Taxes, to support this view. The court also rejected the contention that the petitioner did not collect tax based on earlier judgments, emphasizing that the burden of proof lies with the petitioner.

Conclusion:

The court upheld the constitutional validity of sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957. The writ petitions were dismissed, and the court found no merit in the petitioner's arguments regarding the arbitrariness of the power conferred by these sections or the prospective application of the Supreme Court's judgment. The court emphasized that the power conferred by these sections is subject to legal limitations and safeguards, ensuring that it is not exercised arbitrarily.