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TMI Blog1956 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Appellate Assistant Commissioner of Agricultural Income Tax and Sales Tax, Ernakulam, in ESTA. 116 117/52-53 on appeal; (3) the order dated 10th December, 1954, passed by the 3rd res- pondent, the Deputy Commissioner of Agricultural Income Tax and Sales Tax, Trivandrum, in Sales Tax Revision No. 368 and 369/54; and (4) the order, No. D. Dis. 756/55, dated 17th September, 1955, passed by the 4th respondent, the Sales Tax Commissioner, Trivandrum, in Sales Tax Revision Case No. 10/55. 2.. The order of the 3rd respondent, the Deputy Commissioner of Agricultural Income Tax and Sales Tax, Trivandrum, gives the necessary background to the contentions urged before me and reads as follows: "It is submitted that the Appellate Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er immovable property or the fitting out, improvement or repair of any movable property." 4.. The relevant portion of the definition of "turnover" [section 2(k)] reads as follows: "The aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration............ Explanation.-Subject to such conditions and restrictions, if any, as may be prescribed in this behalf: (i) the amount for which goods are sold shall, in relation to a works contract, be deemed to be the amount payable to the dealer for carrying out such contract less such portion as may be prescribed of such amount, representing the usual proportion of the cost of labour to the cost of materials used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue but to leave the fixation itself to the Board of Revenue subject to the maximum percentages indicated therein. As a result the non-fixation of percentages by the Board may mean that no deduction is admissible until they are fixed or that no sales tax is attracted until the fixation is effected, the result being entirely dependent on the answer to the question as to whether the provision for a fixation of percentages by the Board of Revenue is a condition precedent to the levy or not. 6.. The arguments before me proceeded on the assumption that the maximum percentages specified in sub-rule (3) have as a matter of fact been fixed as admissible deductions. In view of this I do not think I need express any definite opinion on this poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... percentages as may be fixed by the Commissioner for different areas subject to the following maximum percentages, namely: (a) In the case of an electrical contract 20 per cent. (b) In the case of a structural contract 30 per cent. (c) In the case of a sanitary or gas contract 33 1/3 per cent. (d) In the case of overhaul or repair of any motor vehicle 60 per cent. (1) [1955] 6 S.T.C. 93. (e) In the case of other contracts 30 per cent.' " and said: "In my view, this artificial and palpably unnatural determination of the price of goods cannot be said to square with the powers given by the Constitution Act to levy a tax on the 'sale of goods'. The tax is not laid in the Act on different articles and commodities supplied by the contractor but o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods involved in such transactions can be made by a rule of thumb applicable in any particular area on the basis of the Commissioner's will. I, therefore, hold section 2(h)(ii) and rule 4 ultra vires." 8.. There was no attempt to distinguish the decision and as I am in agreement with the reasoning embodied in the paragraphs reproduced above I must hold that sub-rule (3) of rule 4 and that portion of the definition of the expression "turnover " given in section 2(k) of the Act which supports such a rule are ultra vires of the powers of the State Legislature. 9.. The only further contention that remains to be noticed is the contention of the learned Government Pleader that the question of ultra vires should not be allowed to be raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was fair-copied or signed it struck me that a question which was not dealt with at the Bar may prove to be of considerable importance. The question is: "What, if any, is the effect of the fact that the Travancore-Cochin General Sales Tax Act, 1125, received the assent of His Highness the Raj Pramukh on 5th January, 1950, and was published in the Gazette dated 17th January, 1950, though the notification bringing it into force with effect from 30th May, 1950, in exercise of the powers conferred by section 1(c) of the Act was issued and published only after the Consti- tution came into force?" Following the practice adopted by the Court of Appeal in Hedger v. Shutler(4) I direct that the O.P. be posted before me on 19th March, 1956. Order da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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