9911796707
TMI Blog1968 (9) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... oil, lubricating oils and greases. The other assessee is a partnership firm and a dealer in similar oils which it purchases from one or the other of the leading dealers and sells in retail. The first sales of lubricating oils and greases, under entry 47 in the First Schedule to the Madras General Sales Tax Act, 1959, were charged to a single point tax at six per cent. With effect from 1st April, 1964, Madras Act VII of 1964 substituted it by a fresh entry, lubricating oils, all kinds of mineral oils (not otherwise provided for in the Act), quenching oils and greases. Till 13th September, 1965, it is stated, the trade proceeded on the assumption that the substitution made no difference to sales of furnace oil and they were, as before, liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted or purported to have been levied or collected under the principal Act on the sale of the goods specified in entry 47-A for the period 1st April, 1964, to 5th January, 1968. It is contended that the retrospective imposition of a single point tax on furnace oil and other non-lubricating oils and the validation of levies prior to 5th January, 1968, involving refusal of refund are ultra vires and void as they violate Articles 14 and 19 of the Constitution. The retrospective operation and the validation, according to the assessees, violated equality under the law and also constituted an unreasonable restriction. In our opinion, the attack cannot be sustained. It is entirely based on the absence of a scheme of licensing, and provisions requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable restriction to require them, they say, to prove that their transactions were not liable to tax. Further, such retrospective operation deprived the dealers of the opportunity to collect tax or pass on the tax burden to other dealers or consumers. The advance knowledge of tax incidence is a primary element of reasonableness in indirect taxation and this element is entirely lacking because the dealers could not have visualised prior to the Board's resolution aforesaid that there would be a liability for a higher rate of single point tax in respect of first sales of furnace oil. The petitioners add that these are not cases where there had been in fact tax levy in operation but subsequently some infirmity in the law led to a judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not per se render the law unconstitutional on the ground of its infringing the right to hold property under Article 19(1)(f) or on the ground that it was unreasonable because it deprived a citizen of his right to pass on the tax to others. Rai Ramkrishna v. State of Bihar [1963] 50 I.T.R. 171; A.I.R. 1963 S.C. 1667. recognised that a taxing statute could be struck down as being unreasonable and so violative of Article 19(1). So too, if the taxing statute is plainly discriminatory or provides no procedural machinery for assessment and levy of tax or is confiscatory, it will be held to be unconstitutional as exceeding the limits prescribed by Articles 19 and 14. C. Krishna Moorthy v. State of Orissa[1964] 15 S.T.C. 461; A.I.R. 1964 S.C. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The inhibition of ex post facto laws does not apply to imposition of taxes by retrospective legislation. But if the retrospectivity is in its effect confiscatory or operates as a cloak of an oblique legislative purpose removed from ostensible tax considerations, or so totally oppressive as might destroy the very source of taxation, it may be regarded as unreasonable. Mr. Thiruvenkatachari, who appeared for the petitioners, suggested that to satisfy the test of reasonableness for prospective tax laws, their incidence or burden should not be so high as to make the holding of property or carrying on business unremunerative according to the accepted current standards of yield or profit, even after allowing for progressive taxation. But he hims ..... X X X X Extracts X X X X X X X X Extracts X X X X
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