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TMI Blog1988 (7) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... r trade and business, they purchase goods, both within the State of Bihar as also outside the State of Bihar. In this writ petition, we are concerned with the purchases of declared goods made from outside the State of Bihar. In the impugned assessment orders, the petitioners have been charged to pay sales tax on the sale of those declared goods which have been purchased outside the State of Bihar, to registered dealers within the State of Bihar. The amount of purchase of the declared goods from outside the State of Bihar is not in dispute. What is being disputed is that no sales tax is at all leviable on its sale in the State of Bihar, they being declared goods under section 3A of the Bihar Sales Tax Act, 1959, irrespective of the purchase of those declared goods from outside the State of Bihar or within the State of Bihar. In short, the declared goods under section 3A are immune from the payment of sales tax. 3.. Section 3A of the Bihar Sales Tax Act, 1959 was introduced with effect from 1st May, 1966, by section 11 of the Bihar Finance Act, 1966. This section was amended on 1st November, 1970, by the Bihar Sales Tax (Amendment) Ordinances of 1970 and 1971. Section 3A has furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I in which the returns are required to be filed, prescribes under rule 10(1) of the Bihar Sales Tax Rules, 1959, only purchase price of the gross turnover on the sale value of the goods declared under section 3A is to be excluded from the gross turnover. It is said that only when purchase tax has been levied on any particular commodity under section 3A of the Bihar Sales Tax Act, 1959, purchase price of such commodity is only to be included in the gross turnover for the purpose of assessment and the sale value of such goods is not specifically required to be included in the gross turnover. The other submission of the learned counsel is that if a purchase is made on a declared goods from outside the State of Bihar and then made liable for sales tax on sale of such declared goods within the State, it would be violative of article 14 of the Constitution of India, inasmuch as tax burden is bound to increase as the sale price will be higher as it would have to include transportation charges, insurance, profit, etc., which will be more than the purchase price of the said goods. This will lead to the practice of levying discriminatory rate of local sales tax. 6.. Mr. Gaddodia, on the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3A is liable to sales tax in accordance with the provision of sub-section (2) of section 5, the rate of special sales tax shall be the same as may be applicable for charges of levy of purchase tax on such goods. The rate of purchase tax and/or sales tax on declared goods, therefore, is same. Section 3A exempts the payment of sales tax on sale of declared goods within the State as indicated by section 5 of the Act, provided purchase tax has been levied on any such goods. It, therefore, shows that mere declaration of certain goods liable to purchase tax under section 3A does not ipso facto attract exemption from payment of sales tax, unless there has been actual levy of purchase tax on such goods in the State. What does the words appearing in section 3A "where tax on purchase has been levied on any such goods" mean? Black's Law Dictionary, Fifth Edition, says, the word "levy" means to assess, exact, raise or collect a tax. In the case of Rayalseema Constructions v. Deputy Commercial Tax Officer [1959] 10 STC 345 (Mad.), the word "levy" meant as hereunder: "The word 'levy' is frequently used to include both of the first two stages involved in the process of taxation, viz., the lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax. Even section 5(2) of the Act will not permit the second registered dealer to collect sales tax on the sale of those goods, as the incidence of sales tax is at the point of sale by the first registered dealer. There is a further anomaly in the argument of the learned counsel which would be manifest from the fact that registered dealers purchasing declared goods within the State from a person other than a registered dealer, those goods will bear purchase tax in the State, whereas a registered dealer purchasing the said declared goods from outside the State, those goods will be exempt from both purchase tax and sales tax in the State. This will not only frustrate the very object of the levy of tax on sale and purchase of goods in Bihar, but will cause discrimination inter se between registered dealers transacting in declared goods. Entry 54 of List II empowers the State to collect tax on the sale or purchase of goods. As the State under section 3A collects in the instant case either purchase tax or sales tax on declared goods, on transactions within the State of Bihar, I think, there is no legislative incompetence of the provisions made under section 3A of the Act. Reliance by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same rate. On the other hand, if the goods have borne the purchase tax within the State, it is exempted from the payment of sales tax. 12.. The last submission of the learned counsel for the petitioner that the declared goods purchased from outside the State, when subjected to the payment of sales tax, the tax has to be paid on a higher price since the purchase price and the sale price is bound to vary. In short, what is sought to be contended is that when a registered dealer makes purchase of the same commodity within the State, the purchase tax liability on the value of purchase will be less, whereas when a person imports goods from outside the State, even though he has paid less purchase price, his sale price, however, will be more than the purchase price as it would include other costs and, therefore, according to the learned counsel, the person similarly situated will bear higher incidence of tax even though the rate of tax may be the same. I do not find any substance in this argument as well because persons similarly situated pay the tax at one and the same rate. Therefore, there could be no question of any discrimination. Therefore there is no substance in any of the point ..... X X X X Extracts X X X X X X X X Extracts X X X X
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