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TMI Blog1991 (10) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... nt sold to Government and Government companies. In G.O. Ms. No. 77, dated January 24, 1987, the rate of sales tax was reduced to 4 per cent on cement sold to manufacturers of cement products. In G.O. Ms. No. 78, dated January 24, 1987, the rate of sales tax under the Central Act was reduced to 2 per cent on inter-State sales of cement whether or not the returns were accompanied by C form. These orders were brought into force with effect from 1st January, 1987. The validity of the orders passed by the Government in G.O. Ms. Nos. 77 and 78 was questioned by India Cement Company, Madras and others in the Supreme Court in Indian Cement Ltd. v. State of Andhra Pradesh [1988] 69 STC 305. The Supreme Court quashed the said G.Os. as being violative of articles 301, 303 and 304 of the Constitution of India. As a follow-up action the Commercial Tax Officers made provisional assessment and raised a demand for the arrears of tax representing the difference between statutory rates and the concessional rates. The validity of the orders of provisional assessment is assailed in these writ petitions. Writ Petitions Nos. 8127, 8146, 8520, 9159, 9178, 9181, 9321, 9337 and 10841 of 1988 relate to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and inequitable to demand difference of tax from the petitioners as this would result in great hardship to the dealers. The learned Government Pleader, on the other hand, has contended that the judgment of the Supreme Court quashing the said G.Os. does not lay down that the judgment would not affect the past transactions, as such it is open to the Commercial Tax Officers to demand the arrears of tax treating that the G.Os. are non est; the effect of the judgment of the Supreme Court is, submits the learned Government Pleader, that the uniform rate of tax should be collected from all the dealers, therefore, the demand for arrears of tax, in so far as it relates to the difference in the rates, is justified and legal. Having regard to these contentions of the learned counsel we shall consider the question referred to above. In Indian Cement's case [1988] 69 STC 305, the Supreme Court has held that variation of rate of inter-State sales tax does affect free trade and commerce and creates a local preference which is contrary to the scheme of Part XIII of the Constitution. So both the Notifications (G.O. Ms. Nos. 77 and 78, dated January 24, 1987) of the Andhra Pradesh Government ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counter-affidavit of the respondents, the case of the petitioners that they did not collect any amount in excess of the concessional rate during the period in question has to be accepted. Now we shall refer to the cases cited at the Bar. Collector of Customs and Central Excise v. Oriental Timber Industries AIR 1985 SC 746: This case arose under the Central Excises and Salt Act. The assessment of excise duty was made on plywood circles after the same was produced and not on plywood as and when the same came out of the press. This mode of assessment was adopted by the excise authorities. The excise authorities sought to change the mode of assessment in view of audit objection. The change introduced in the mode of assessment was questioned before the High Court by the assessee. The High Court upheld the contention of the assessee. On appeal by the Collector, Central Excise, the Supreme Court allowed the appeal. On the question whether the assessee would be liable to pay the excess amount of excise duty for these years, the Supreme Court observed that no assessment for all those years on the basis of the impugned notices had been made or could have been made and to make fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashing of notification on the ground that it was void ab initio might lead to undue hardship for the dealers in the State of Bihar who might have sold locally manufactured hosiery goods without taking into consideration any amount on account of the liability to sales tax, in view of the exemption granted by the impugned notification, therefore, the arrears of sales tax which would become payable by the dealer in the State of Bihar in respect of the sale of local hosiery goods made during the period when the notification was in operation, should not be collected. Video Electronics Pvt. Ltd. v. State of Rajasthan [1988] 71 STC 304 (SC): In that case which arose under the Rajasthan Sales Tax Act a notification reducing the rate of tax on sales of goods manufactured within the State was held to be invalid and was quashed. It was observed that all the concerned parties would pay tax at the uniform higher rate. It was further held that in view of the facts and circumstances of the case and in view of that order, the past transaction would not be affected. Hi-Beam Electronics Pvt. Ltd. v. State of Andhra Pradesh [1988] 71 STC 305 (SC): That case also arose under the Andhra Pradesh G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid decisions of the Supreme Court. This resulted in local dealers of Andhra Pradesh filing applications before the Supreme Court and the Bench consisting of Sabyasachi Mukherji and S. Ranganathan, JJ., passed orders on the 18th July, 1988 in W.P. No. 676 of 1988 (unreported) restraining the State of Andhra Pradesh from demanding and realising the differential tax under the A.P. General Sales Tax Act as well as the Central Sales Tax Act to the tune of Rs. 2,14,929 on the basis of the assessment order dated 30th April, 1988 for the assessment years 1986-87 and 1987-88. It may be noticed that, in the latter two of the aforesaid reported cases, the Supreme Court while striking down the impugned G.Os. 77 and 78 gave a relief in relation to the past transactions to the local dealers also though they are not parties before it. As observed earlier in the case of Indian Cements [1988] 69 STC 305 the difficulty of the local dealers was not brought to the notice of the Supreme Court and therefore the Supreme Court did not pass any order while striking down the G.O. Ms. Nos. 77 and 78 which has necessitated the passing of the aforesaid separate order dated 18th July, 1988 in W.P. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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