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TMI Blog2011 (11) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant : Mr Randhir Chawla and Ms. Renu Sahgal For the Respondent : Mr A. K. Babbar BADAR DURREZ AHMED (ORAL) 1. In these references, the following questions have been referred to us for our opinion:- a) Whether on the facts and circumstances of the case, the sales tax has been rightly imposed on the sales of cotton yarn amounting to Rs.34,67,657.83 under the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi ? b) Whether the Tax imposed on cotton yarn under the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi, is in accordance with law irrespective of the fact that no stage of imposition has been fixed under the said Act? c) Whether under the Bengal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be taxed at more than one stage. The issue arose because the stage itself had not been clearly specified. The Financial Commissioner in the case of M/s Govind Saran Ganga Saran had held that in the absence of any stage, there was a lacuna in the law and consequently cotton yarn could not be taxed under the sales tax regime. The decision of the Financial Commission in the case of M/s Govind Saran Ganga Saran was reversed by the Delhi High Court. The matter was taken in the appeal before the Supreme Court and was pending before the Supreme Court. In another case namely Dina Nath and Sons (37 STC 357) which was also heard along with the case of M/s Govind Saran Ganga Saran, the Delhi High Court did not approve the view of the Financial C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi, is in accordance with law irrespective of the fact that no stage of imposition has been fixed under the said Act? 3. Whether under the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi, the tax imposed on cotton yarn without fixing the stage of imposition is in conformity with the provisions of Section 15 of the Central Sales Tax Act, 1956? 4. Whether on the facts and in the circumstances of the case the tax imposed on cotton yarn declared to be of Special importance under Section 14 of the Central Sales Tax Act, 1956, is in accordance with law? The Tribunal declined to do so, relying upon the Delhi High Court s Judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictions and conditions mentioned therein. One of the conditions was that tax payable under the law in respect of sale and purchase of such goods inside the State shall not exceed 3 per cent of the sale or purchase price thereof. Another condition is that the tax shall not be levied at more than one stage. The Supreme Court further observed as under:- In the instant case, were are concerned with the taxation of goods which under Section 14 of the Central Sales Tax Act have been declared to be of special importance in inter-State trade or commerce. Where the turnover of such goods is subjected to tax under the sales tax law of a State, section 15 prescribes the maximum rate at which such tax may be imposed and requires that such tax shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity. The Supreme Court also observed as under:- We are of opinion that there is ample power under section 5A of the State Act enabling the Chief Commissioner to specify the single point at which tax may be levied in a series of sales. This can, however, be done by him only by a notification in the Official Gazette. No such notification has been placed before us which could relate to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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