9911796707
TMI Blog2009 (2) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, we reject the contention of the appellants that section 47(16A) does not authorise collection of tax before sale. Consequently we hold that the impugned circulars authorising collection of tax in advance prior to sale of the commodities referred to therein are in accordance with the statutory provisions. We are not impressed with the argument of the appellants that their rights under article 19(1)(g) are violated inasmuch as before the incidence of tax falls, they are made to pay the tax because for sale of commodity from the beginning to the end of a month, the dealers are allowed to keep the tax until the 10th of the succeeding month when they are required to remit the monthly tax. Since the statute authorises dealers to reta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 47(16A) and the two circulars issued by the Commissioner on the ground that the same are unconstitutional, illegal and arbitrary. However, the learned single judge upheld the constitutional validity of the statutory provision and the validity of the circulars issued thereunder, against which these appeals are filed. We have heard Senior Counsel Dr. K.B. Mohammed Kutty and other counsel appearing for the appellants and the Special Government Pleader appearing for the respondents. During hearing of appeals, counsel for both sides informed the court that by virtue of subsequent amendment to the circulars, the Commissioner has excluded lifts, elevators and escalators and petroleum products other than LPG from payment of advance tax. Simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id before the date prescribed for its payment under this Act. The contention of the appellants that the section does not authorise recovery of tax in advance is overruled by the learned single judge holding that such an interpretation will lead to absurdity and would defeat the purpose of the Act. We are in complete agreement with this finding of the learned single judge because collection of tax after sale of goods on any anterior date could be achieved by the State through amendment to rule 22 of the KVAT Rules which provides for filing of monthly return and payment of tax along with the same on the 10th of the succeeding month. What the Legislature intends is to identify evasion-prone goods and to recover the tax for the same in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, i.e., prior to sale of goods, then such provision is unconstitutional. The Special Government Pleader appearing for the respondents contended that tax paid in advance is allowed to be taken credit by the dealer along with the next monthly return and so much so that, according to him, tax though recovered in advance from the dealer, is not treated as tax payable for the commodity brought from outside the State. We completely agree with this contention because the recovery of tax in advance acts as a security towards payment of tax for the commodity later. In fact, in effect the collection of tax on arrival of goods ensures accounting of goods by the dealer. The dealer paying tax in advance for the commodity takes it into stock and sells ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly, the appellants are engaged in trading and the goods in respect of which advance tax is collected are goods brought for sale on which tax will be eventually payable by them. We have already noticed that the collection of tax on arrival of goods in the State serves only as a security and for accounting purposes and the State does not in fact collect the tax for the commodity before its sale. The Special Government Pleader submitted that the goods covered by notification are generally sold in bulk and there are several instances where goods are seen brought to the State in bogus names and some unscrupulous dealers bring goods with the name and registration numbers of other dealers. According to him, if tax is not collected in advance on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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