Premier Enterprises, Secunderabad Vs. Commercial Tax Officer & Anr.
EmailAppeal: Civil Appeal No. 11410 of 1995
with
Civil Appeal Nos. 11411-11412 and 11413-11414 of 1995
with
Civil Appeal Nos. 11411-11412 and 11413-11414 of 1995
Petitioner: Premier Enterprises, Secunderabad
Respondent: Commercial Tax Officer & Anr.
Apeal: Civil Appeal No. 11410 of 1995
with
Civil Appeal Nos. 11411-11412 and 11413-11414 of 1995
with
Civil Appeal Nos. 11411-11412 and 11413-11414 of 1995
Judges: S. RAJENDRA BABU & S.N. PHUKAN, JJ.
Date of Judgment: Feb 03, 2000
Head Note:
TAXATION
Commercial Tax – Act 26 of 1988
Validity – Challenged on three grounds – First, the retrospective effect given to the enactment – Second, levy is discriminatory between local and imported goods – Thirdly, on the interpretation of the provisions regarding rate of tax for a particular transaction – High Court dismissing on all the three points – SLP filed – Whether the interpre-tation given by High Court is justified. Held. Yes, Legislature has the necessary competence to make retrospective levy of tax. Inability to realise the tax, not a ground for holding the tax unreasonable. Levy of tax was remed-ial in nature. No discrimination. On interpretation of point of first sale or last sale also the view taken by the High Court upheld on the ground that the holder of licence in Form FL15 can sale liquor to the holder of licence in Form FL24 or FL17. Plea of last sale to a consumer immediately on import, is to be raised in the course of assessment or before other appro-priate authorities of the Act. Appeal dismissed.
JUDGEMENT:
ORDER
1. In these five appeals, the question raised pertains to the validity of Act 26 of 1988 passed by the Andhra Pradesh State Legislature which came into force on 5.9.1988 having retrospec-tive effect from 8.7.1983.
2. Though several contentions had been raised before the High Court and in memorandum of appeal, ultimately three points were urged for our consideration. Firstly, that the retrospective effect given to the enactment in question from 8.7.1983 results in oppressive and unreasonable levy spreading over a long period of about five years. Secondly, that the levy in question is discriminatory so far as the local goods and imported goods are concerned. Thirdly and lastly, on the interpretation of the provision as to what is the rate of tax that is attracted in respect of a particular transaction. On all the three points the High Court decided against the Appellants.
3. The High Court in our view rightly held that the Legislature has necessary competence to make retrospective levy of tax. In-ability to realise the tax is not a ground to hold such levy to be unreasonable. In finding out whether the levy with retrospec-tive effect from 8.7.1983 was reasonable or not, the High Court noticed the legislative history and came to the conclusion that the action taken was remedial in nature and, therefore, is neith-er oppressive nor unreasonable and the period for which the tax was levied for similar reason was stated to be proper. We hardly find any good reason to interfere with the order made by the High Court.
4. The argument raised on behalf of the Appellants regarding discrimination also has been rejected by giving cogent reasons. The High Court has noticed the scope of the various provisions and examined the same at length and has rightly come to the conclusion that the levy does not result in any discrimination.
5. The last argument raised is with reference to the interpreta-tion of point of the first sale or the last sale arising in the Act. Originally the relevant provision contained an explanation to the following effect :
“Explanation: The point of last sale mentioned in this Schedule shall be the sale by a dealer holding a licence other than a wholesale licence under Rule 23 of the Andhra Pradesh (Foreign Liquor and Indian Liquor Rules, 1970).”
6. After amendment by Act 25 of 1988, the relevant position is as follows :
“16. Substitution of new Schedule for sixth Schedule to the principal Act, the following Schedule shall be substituted; namely:-
SIXTH SCHEDULE
_____________________________________
Description Point of levy Rate of tax
of goods
______________________________________
All liquors (a) At every point 25 paise in
other than of sale other the rupee.
toddy and than at the
arrack point of last
sale in the State
(b) At the point 5 paise in
of last sale in the rupee.
the State.
Provided that at any point of sale other than the first point of sale and the last point of sale, the turnover of the goods liable to tax shall be arrived at by deducting the turnover of such goods on which tax has been levied at the immediately preceding point of time.”
“Explanation : For the purpose of this Schedule :-
(a) ‘Point of first sale’ shall mean sale of liquor effected by a dealer who manufactures liquor in the State or imports liquor from outside the State to any other dealer or person:
(b) ‘Point of last sale’ shall mean sale of liquor to a person by a dealer who purchased liquor from another dealer in the State”.
The High Court proceeded on the basis that the Appellants in the case held, at the relevant time, two licences in Form FL 15 and in Form FL 24, Form FL 15 enabled the Appellants to deal with the goods as wholesalers and Form FL 24 enabled the Appellants to deal with the goods as retailers.
The High Court proceeded to notice that the holder of a licence in Form FL 15 is permitted to sell liquor in quantities of not less than 9 litres in sealed or capsuled bottles at any time and in any single transaction to licensees holding the licences in Form FL 24. i.e., the retail licence, FL 17, i.e., bar licence, etc. and is not permitted to carry on retail sale or allow con-sumption of liquor in the licensed premises. Licence holder in Form FL 24 is permitted to sale (sell?) liquor obtained only from the wholesale licences. On the facts stated, the view taken by the High Court is unexceptionable.
7. The contention put forth before us now by Shri A.T.M. Sampath, learned Counsel for the Appellants is that it is on this basis the High Court took the view that the Appellants are liable to pay tax at a higher rate and so far as the Appellants are con-cerned, the only sale effected by them is that immediately on import they sell under the retail licence given to them to a consumer directly and, therefore, results in a last sale. The sale effected by them is the only sale made by them and that is the first and the last sale. Whether it is so or not cannot be examined by us in the absence of the relevant facts. Notwith-standing the observations made by the High Court in this regard, it would be appropriate for the Appellants before us to raise such contentions in the course of assessment or other proceedings before authorities under the Act who shall be free to decide the cases on the facts arising in their cases.
8. The appeals stand dismissed subject to what is stated above.
9. There shall be no order as to costs.
1. In these five appeals, the question raised pertains to the validity of Act 26 of 1988 passed by the Andhra Pradesh State Legislature which came into force on 5.9.1988 having retrospec-tive effect from 8.7.1983.
2. Though several contentions had been raised before the High Court and in memorandum of appeal, ultimately three points were urged for our consideration. Firstly, that the retrospective effect given to the enactment in question from 8.7.1983 results in oppressive and unreasonable levy spreading over a long period of about five years. Secondly, that the levy in question is discriminatory so far as the local goods and imported goods are concerned. Thirdly and lastly, on the interpretation of the provision as to what is the rate of tax that is attracted in respect of a particular transaction. On all the three points the High Court decided against the Appellants.
3. The High Court in our view rightly held that the Legislature has necessary competence to make retrospective levy of tax. In-ability to realise the tax is not a ground to hold such levy to be unreasonable. In finding out whether the levy with retrospec-tive effect from 8.7.1983 was reasonable or not, the High Court noticed the legislative history and came to the conclusion that the action taken was remedial in nature and, therefore, is neith-er oppressive nor unreasonable and the period for which the tax was levied for similar reason was stated to be proper. We hardly find any good reason to interfere with the order made by the High Court.
4. The argument raised on behalf of the Appellants regarding discrimination also has been rejected by giving cogent reasons. The High Court has noticed the scope of the various provisions and examined the same at length and has rightly come to the conclusion that the levy does not result in any discrimination.
5. The last argument raised is with reference to the interpreta-tion of point of the first sale or the last sale arising in the Act. Originally the relevant provision contained an explanation to the following effect :
“Explanation: The point of last sale mentioned in this Schedule shall be the sale by a dealer holding a licence other than a wholesale licence under Rule 23 of the Andhra Pradesh (Foreign Liquor and Indian Liquor Rules, 1970).”
6. After amendment by Act 25 of 1988, the relevant position is as follows :
“16. Substitution of new Schedule for sixth Schedule to the principal Act, the following Schedule shall be substituted; namely:-
SIXTH SCHEDULE
_____________________________________
Description Point of levy Rate of tax
of goods
______________________________________
All liquors (a) At every point 25 paise in
other than of sale other the rupee.
toddy and than at the
arrack point of last
sale in the State
(b) At the point 5 paise in
of last sale in the rupee.
the State.
Provided that at any point of sale other than the first point of sale and the last point of sale, the turnover of the goods liable to tax shall be arrived at by deducting the turnover of such goods on which tax has been levied at the immediately preceding point of time.”
“Explanation : For the purpose of this Schedule :-
(a) ‘Point of first sale’ shall mean sale of liquor effected by a dealer who manufactures liquor in the State or imports liquor from outside the State to any other dealer or person:
(b) ‘Point of last sale’ shall mean sale of liquor to a person by a dealer who purchased liquor from another dealer in the State”.
The High Court proceeded on the basis that the Appellants in the case held, at the relevant time, two licences in Form FL 15 and in Form FL 24, Form FL 15 enabled the Appellants to deal with the goods as wholesalers and Form FL 24 enabled the Appellants to deal with the goods as retailers.
The High Court proceeded to notice that the holder of a licence in Form FL 15 is permitted to sell liquor in quantities of not less than 9 litres in sealed or capsuled bottles at any time and in any single transaction to licensees holding the licences in Form FL 24. i.e., the retail licence, FL 17, i.e., bar licence, etc. and is not permitted to carry on retail sale or allow con-sumption of liquor in the licensed premises. Licence holder in Form FL 24 is permitted to sale (sell?) liquor obtained only from the wholesale licences. On the facts stated, the view taken by the High Court is unexceptionable.
7. The contention put forth before us now by Shri A.T.M. Sampath, learned Counsel for the Appellants is that it is on this basis the High Court took the view that the Appellants are liable to pay tax at a higher rate and so far as the Appellants are con-cerned, the only sale effected by them is that immediately on import they sell under the retail licence given to them to a consumer directly and, therefore, results in a last sale. The sale effected by them is the only sale made by them and that is the first and the last sale. Whether it is so or not cannot be examined by us in the absence of the relevant facts. Notwith-standing the observations made by the High Court in this regard, it would be appropriate for the Appellants before us to raise such contentions in the course of assessment or other proceedings before authorities under the Act who shall be free to decide the cases on the facts arising in their cases.
8. The appeals stand dismissed subject to what is stated above.
9. There shall be no order as to costs.
