Collector of Customs and anr. Vs. State of W.B. and anr.

Collector of Customs and anr. vs State of W.B. and anr.

Disposition Appeal And SLP Dismissed Court Supreme Court of India Decided Jul 30, 1998

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Citation: sooperkanoon.com/666041
Court: Supreme Court of India
Judge: S.P. Bharucha and; K. Venkataswami, JJ.
Decided On: Jul 30, 1998
Case Number: Civil Appeal No. 910 of 1992 with SLP (C) No. 13393 of 1997
Subject: Sales Tax
Disposition: Appeal And SLP Dismissed

Case Summary

AI-generated summary - not the official court judgment text.

- [ S.P. Bharucha and; K. Venkataswami, JJ.] -- Sales Tax — Dealer — Expression “dealer” as defined in Section. 2(c) of Bengal Finance (Sales Tax) Act — Scope — Collector of Customs when selling goods confiscated under Customs Act for non-payment of customs duty, held, covered &m...

Key legal issue: Sales Tax
Outcome / disposition: Appeal And SLP Dismissed
Acts & sections: Bengal Finance (Sales Tax) Act, 1941 - Sections 2(c), 4; Customs Act, 1962; Constitution Of India - Article 285

Parties & Advocates

Appellant / Petitioner

Collector of Customs and anr.

Respondent

State of W.B. and anr.

Legal References

Acts: Bengal Finance (Sales Tax) Act, 1941 - Sections 2(c), 4; Customs Act, 1962; Constitution Of India - Article 285
Reported In: 1998(102)ELT513(SC); (1999)1SCC192; [1999]113STC167(SC)

Excerpt

- [ s.p. bharucha and; k. venkataswami, jj.] -- sales tax - dealer - expression “dealer” as defined in section. 2(c) of bengal finance (sales tax) act - scope - collector of customs when selling goods confiscated under customs act for non-payment of customs duty, held, covered - further held, article. 285 did not render such sale immune from sale tax - liability to tax - bengal finance (sales tax) act, 1941 (6 of 1941), sections. 2(c) and 4 - words and phrases -- this court said that at the time of their sale, the goods belonged to the railways. the tax had been imposed on such sale. in view of the provisions of article 285, such sale was immune from taxation under the state law. in the sea customs act case3 a nine-judge bench of this court opined by a majority, that article 285 envisaged immunity from direct taxes and not from indirect taxes such as sales tax. with specific reference to sales tax, this court said: in neither case therefore can it be said that the excise duty or sales tax is a tax directly on the goods for in that event they will really become the same tax......from taxation under the state law.4. it would appear that no real arguments were advanced before this court by the appellant-state and the judgment of this court in sea customs act (1878), s. 20(2), re3 was not pointed out. in the sea customs act case3 a nine-judge bench of this court opined by a majority, that article 285 envisaged immunity from direct taxes and not from indirect taxes such as sales tax. with specific reference to sales tax, this court said:“we may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. therefore, though both excise duty and sales tax are levied with reference to goods, the two are very different imposts; in one case the imposition is on the act of manufacture or production while in the other it is on the act of sale. in neither case therefore can it be said that the excise duty or sales tax is a tax directly on the goods for in that event they will really become the same tax.”5. the decision in the sea customs act case3 was considered by another nine-judge bench in the case of new delhi municipal council v. state of punjab4 and was affirmed.6. in the circumstances, the tribunal was right in the view that it took. the appeal is dismissed. no order as to costs.slp (c) no. 13393 of 19977. for the reasons given in the judgment in collector of customs v. state of w.b. case3 the special leave petition is dismissed.

Full Judgment

S.P. Bharucha and; K. Venkataswami, JJ.

1. The Union of India is in appeal against the judgment and order of the West Bengal Taxation Tribunal, which is reported in Collector of Customs v. State of W.B.1 The Tribunal upheld the contention of the respondent-State that the Collector of Customs was a “dealer” within the meaning of the definition of that word in the Bengal Finance (Sales Tax) Act, 1941, when he sold goods confiscated under the provisions of the Customs Act, 1962 because of non-payment of customs duty thereon.

2. Only one contention is advanced before us by learned counsel on behalf of the appellants, and it is, that Article 285 of the Constitution debars the imposition of tax upon property belonging to the appellants.

3. Reliance in this behalf is placed on the judgment of two learned Judges of this Court in State of Punjab v. Union of India2. The Punjab High Court in that matter had answered the two questions before it in favour of the Union of India. The second question was whether no sales tax could be levied in view of the provisions of Article 285 of the Constitution on goods purchased by the Railways and sold by the Railways in their Catering Department. This Court said that at the time of their sale, the goods belonged to the Railways. The tax had been imposed on such sale. In view of the provisions of Article 285, such sale was immune from taxation under the State law.

4. It would appear that no real arguments were advanced before this Court by the appellant-State and the judgment of this Court in Sea Customs Act (1878), S. 20(2), Re3 was not pointed out. In the Sea Customs Act case3 a nine-Judge Bench of this Court opined by a majority, that Article 285 envisaged immunity from direct taxes and not from indirect taxes such as sales tax. With specific reference to sales tax, this Court said:

“We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. Therefore, though both excise duty and sales tax are levied with reference to goods, the two are very different imposts; in one case the imposition is on the act of manufacture or production while in the other it is on the act of sale. In neither case therefore can it be said that the excise duty or sales tax is a tax directly on the goods for in that event they will really become the same tax.”

5. The decision in the Sea Customs Act case3 was considered by another nine-Judge Bench in the case of New Delhi Municipal Council v. State of Punjab4 and was affirmed.

6. In the circumstances, the Tribunal was right in the view that it took. The appeal is dismissed. No order as to costs.

SLP (C) No. 13393 of 1997

7. For the reasons given in the judgment in Collector of Customs v. State of W.B. case3 the special leave petition is dismissed.

Same Court & Year Supreme Court of India · 1998 Same Parties Collector of Customs and anr. vs State of W.B. and anr. Same Subject Sales Tax Same Judge S.P. Bharucha and; K. Venkataswami, JJ. Acts & Sections Bengal Finance (Sales Tax) Act, 1941 - Sections 2(c), 4; Cust...

Sales Tax