Essay regarding Tax Case



Case Evaluation: R. S. Joshi, STO, Gujarat & Ors. Vs . Ajit Generators Ltd & Anr.

Quotation: AIR1977SC2279

Prof-in-charge: Prof Ashutosh Naik


Swathi. A. P


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Symbiosis Regulation School

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Name of the case:

3rd there�s r. S. Joshi, STO, Gujarat & Ors. Vs . Ajit Mills Limited & Anr.


AIR FLOW 1977 SOUTH CAROLINA 2279: (1977) 4 SCC 98: 1977 SCC (Tax) 536

Decided On:

31. 08. 1977


7 Evaluate Bench consisting of the following Justice of the Best Court of India: Main Justice Meters. Hameedullah Plead with., Justice And. L. Untwalia, Justice L. N. Bhagwati, Justice G. S. Kailasam, Justice S. Murtaza Fazal Ali, Rights V. R. Krishna Iyer and Rights Y. Sixth is v. Chandrachud.

Quick facts of the watch case:

The case managed the constitutionality of a certain design of florida sales tax legislation, worked out to counter-top consumer victimization by traders. The provisions Sections 37(1) (a) and 46(2) of the Bombay Sales Tax Act, late 1950s was the impugned section that have been challenged in the Hon'ble Substantial Court of Gujarat. The key question that was raised before the High The courtroom was whether Sections 37(1) (a) and 46(2) in the Bombay Florida sales tax Act, 1959 are beyond the legislative power conferred by Access 54, List II in Schedule VII of the Metabolism. The High Court held that the impugned sections are beyond the potency of the State legislature and therefore ultra vires. Aggrieved by the decision, the State has preferred these appeals. Problems raised:

The trinity of points in controversy that have been raised in such a case were: a) Whether the Legislature has the necessary competence

b) Set up Legislature has got the ancillary or incidental capacity to make provision intended for the levy and collection of such tax. c) If such procedures are in contravention to Articles 19 and d) Whether such provisions Breach equality as guaranteed below Article 16. Rules and Judgment:

Legislation we are interested in is the Bombay Sales Tax Take action, 1959 (Bombay Act LI of 1959) (for short, the Work. ) applicable during the relevant period towards the Gujarat Condition, although the Condition of Maharashtra itself offers since revised the law. • Section 46:

(1) No person shall collect any sum by way of tax in regards to sale of any kind of goods which by virtue of Section 5 not any tax is payable. (2) No individual, who is not only a Registered seller and liable to pay taxes in respect of any kind of sale or perhaps purchase, shall collect on the sale of any goods virtually any sum by using tax by any other person and no Authorized dealer shall collect anywhere by way of tax in excess of the amount of tax payable by him under the provisions of this Work. • Section 63(1)(h)

Whoever contravenes any of the provisions of Section 46, shall on confidence, be penalized with simple imprisonment which can extend to six months or with great not exceeding beyond two 1000 rupees, or perhaps with both; so when the offence is a continuing one, using a daily great not exceeding beyond one hundred rupees during the period of continuation of the offence. Section 37(1) relates to imposition of penalty departmentally to get contravention of Section 46. It states: • Section 37(1)(a)

If any person, not being a dealer liable to pay duty under this kind of Act, gathers any sum by way of duty in excess of the tax payable by hm, or otherwise collects tax in contravention with the provisions of Section 46, he shall be liable to pay out, in addition to the tax for which he may be liable, a problem as follows: i) where there is a contravention referred to in Offer (a), a problem of an quantity not going above two thousands of rupees;.... and, in addition ,.... any kind of sum accumulated by the person by way of tax in contravention of Section 46 will be forfeited for the State Government. The question was whether forfeiture terms in Parts 37(1) (a) and 46(2) of the Action, were beyond legislative power conferred by simply Entry 54, List 2, Schedule VII of Metabolism....