STATE OF MADRAS Vs. M A NOOR MOHAMMAD AND CO
LAWS(SC)-1960-8-9
SUPREME COURT OF INDIA (FROM: MADRAS)
Decided on August 12,1960

STATE OF MADRAS Appellant
VERSUS
M.A.NOOR MOHAMMED AND COMPANY Respondents





Cited Judgements :-

STATE OF MADRAS VS. M A NOOR MOHAMED AND CO TANNERS AND DEALERS IN HIDES AND [LAWS(MAD)-1969-11-23] [REFERRED TO]
STATE OF MADRAS VS. A M SAFIULLA AND COMPANY [LAWS(SC)-1967-4-43] [REFERRED TO]
STATE OF MADRAS VS. P M BATCHA AND CO [LAWS(SC)-1967-3-9] [REFERRED TO]
STATE OF MADRAS VS. A M SAFIULLA AND COMPANY [LAWS(SC)-1967-4-43] [REFERRED TO]


JUDGEMENT

- (1.)This is an appeal by special leave against the judgment and order of the High Court of Madras allowing a petition under Art. 226 of the Constitution. The question there raised was the legality of the assessment of Sales Tax by appellant No. 2, the Deputy Commercial Sales Tax Officer, Saidapet under the Madras General Sales Tax Act (Act IX of 1939) hereinafter termed the Act.
(2.)The respondent was a partnership firm carrying on tannery business at Chromepet near the city of Madras. Before the year of assessment i.e. 1952-53, it was taking out licenses under the relevant provisions of the Act but it did not renew the licence for the assessment year. When called upon to make a return it did not do so nor did it raise any objection to the notice served on it on February 28, 1954. It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law. This contention was accepted by the High Court and the petition was allowed with costs. The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins. Against this judgment and order the appellants have come to this Court by special leave.
(3.)The contention of the respondent firm in the High Court was that under S. 5, cl. (vi) of the Act, the liability to pay sales tax in respect of hides and skins could only be at a single point; that the rule limiting the operation of this mode of taxation to licensed dealers was ultra vires and therefore R. 16 (5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, hereinafter called the Turnover and Assessment Rules, was void and inoperative and had been so held by the Supreme Court in V. M. Syed Mohammed and Co. v. State of Andhra 1954 SCR 1117 : (AIR 1954 SC 314) that accepting this interpretation the State of Madras had deleted Cl. (5) of R. 16 by G. O. 450, Revenue, dated February 26, 1954, i.e. two days before the making of the assessment order under dispute; that R. 16(5) of the Turnover and Assessment Rules was the only provision imposing a multiple tax in respect of sales of hides and skins by unlicensed dealers and that the imposition of the sales tax after the repeal of that rule was illegal and the tax was without the authority of law. It was also contended that in the taxation scheme under the Act, hides and skins, because of their importance in the international market were excluded from the direct operation of S. 3(1) of the Act which was the general charging section and were given special protection of the single point taxation under S. 5(vi). The argument therefore, was that in the case of sales of hides and skins the general provision was inapplicable and a special rule for taxation was laid down by S. 5(vi) of the Act.
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