RANGANATHAN, J. (concurring) - (1.) THE Judgments of the court were delivered by
(2.) TAKING a cue from the decision of this court in Goodyear India Ltd. v. State of Haryana to which I was a party, a contention has been raised, in these appeals and writ petitions, that corresponding provisions of the Gujarat Sales Tax Act, the U.P. Sales Tax Act and the Andhra Pradesh General Sales Tax Act, are ultra vires the powers of the State Legislature insofar as they seek to levy a purchase tax in certain circumstances. My learned brother, Jeevan Reddy, J., has discussed the provisions and contentions elaborately and exhaustively in his judgment. It is unnecessary for me to set out over again the statutory provisions considered in Goodyear or those which are challenged in these petitions and appeals or the details of the decision in Goodyear as these have been discussed in great detail in the judgment of my learned brother. I however, think that I owe it to myself to add a separate judgment as I was a party to Goodyear and explain my views on the provisions presently under challenge in the light of what has already been stated by me in Goodyear. So far as the U.P. Sales Tax Act is concerned, I do not think that the impugned provision of the said Act (viz. Section 3-AAAA, as inserted in 1992 with retrospective effect from 1/04/1974 bears any comparison with the provisions that were considered in Goodyear. Section 3-AAAA is a very simple provision. According to its marginal note, its effect is the imposition of a liability to purchase tax on certain transactions. This liability is attracted in respect of goods, which are liable to tax at the point of sale to the consumer. In other words, the goods in question as such have run through their gamut of sales in the State. There will be no more sales in the State of the goods in that form, which can be taxed by the State, whether intra-State or inter-State, or in the course of export. Such goods are then made liable to tax in the hands of a purchaser dealer-cum-consumer either because he purchases them from a registered dealer by whom tax is not payable or because he purchases them from a person other than a registered dealer i.e. a person who is not accessible to the revenue, whose sales cannot be easily verified or from whom tax may not be easily recovered. To put it differently, since the tax is at the point of sale to the consumer, the legislature, in order to ensure that goods do not escape tax in the State altogether, make the purchaser liable in respect of the last sale in the State of the goods in question, if otherwise the sales 546 of the goods have not borne tax earlier in the State. This. on the face of it, is a provision which seems to be perfectly within the legislative competence of the State Legislature. The argument urged on behalf of the assessees, however, is that no person can be said to be the "consumer" of the goods in the State unless he consumes the goods himself or utilises the goods (where they are in the nature of raw material) for the manufacture or production of other goods. It is urged, therefore, that as no sale can be postulated to be a sale to the consumer unless and until one of the above events happen, the real taxable event is not the purchase of the goods but their consumption, manufacture or production in the State, or their despatch, otherwise than by way of a sale outside the State, whether in the same form or in a manufactured condition. It is therefore said that. in substance, the statutory provision is no different from the one considered by us in Goodyear and that the ratio of Goodyear will apply here equally.
(3.) SO far as the Andhra Pradesh provision is concerned, the argument is the same, with an added advantage to the assessees that the section brings out more emphatically their point of view. Under Section 6-A(i). purchase of goods from a registered dealer is subjected to tax because, though the sale or purchase of that item of goods is generally liable to tax, .no tax became payable by the registered dealer on the sale because of the circumstances set out in S. 5 or 6. This corresponds to Section 3AAAA(a) of the U.P. Act. As against this, clause (ii) of Section 6-A deals with purchase of goods liable to tax from a person other than a registered dealer and imposes a liability to pay tax where the goods purchased are consumed by the purchaser either in the manufacture of other goods for sale or otherwise and the goods are disposed of otherwise than by way of sale or despatched outside the State otherwise than in the course of interstate trade or commerce. In other words, the real taxable event for the charge under Section 6-A(ii), it is said, is not the purchase of goods but the consumption, manufacture or consignment of the same or other goods outside the State. If that be so, it is said, the imposition is ultra vires the State Legislature on the principle of the decision in Goodyear. So far as the State of Gujarat is concerned, the provisions of Section 15-B, inserted by a retrospective amendment of 1990, are somewhat different. Cutting out certain words not relevant in the present context, it provides that where a dealer, being liable to pay tax under the Act, purchases any taxable goods and uses them in the manufacture of taxabale. goods, a purchase tax will be levied on the turnover of such purchases. Rule 42-E, which was also framed w.e.f. 1/05/1990. provides that, where the assessee is a registered dealer and the goods manufactured by him have been sold in the State of Gujarat, he will be entitled to relief in respect of the purchase tax levied under Section 15-B. Here again, it is argued, the provision is tainted because it refers to 547 manufacture of the purchased goods and the rule ensures that no purchase tax is levied if the manufactured goods are sold in the State itself; in other words, the levy comes in only if they are consigned outside the State, attracting Goodyear.;