- (1.) The short question which arises for determination in these four appeals on certificate against the judgment of the Madhya Pradesh High Court is whether the provisions of Section 8(2)(b) of the Central Sales Tax Act, 1956 (Act 54 of 1956) (hereinafter referred to as the Act) suffer from the vice of excessive delegation. The High Court answered this question in the negative and upheld the constitutional validity of those provisions.
(2.) Sub-sections (1), (2) and (4) of Section 8 of the Act read as under: "(1) Every dealer, who in the course of inter-State trade or commerce- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3); shall be liable to pay tax under this Act, which shall be three per cent. of his turnover. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce or not falling with sub-section (1)- (a) in the case of declared goods, shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State, and (b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale purchase of such goods inside the appropriate State, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce, unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority, or (b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government."
(3.) It has been argued on behalf of the appellants that the fixation of rate of tax is a legislative function and as the Parliament has, under Section 8(2)(b) of the Act, not fixed the rate of central sales tax but has adopted the rate applicable to the sale or purchase of goods inside the appropriate State in case such rate exceeds 10 per cent. the Parliament has abdicated its legislative function. The above provision is consequently stated to be constitutionally invalid because of excessive delegation of legislative power. This contention, in our opinion, is not well founded. Section 8(2)(b) of the Act has plainly been enacted with a view of prevent evasion of the payment of the central sales tax. The Act prescribed a low rate of tax of 3 per cent in the case of inter-State sales only if the goods are sold to the Government or to a registered dealer other than the Government. In the case of such a registered dealer, it is essential that the goods should be of the description mentioned in sub-section (3) of Section 8 of the Act. In order, however, to avail of the benefit of such a low rate of tax under S. 8(1) of the Act, it is also essential that the dealer selling the goods should furnish to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold, containing the prescribed particulars in prescribed form obtained from the prescribed authority, or if the goods are sold to the Government not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government. In cases not falling under sub-section (1), the tax payable by any dealer in respect of inter-State sale of declared goods is the rate applicable to the sale or purchase of such goods inside the appropriate State vide Section 8(2)(a) of the Act. As regards goods other than the declared goods, Section 8(2) (b) provides that the tax payable by any dealer on the sale of such goods in the course of inter-State trade or commerce shall be calculated at the rate of 10 per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State whichever is higher.;