R.A. Sharma, J. - (1.) PETITIONER No. 1 is an authorised petrol dealer of Indian Oil Corporation and Petitioner No. 2 is a registered association formed' by all the petrol dealers of the State of U.P. They have challenged the orders dated 13 -6 -1990, 27 -6 -1990 and 2 -7 -1990, issued by the Government of U.P. District Excise Officer, Ghaziabad and Excise Inspector, Ghaziabad respectively. By these orders, petitioners have been required to get themselves registered under Sections of the U.P. Sales of (Motor Spirit, Diesel Oil and Alcohol) Taxation Act, 1939 (here -in -after referred to as the Act.) The respondents have filed counter -affidavit and the petitioners have filed rejoinder affidavit in reply thereto. We have heard the learned counsel for the petitioners and the learned Standing Counsel and the writ petition is decided in accordance with the Rules of the Court.
(2.) THE Act is a taxing statute providing for tax on sale of motor spirit and diesel oil in the State of U.P. Section 3 is the charging section. Section 3, as it stood before its amendment by U.P. Act No. 8 of 1978 is reproduced below. Levy of tax. - -"(1) There shall be levied from every retail dealer and collected in such manner as may be prescribed, a tax on the retail sales of motor spirit and diesel oil at such rate, or rates, as may be notified, not exceeding nine naye paise in the case of motor spirit, and seven naye paise in the case of diesel oil per litre on such sales." (2) If any tax payable under Sub -section (1) is not paid within the time prescribed, the prescribed authority may, in lieu thereof, recover any sum not exceeding double the amount of the tax so unpaid, or any smaller sum above the amount of the tax, which such authority may think it reasonable to recover. Under this section tax was levied from the retail dealers on the retail sale of motor spirit and diesel oil. 'Retail sale' was defined by Section 2(d) of the Act as follows: 2. (d) "retail sale" means a sale by a retail dealer of (motor spirit or diesel oil or both) to a person for the purpose of consumption by the person by whom or on whose behalf it is or may be purchased and includes the consumption by a retail dealer himself or on his behalf of (motor spirit or diesel oil or both) sold to him for retail sale. By U.P. Act No. 8 of 1978, Section 3 of the Act was amended. Section 3, as it stands after its amendment, is reproduced below. 3. Levy of tax. - -(1)(a) There shall be levied on the first sale of Motor Spirit in the State, a tax at the rate of (ten percent) ad valorem and such tax shall be payable to the State Government in the prescribed manner by the dealer effecting such sale, (b) there shall be levied on the first sale of Diesel Oil in the State a tax at the rate of eight percent, and from the date notified by the State Government for the purpose, at the rate of twelve percent ad valorem, and such tax shall be payable to the State Government in the prescribed manner by the dealer effecting such sale; (c) there shall be levied at the point of first purchase of alcohol in the State a tax at the rate of 40 paise per litre for the first million liters and at the rate of 20 paise per litre for the remainder payable by the purchaser: and such tax shall be collected and paid in the prescribed manner to the State Government. (2) If any tax payable under Sub -section (1) is not paid within the time prescribed the prescribed authority may, in lieu thereof, recover any sum not exceeding double the amount of the tax so unpaid, or any smaller sum above the amount of the tax, which such authority may think it reasonable to recover. 3. The effect of the amendment is that the tax is now levied on first sale of the motor spirit and diesel oil, and is payable by the dealer affecting such sale. Purchase and sale of motor spirit and diesel oil other than the first sale is not taxable under the Act.
(3.) AFTER creating liability to pay tax, the Legislature has further made provisions in the Act to ensure proper realisation of the tax and to prevent its evasion. In this connection reference may be made to Section 5 wherein provision has been made for registration of the dealer, and Section 6 which prohibits carrying on business by any person as a dealer without registration certificate. Sections 5 and 6, being relevant, are quoted, below.;