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"The tax under this Act shall be levied on any transaction of sale or purchase deemed to take place inside the State under this Act or any other law for the time being in force. The provisions of this Act relating to taxation on sales or purchases inside the State only at a single point or only at one or more stages apply only to the sales inside the State."

3. On the basis of this provision, the petitioner contended before the Commercial Tax Officer, Haveri, that transactions were not exigible to tax. But it was negatived. Aggrieved by that decision, he came up directly to this Court in Writ Petition No. 916 of 1961, challenging the validity of the levy. By that time, this court had already pronounced on the scope of the aforementioned section 7 in C. Mallarappa & Sons v. The State of Mysore ([1962] 13 S.T.C. 400.). Therein this Court held that the department was not competent to levy sales tax in respect of purchase transaction. The Legislature amended section 7 of the Act by Act 32 of 1958. By that amendment in the place of the words "apply only to sales" the words "apply to sales or purchases" were submitted. The scope of that amendment again came up for consideration. This Court held that the amendment in question was prospective in character. Thereafter the State Legislature enacted Act 26 of 1962, the provisions of which among other things gave retrospective operation to the 1958 amendment referred to earlier. Section 6(1) of that Act (the amending Act 26 of 1962) provides :-

4. In view of this amendment, the Commercial Tax Officer, Haveri, did not give effect to the direction given by this Court in Writ Petition No. 916 of 1961 wherein this Court required him to make the necessary corrections in the assessment order on the basis of our decision in C. Mallarappa's case ([1962] 13 S.T.C. 400.). It is complained that the Commercial Tax Officer erred in doing so. It was further contended that the provisions of section 6 of Act 26 of 1962 in so far as it purports to validate an assessment struck down by this Court is violative of Article 245 of the Constitution and hence void.