Case Law Details
State of Tripura Vs Chandan DEB (Supreme Court of India)
Supreme Court held that rule 3A(2) of the Tripura Sales Tax Rules, 1976 (TST Rules) are not ultra vires to Tripura Sales Tax Act, 1976 (TST Act). Accordingly, 4% tax deductible on transfer of right to use goods.
Facts- Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 29.08.2007 passed by the Gauhati High Court by which the Division Bench of the High Court has dismissed the writ appeals preferred by the State of Tripura which were against the judgment and order passed by the learned Single Judge declaring Rule 3A(2) of the Tripura Sales Tax Rules, 1976 ( ‘TST Rules’) as ultra vires to the Tripura Sales Tax Act, 1976 (the ‘TST Act’) and partly allowing the appeals preferred by the original writ petitioners quashing and setting aside that part of the judgment and order passed by the learned Single Judge by which it was held that the original writ petitioners were liable under Section 3AA of the TST Act, the State of Tripura has preferred the present appeals.
Conclusion- Held that the rules are framed in exercise of Rule-making power under Section 44 of the Act and in that view of the matter and as the liability to pay the tax on transfer of right to use the goods shall still be continued under proviso to Section 3(1), mere providing for mode of recovery and/or providing for machinery/mechanism to recover the tax to be paid by the transferer/supplier from the person buying the goods deducting the tax at source and depositing the same with the Revenue cannot be said to be ultra vires to TST Act and the Rules as observed and held by the High Court. At the cost of repetition, it is observed and held that Rule 3A(2) does not in any manner change the chargeability of the tax or liability to pay the tax. Therefore, the High Court has fallen in error in misinterpreting Rule 3A(2) of the TST Rules and has fallen in error in declaring Rule 3A(2) of the TST Rules ultra vires to TST Act and the High Court has materially erred in quashing and setting aside the memorandum issued by the State Government requiring the hirers namely the ONGC and the GAIL to deduct an amount equivalent to 4% out of the respective bills of the suppliers of the vehicles.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
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