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HC upholds Govt fiat on advance tax
Our Bureau
Kochi
March 8
The Kerala High Court upheld the two Government circulars issued under the provisions of the Kerala Value Added Tax Act directing that the tax be collected at the check-posts in advance on consignments of certain "evasion-prone" goods.
Mr Justice K. Balakrishnan Nair upheld the circulars while dismissing a batch of writ petitions filed by various dealers. The circulars were issued by the Commissioner of Commercial Taxes on December 12, 2006. The evasion-prone articles included marbles, ceramic floor tiles and petroleum products except LPG.
DEALERS' PLEA
Dealers in these articles contended that the circulars were illegal, as they did not have the support of any statutory provisions. The imposition of a levy or collection of tax in advance before the sale as effected was unconstitutional.
The provisions in the Act did not authorise collection of tax in advance. The State Government contended that it was to prevent evasion of tax by dealers that taxes were collected in advance.
The Judge observed that the Commissioner had been rightly authorised to specify "the evasion-prone goods".
The classification of such goods had been made on a rational basis. Unless tax was demanded, there was likelihood of tax evasion. The classification was made on a good basis to achieve the object of safeguarding the interest of the State by preventing the evasion of tax.
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