Saree Sansar v. Govt. of NCT of Delhi & Ors. : Read Full Judgment
The case of Saree Sansar v. Govt. of NCT of Delhi & Ors. revolves around a dispute regarding the levy of sales tax on silk fabrics by the Government of Delhi. The appellant contested a judgment by the Delhi High Court that upheld an assessment order charging sales tax at a rate of 12% for the period between 15th January 2000 and 31st March 2000.
The appellant argued that under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (ADE Act), silk sarees fell under declared goods, implying that the Delhi Government lacked the authority to levy sales tax on them. They pointed out that while the item “Silk Sarees” was listed under item no.50.05 of the ADE Act, no duty was payable on this item, thereby questioning the validity of the sales tax imposition. Additionally, they invoked Article 269(2) of the Constitution, which stipulated that proceeds attributable to Union Territories should not form part of the Consolidated Funds of India, asserting that Delhi was entitled to a share of ADE proceeds.
However, the respondents countered that the deletion of silk fabric from the list of declared goods under Section 14 of the Central Sales Tax Act, 1956, effectively removed any restriction on levying sales tax at a rate exceeding 4%. They also highlighted that no additional duty was payable on silk fabric under the ADE Act, and the proviso of the Act clarified that States could still levy sales tax without affecting their entitlement to ADE proceeds.
The Supreme Court examined the relevant provisions of the CST Act and the ADE Act and concluded that during the relevant period, silk fabric was not listed under Section 14 of the CST Act, allowing for the imposition of sales tax exceeding 4%. Additionally, they found that the absence of a duty payable on silk fabric under the ADE Act did not preclude the State from imposing sales tax.
The Court affirmed the Delhi High Court’s judgment, citing a prior decision in M.R. Tobacco Pvt. Ltd. v. Union of India and Ors., which upheld the validity of a notification issued under the DST Act. They also clarified that the decision in Godfrey Phillips India Ltd. v. State of U.P. did not apply to the present case.
In conclusion, the Supreme Court dismissed the appeal, upholding the imposition of sales tax on silk fabric by the Government of Delhi for the specified period, with no orders as to costs.
DISCLAIMER: This interpretation is based on available information and legal understanding, not legal advice. Readers should consult original court documents and legal experts for precise understanding.
