IMPORTANT POINT
Interest cannot be imposed on a nil tax demand, and the principle of preventing double taxation must be upheld in sales tax assessments.

JUDGMENT :

ARUN DEV CHOUDHURY, J.

1. Heard Dr. A. K Saraf, learned senior counsel assisted by Mr. P Baruah, learned counsel for the petitioners. Also heard Mr. B Gogoi learned standing counsel, Taxation Department.

2. These writ petitions were heard together as common questions of facts and law are involved in these cases inasmuch as determination made by the Deputy Commissioner of Taxes (Appeals), dismissing the appeals preferred by the petitioners against the orders of assessment are under challenge in the present batch of writ petitions. The details of the assessment and order corresponding to each writ petition are given in the following tabular form:

3. The common facts which are necessary for proper adjudication of the present writ petitions are recorded herein below:

I. The petitioner Indian Oil Corporation, hereinafter referred as ‘the Company’, incorporated under the Companies Act, 1956 was registered as dealer under the Assam General Sales Tax Act, 1993 (hereinafter referred to as, Act 1993). The Company has been purchasing various petroleum products from BRPL on payment of Sales Tax as per provisions of the Act, 1993.

II. The Union of India at the relevant point of time, constituted Oil Prices Committee and said committee recommended that the dealers are to sale its products at the prices fixed by the Central Government and prices so fixed by the Central Government included surcharge to be collected from buyers and to be deposited to the “Oil Pool account”. Such recommendation was adopted by the Union of India on 16.12.1977.

III. The Superintendent of Taxes took a view that since the sale price of the petitioner company is more than 40% of the purchase price, the second sale was to be treated as first sale and therefore, the Company was liable to pay tax on the second sale considering it to be first sale in the State of Assam. Such view was based on the explanation to section 8(1)(a) of the Act, 1993 read with Rule 12 of the Assam General Sales Tax Rule, 1993 (for short Rules 1993).

IV. The petitioner company raised an objection to such proposition on the ground that the amount of surcharge collected on behalf of the Central Government is also included in the sale price and therefore, such sale price for the purpose of the Act, 1993 should be determined after deducting the amount of surcharge collected by the petitioner company on behalf of the Central Government, which had to be contributed to the “Oil Pool Account”.

V. Such contention was not accepted by the Superintendent of Taxes and a show cause notice was issued for initiation of penal action on the ground that the petitioner company is liable to pay tax on the sale of products, purchased from the BRPL being selling agent, as per section 8(1)(a) of the Act 1993 read with rule 12 of the rules 1993. A writ petition was filed before this court challenging such notices.

VI. The writ petition was dismissed by a coordinate bench holding that the amount of surcharge collected by the petitioner company, even though passed onto the Oil Pool Account, had to be included in the sale price, as defined under section 2(34) of the Act, 1993.

VII. Being aggrieved, the petitioner company preferred a Writ Appeal and such Writ Appeal was also dismissed by a Division Bench holding that the surcharge collected by the petitioner company on behalf of Central Government and contributed to the Oil Pool Account was not a statutory collection but collected under the executive instruction and therefore, cannot be excluded while calculating sale price. It was further held that such sale was to be treated as first sale within the meaning of section 8(1)(a) of the Act read with Rule 12 of the Rules 1993, since