Amendment status not verified — confirm the current text below against the official source.
The Bill provides for exemption from licence fee and sales tax of these commodities also. (Published in the Gazette (Extraordinary) Part IV-2A dated 4-3-1958 as No. 53) III Amending Act 31 of 1958.— This Bill is intended to implement the decisions of the Conference of Finance Ministers held at Delhi in November 1957, regarding uniform taxation of certain luxury goods and to remove certain difficulties which have been felt in implementing the Mysore Sales Tax Act, 1957. The main provisions of the Bill are :- (1) Turmeric power and dals, flour and husk of pluses will be taxed at one per cent in the same way as turmeric and pluses. (2) The rate of tax on bullion and specie and certain luxury articles is enhanced. (3) Voluntary payment of sales tax by Commission Agents is provided for. (4) Cocoanut and copra are brought within the definition of oil-seeds. (5) Books meant for reading, canteen stores, fresh fruits, hosiery cloth in lengths and all cloth (including pure silk) made on handlooms, are exempted from sales tax. 1957: KAR. ACT 25] Sales Tax 235 (6) Provision is made for validating the rules already made and for the reduction of registration fee in particular classes of cases and for presiding fees for the grants of copies documents. (7) The point of levy of purchase tax is changed from the last purchase point to first purchase point, in the case of declared goods. (Published in the Gazette (Extraordinary) Part IV-2A dated 5-5-1958 as No 99.) IV Amending Act 32 of 1958.— Not Available V Amending Act 11 of 1961.—In order to have a uniform law in the State in respect of the levy of cess on sugarcane the Mysore Sugarcane Cess Act was passed in the year 1958. Under this Act, the cess is levied on the entry of sugarcane into the factory the area comprised in which is treated as a local area. The cess is in the nature of octroi falling under entry 52 of the State List, that is, taxes on the entry of goods into a local area for consumption, use or sale therein. The Allahabad and the Mysore High Courts had held that this levy was valid. But the Supreme Court has held that the local area referred to in entry 52 of the State List means the area within the jurisdiction of a local authority, and that therefore a State Act imposing a tax on entry of sugarcane into a factory, is unconstitutional. They have accordingly held the U.P. Sugarcane Cess Act, 1956, and the Madras Sugar Factories Control Act, 1949, as amended by the Madras Sugar Factories Control (Mysore Amendment and Validation of Levy of Cess) Act, 1959, as invalid. Since under entry 97 of the Union List, Parliament can impose any tax not enumerated in any of the Lists, the levy and collection of cess under the U.P. Acts have been validated by Parliament by the enactment of the U.P. Sugarcane Cess Validation Act, 1961. The Government of India have been requested to undertake similar legislation for the validation of the levy and collection of sugarcane cess under the State Acts. As regards the future levy, it is proposed to levy a tax at the rate of fifteen per cent on the turnover of the last dealer in the State in respect of the purchase of sugarcane, by amending the Third Schedule to the Mysore Sales Tax Act, 1957. Hence this Bill. (Published in Karnataka Gazette (Extraordinary) Part IV-2A dated 14-4-1961 as No. 59 at page 2 & 3.) VI Amending Act 12 of 1961.—Under the Mysore Sales Tax Act, 1957, pure silk fabrics are taxable at the first stage of sale at 9 per cent in Sales Tax [1957: KAR. ACT 25 236 respect of cloth other than cloth woven by powerlooms and handlooms and 4 per cent on cloth woven on powerlooms. The Government of India have decided that the sales-tax on pure silk fabrics may be replaced by additional duties of excise, the proceeds thereof being distributable to the States according to the formulae of distribution of net proceeds on the same lines as applicable to duties on other varieties of textiles. They have accordingly levied excise duty on pure silk fabrics with effect from the first March 1961. It is therefore necessary for the State Government to exempt pure silk fabrics on which excise duty is levied from sales-tax from first March 1961. The excise duty is not payable on the stocks with the dealers, and on this stock it is considered necessary to levy sales-tax. Since there is no provision in the Act empowering the State Government to grant exemption by notification and for assessing the floating stocks, sections 5, 8 and 18 of the Act are proposed to be amended. At present sub-section (8) of section 5 of the Mysore Sales Tax Act, 1957, provides for making provisional assessment. In the light of the observations of the High Court in a batch of writ petitions challenging provisional assessments, the Advocate-General suggested the omission of sub-section (8) and inserting a separate section relating to provisional assessments. Provision has accordingly been made in clauses 2 (2) and 4 of the Bill. Section 43 of the Act provides for payment of tax on the turnover or turnovers during the assessment year ending on the date of commencement of the Act. As the Act came into force on 1st October 1957, assessments have been made on the basis of the turnover of dealers up to that date. In respect of the turnover of dealers from 1st October 1957 up to the commencement of the next assessment year also, it is necessary to make specific provision for assessment. Provision has therefore been made in clause 6 of the Bill. The assessments made on the basis of rule 6 of the Mysore Sales Tax Rules, as amended in May 1959, have been questioned, and it is considered necessary to declare that the amendment is valid. Provision for this purpose is made in clause 7. It is also considered necessary to validate the assessments already made. Necessary provision for this purpose has been made in clause 8. (Published in Karnataka Gazette (Extraordinary) Part IV 2-A dated 14th April 1961 as No. 60, at page. 6.) VII Amending Act 28 of 1961.— It is generally felt that there is much scope for evasion of Sales tax and that effective action is required to be taken to prevent evasion. The question of setting up of Intelligence and Enforcement Section in the Commercial tax Department and establishing check posts at key points to detect and prevent evasion has been under consideration. One of the 1957: KAR. ACT 25] Sales Tax 237 effective methods of minimizing evasion is to keep track of goods coming into and going out of the State. For this purpose, check posts are required to be set up as has been done in the neighbouring States of Madras, Kerala and Andhra Pradesh. The Offices of the department would require legal sanction for stopping the vehicles and checking the goods and the relevant documents in order to satisfy themselves that sales tax leviable on those transactions is not evaded. There is no provision in the existing law for such a check. It is therefore, proposed to amend the Act to enable Government to establish check posts wherever necessary and to authorise the officers of the Department to stop the vehicle and check the goods and relevant documents carried by them. Hence the Bill. (Published in the Mysore Gazette (Extraordinary) Part IV-2A dated 10-11- 1961 as No 142 at page 4.) VIII Amending Act 29 of 1961.—It is considered necessary to designate "Inspecting Officers" as "Assistant Commissioners of Commercial Taxes" and empower them to hear appeals against the orders of Assistant Commercial Tax Officers. Provision has accordingly been made in clauses 2, 3, 6, 7 and 8 of the Bill. Under the Central Sales Tax Act, 1956, certain goods like cotton and oil seeds have been declared to be of special importance in inter-State trade or commerce. According to section 15 of the said Act, the tax payable by any dealer under the State Sales Tax Act, in respect of any sales or purchases in respect of declared goods, shall not exceed two per cent and such tax shall not be levied at more than one stage in the State. Under the Mysore Sales Tax Act, cotton and groundnut including groundnut seed are subject to a purchase tax and the purchase tax has to be paid by the last dealer in the State liable to tax under the Act. Since tax cannot be levied in respect of declared goods at more than one stage in the State, it is necessary to provide for refund of tax paid by a dealer in a year in respect of purchase of such goods, if such goods are subsequently sold to any other dealer in the State, who is liable to pay the tax. Provision has accordingly been made in item (i) of clause 4. By item (ii) of clause 4, the first proviso to section 5(4) of the Act is proposed to be amended to prescribe by rules the manner and conditions subject to which the tax paid under section 5(4) shall be refunded. The High Court of Mysore has recently held sub-section (3) of section 18 of the Mysore Sales Tax Act to be unconstitutional and invalid as it does not provide for refund of tax to a customer, who though not required by law to pay the tax, has paid the tax. It is therefore considered necessary to provide for refund of tax in such cases and also to specify the period within which the customer should claim refund. Provision has accordingly been made in clause 5 of the Bill. In another case the High Court has held that beer manufactured in India does not fall under entry 38 of the Second Sales Tax [1957: KAR. ACT 25 238 Schedule to the Act and that the tax collected at 25 per cent on the sale of such beer is not valid. Since the intention was that beer whether manufactured in India or abroad should be subjected to tax at 25 per cent, entry 38 and Explanation II of the Second Schedule are proposed to be amended. The levy and collection of tax at 25 per cent on such beer and the tax forfeited under section 18(3) are also proposed to be validated. Provision for this purpose has been made in clause 10 of the Bill.— (Published in Karnataka Gazette (Extraordinary) Part IV-2A dated 20th November 1961 as No. 151, at page. 5.) IX Amending Act 26 of 1962.—In the light of certain decisions of the Mysore High Court, it has become necessary to amend sections 7, 12A and 40 of the Mysore Sales Tax Act, 1957. It is also necessary to validate rule 6 of the Mysore Sales Tax Rules with retrospective effect. Hence this Bill. (Published in Karnataka Gazette (Extraordinary) Part IV-2A dated 27th April 1962 as No. 82, at page. 8.) X Amending Act 30 of 1962.— The State Government are committed to raise a sum of Rs. 42 crores for the Third Five-Year Plan by additional taxation. In order to meet the commitments of the schemes in the Second Five-Year Plan and implementation of schemes in the Third Five-Year Plan, the resource of the State have to be augmented. The Mysore Resources and Economy Committees have made certain recommendations for this purposes, With reference to levy of sales tax, they have inter alia made the following recommendations:- (i) the removal of exemption of cereals from payments of sales tax and subjecting them to tax one per cent to multi point; (ii) chillies, now taxed at single point of first purchased, may be taxed to multi point; (iii) the present rate of tax on timber at three per cent at first point of sale, be raised to four per cent; (iv) raw silk may be taxed at point of last purchase at one half per cent; (v) tamarind seeds may be taxed at the point of last purchase; (vi) certain commodities, such as, aerated water, heavy chemical, granite slabs, mosaic tile and chips, cement and asbestos sheets and chicory now taxed at two per cent at multi point under section 5(1) may be brought under single point levy at three per cent at the point of first sale in the State; (vii) all kinds of yarn, except cotton yarn covered by the Fourth Schedule may be taxed at two per cent, the rate of three-fourths per cent being made applicable only to pure silk yarn; 1957: KAR. ACT 25] Sales Tax 239 (viii) exemption of firewood and charcoal for domestic use may be removed; (ix) exemption of dried vegetables may be removes; (x) existing rates of tax in the case of certain commodities may be slightly enhanced to the level of those prevailing in the neighbouring States; (xi) the rate of tax on pluses and on gold and silver articles may be raised from one to two per cent; (xii) concessions allowed under the second and third provisions to section 5(4) of the Sales tax Act amy be withdrawn; and (xiii) the rate of ales tax on hotel turnover under section 5(1) be raised from two to three per cent. With certain variations, it is proposed to implement the recommendations of the Committee. Hence this Bill. In the case of timber, instead of levy of tax at the first point of sale at four per cent as recommended by the Committee, it is proposed to levy multi point tax at two per cent. In respect of raw silk it is proposed to levy tax at one per cent at the point of last purchase instead of one half per cent as recommended by the Committee. In respect of mosaic tiles and chips and chicory, it is proposed to levy tax at the point of first sale at the rate of four per cent and five per cent, respectively, instead of three percent recommended by the Committees. In respect of yarn, a uniform rate of two per cent has been proposed in respect of both mill yarn and thrown silk, instead of three- fourths per cent as at present. The recommendation of the Committee to enhance the rate of tax leviable in respect of certain commodities is proposed to be implemented bye levy of slightly higher rate in respect of some of those commodities. The rate of tax on pluses has not been enhanced to two per cent as recommended by the Committee, as this commodity has to be treated in the same manner as cereals. Similarly the rate of tax on hotel turnover has not been enhanced to three per cent as recommended by the Committee, since it will increase the tax burden on persons who have to take food and other eatables in hotels. (Published in the Mysore Gazette (Extraordinary) Part IV-2A dated 27-8- 1962 as No. 166 at page 5-6.) XI Amending Act 9 of 1964.— The Select Committee which considered the Mysore Sales Tax (Second Amendment) Bill, 1962 had recommended inter alia that, Government might consider separate legislation for enhancing the rates of tax on certain goods. It was decided early this year that the States should revise the rates of tax on certain luxury goods uniformly from seven per cent to ten per cent. In the Budget Speech the enhancement of rates on luxury goods was also mentioned. There have been several representations for replacement of the existing levy of licence fee on food grains by tax in view of the inconveniences involved in the present levy. It is therefore proposed to levy tax on the sale of food grains in Sales Tax [1957: KAR. ACT 25 240 section 5 (1) of the Act. This is also considered necessary for increasing the State's resources.