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Report No. 61

Remedy Suggested

4.15. Alternatives for remedying the situation.-

To remedy such a situation (if it does arise), there are, theoretically speaking, several courses open.

(a) In the first Provision in section 9(2), the Union could frame its own self place, instead of the incorporating contained code of the rules relating to assessment of tax under the Central Act. Whether or not the Union also appoints its own assessing authorities for the purpose, is immaterial for this purpose. It could delegate the necessary powers to the State authorities. The only difference would be that State authorities will then be deriving that power not from the State law read with section 9(2), but from the Central Government directly.

(b) The second alternative would be to amend the Constitution, and to provide there what is now contained in section 9(2) of the Central Sales Tax Act, 1956. For obvious reasons, this is not a very convenient method.

(c) The third alternative would be to insert, in section 9(2), a particular date, say, "as in force on the first day of April, 1974." Initially, this date could be inserted by adding the quoted words after the words "general sales tax law," wherever they occur in section 9(2) or elsewhere in the Central Sales Tax Act. Subsequently, every year, by a short amendment of the Central Sales Tax Act, the year '1974' (or the subsequent year) could be replaced by the year then current.

This would mean that the Sales Tax law in force in the State on the first April of the then current year would be attracted to the Central tax. No doubt, if, after the 1st April of one year and before the 1st April of the next year, a particular State Legislature makes any amendments, those amendments would not be attracted. Theoretically this cannot be avoided. But there is a practical way of avoiding it. The Centre can request the States, by a general letter, not to make amendments in the Sales Tax laws of the States which would be operative from a date other than the 1st April. Except to meet urgent situations, this is the practice even now, in most States.

Certain Problems connected with Powers of the States to Levy a Tax on the Sale of Goods and with the Central Sales Tax Act, 1956 Back

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