Plea against tax filed in court

The Calcutta High Court will on March 30 hear a petition questioning the legality of the value-added tax (VAT), proposed to be introduced nationally from April 1, 2005.

Former state finance minister Asoke Mitra, the petitioner, has argued that the VAT cannot be implemented without amending the Constitution and has challenged the authority of the state government to introduce the tax in place of sales tax. The petition prays for an order from the court declaring the VAT ultra vires.

The state government has no right to impose the VAT in place of sales tax as the former is not a tax on sales, the petition argues and contends that neither the state nor the central government has the authority to withdraw sales tax. The petition describes the VAT roll-out as a bypassing of the Constitution and abuse of process.

Asim Dasgupta, West Bengal's finance minister, in his Budget earlier this week proposed the state's conversion to the VAT from April 1. Dasgupta also heads the national empowered committee on the VAT.

Most retail businesses have opposed the move as they feel the VAT will push up prices.