1962 (5) TMI 21 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Levy of purchase tax on old gold ornaments under the East Punjab General Sales Tax Act, 1948.
2. Definition and interpretation of "purchase" and "manufacture" under section 2(ff) of the Act.
3. Competency of writ petition when an alternative remedy is available.

Issue-wise Detailed Analysis:

1. Levy of Purchase Tax on Old Gold Ornaments:
The petitioner, a Hindu undivided family firm engaged in the sarafa business, challenged the imposition of purchase tax on old gold ornaments purchased for conversion into bullion under the East Punjab General Sales Tax Act, 1948. The firm argued that converting old gold ornaments into bullion does not constitute a manufacturing process and therefore should not be subject to purchase tax.

2. Definition and Interpretation of "Purchase" and "Manufacture" under Section 2(ff):
The term "purchase" is defined in section 2(ff) of the Act as the acquisition of goods for use in the manufacture of goods for sale. The petitioner contended that the conversion of old gold ornaments into bullion does not involve manufacturing, as it merely involves removing impurities from the gold. However, the court noted that the definition of "purchase" is broadly worded and does not necessarily exclude the process of converting old ornaments into bullion. The court emphasized that both old ornaments and bullion are goods of different categories and saleable, and converting one into the other might involve a manufacturing process. Therefore, the court concluded that the conversion of old ornaments into bullion could fall within the definition of "purchase" under section 2(ff).

3. Competency of Writ Petition When an Alternative Remedy is Available:
A preliminary objection was raised by the respondents, arguing that the petitioner should have exhausted the alternative remedies available under the Act before approaching the High Court. The court acknowledged that while the existence of an alternative remedy does not bar the jurisdiction of the High Court, it is a rule of discretion. The court referred to several Supreme Court decisions, including A.V. Venkateswaran v. Ramchand Sobhraj Wadhwani and Another, which stated that the existence of an alternative remedy is a factor to be considered in granting writs but does not per se bar the issuance of a writ. Given the importance of the legal question and the fact that the petitioner was out of time for approaching higher departmental authorities, the court decided to consider the case on its merits.

Conclusion:
The court dismissed the petition, holding that the conversion of old gold ornaments into bullion could involve a manufacturing process and thus fall within the definition of "purchase" under section 2(ff) of the East Punjab General Sales Tax Act, 1948. The court also exercised its discretion to entertain the writ petition despite the availability of an alternative remedy, considering the importance of the legal question and the circumstances of the case.