1973 (11) TMI 66 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to impugned notices and rule 48(2) of Punjab General Sales Tax Rules, 1949 as ultra vires, applicability of Central Sales Tax Act, 1956 and Punjab General Sales Tax Act, 1948, entitlement to refund under section 12 of Punjab Act and section 15 of Central Act, validity of rule 48(2) of Haryana Rules, interpretation of relevant provisions, retrospective amendment of Central Sales Tax Act, 1956.

Analysis:
The case involved a petition challenging impugned notices and the validity of rule 48(2) of the Punjab General Sales Tax Rules, 1949. The petitioner, a cotton ginning and pressing factory, dealt in cotton and cotton seeds in Haryana and was registered under both the Central Sales Tax Act, 1956, and the Punjab General Sales Tax Act, 1948. The firm sold cotton to dealers in Haryana, who further sold it in inter-State trade. The dispute arose regarding the refund of tax under section 15 of the Central Act and section 12 of the Punjab Act. The State of Haryana issued notices for assessment, leading to this petition.

The petition challenged the validity of rule 48(2) of the Haryana Rules, claiming it was ultra vires section 12 of the Punjab Act and section 15 of the Central Act. The contention was that the rule allowed a different person to claim the refund, contrary to the provisions of the Acts. The counsel relied on a precedent to support this argument, emphasizing that only the person who paid the tax should be entitled to claim a refund. However, an amendment to the Central Sales Tax Act in 1972 clarified that only the person making the inter-State sale could claim the refund, not the petitioners who did not effect such sales. Consequently, the court rejected the petitioners' contention, holding them liable to pay the sales tax as per the impugned notices.

The judgment highlighted the importance of the retrospective amendment to the Central Sales Tax Act, 1956, which clarified the entitlement to claim refunds for inter-State sales. The court emphasized that the amendment restricted refund claims to the person making the inter-State sale, thereby dismissing the petitioners' challenge to the impugned notices and upholding the validity of rule 48(2) of the Haryana Rules. The judgment concluded by dismissing the writ petition, with no order as to costs, thus resolving the issues raised in the case comprehensively.