1974 (11) TMI 81 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the applicant could be held as a dealer under the Punjab General Sales Tax Act for purchasing cotton to send out of the State of Haryana.
2. Whether the Tribunal was justified in holding the applicant liable to pay purchase tax on the cotton sent out of the State of Haryana.

Analysis:
1. The High Court addressed the first issue by considering the definition of "dealer" under the Haryana General Sales Tax Act, 1973. The court noted that even if the cotton was purchased for sending out of the State, the applicant could still be considered a dealer based on the amended definition. The court highlighted that the definition in force at the time of purchase would be applicable, and in this case, the applicant qualified as a dealer under the Act.

2. Regarding the second issue, the court examined the provisions of the Punjab General Sales Tax Act related to purchase tax. The court pointed out that the tax was leviable at the first purchase within the State by a dealer liable to pay tax under the Act. The court emphasized that the applicant was not the first purchaser of the cotton, as it was bought from commission agents. Therefore, the Tribunal was deemed unjustified in upholding the purchase tax on the applicant for the cotton sent out of the State. The court referred to an amendment in Schedule D, which substituted "first" with "last," but clarified that this amendment was not relevant to the purchases made by the applicant.

Conclusion:
The High Court answered the reference by ruling in favor of the applicant on both issues. The court determined that the applicant qualified as a dealer under the Act and was not liable to pay purchase tax on the cotton sent out of the State. The judgment was delivered by Justices Gujral and Mittal, with Justice Mittal concurring with the decision.