1978 (8) TMI 205 - HC - VAT and Sales Tax

Summary

Issues:
1. Constitutional validity of Schedule D of the Punjab General Sales Tax Act, 1948, as applied to the State of Haryana.
2. Challenge to the amendment made by Haryana Act No. 10 of 1970 regarding the stage of levy for tax on cotton.
3. Allegation of discrimination between imported cotton and cotton produced in Haryana in terms of tax levy.

Detailed Analysis:

1. The judgment addressed the constitutional validity of Schedule D of the Punjab General Sales Tax Act, 1948, as extended to Haryana. The challenge was based on the amendment made by Haryana Act No. 10 of 1970. The court referred to the constitutional provisions under article 286 of the Constitution and section 14 of the Central Sales Tax Act, 1956, which declare certain goods as of special importance in inter-State trade. The court emphasized that the challenge was specifically directed towards Schedule D as applicable in Haryana post the mentioned amendment. The court clarified the legal framework and the constitutional mandate regarding the taxation of declared goods under the State statute.

2. The judgment delved into the specific challenge regarding the amendment made by Haryana Act No. 10 of 1970 to Schedule D, which altered the stage of levy for tax on cotton. Prior to the amendment, the stage of levy for cotton was the first purchase, but post-amendment, it was changed to the last purchase within the State of Haryana. The petitioner alleged discrimination between imported cotton and locally produced cotton due to this change. However, the court noted that the rate of tax on both types of cotton remained the same, regardless of the stage of levy. The court cited precedents and legal principles to establish that similar tax rates do not necessarily indicate discrimination, especially when the Supreme Court had previously ruled on similar matters.

3. The judgment addressed the argument of discrimination between imported cotton and locally produced cotton in terms of tax levy. The court referred to previous judgments to distinguish cases where discrimination was found based on specific factors. The court highlighted that in the present case, the rate of tax was uniform for both types of cotton, and there was no substantial evidence to prove discrimination. The court dismissed the writ petitions challenging the constitutional validity of Schedule D and the amendment made by Haryana Act No. 10 of 1970, emphasizing that the rate of tax being the same for both types of cotton negated the discrimination claim.

In conclusion, the judgment upheld the constitutional validity of Schedule D of the Punjab General Sales Tax Act, 1948, as applied to Haryana and dismissed the writ petitions challenging the amendment made by Haryana Act No. 10 of 1970 regarding the stage of levy for tax on cotton. The court rejected the allegations of discrimination between imported cotton and cotton produced in Haryana, citing legal precedents and the uniform tax rate as key factors in the decision.