1978 (8) TMI 218 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Constitutionality of the retrospective effect given to the definition of "dealer" in section 2(c) of the Haryana General Sales Tax Act, 1973.
2. Competence of the legislature to amend the definition of "dealer" retrospectively.

Detailed Analysis:

Constitutionality of the Retrospective Effect:
The primary issue addressed was whether the retrospective effect given to the definition of "dealer" in section 2(c) of the Haryana General Sales Tax Act, 1973, effective from September 7, 1955, is unconstitutional. The court noted that the sole question was legal, and the facts were not in serious dispute. The petitioners, engaged in manufacturing and registered under the Punjab General Sales Tax Act, challenged the sales tax assessment made against them.

The court observed that the Haryana General Sales Tax Act, 1973, repealed the Punjab General Sales Tax Act as applicable to Haryana, and the definition of "dealer" was amended to include those who export goods out of the state. The retrospective effect meant that goods previously not taxable became taxable. The petitioners conceded that the legislature could amend the definition prospectively but questioned the retrospective amendment.

Competence of the Legislature to Amend Retrospectively:
The court addressed the petitioners' argument that retrospective amendments in taxing statutes should only remove ambiguities or fill lacunae, citing Supreme Court precedents. However, the court found that the Haryana Legislature's amendment aimed to clarify ambiguities and meet judicial interpretations that had excluded certain goods from taxation. The court cited the legislative history, including amendments and judicial decisions, to support this view.

The court also discussed the broader issue of legislative competence to impose taxes retrospectively. It referred to Supreme Court rulings, particularly Hira Lal Rattan Lal v. Sales Tax Officer and District Controller of Stores, Northern Railway v. Assistant Commercial Taxation Officer, which upheld the legislature's power to levy taxes retrospectively. The court concluded that the Haryana Legislature was competent to amend the definition of "dealer" retrospectively.

Conclusion:
The court dismissed the writ petitions, upholding the constitutionality of the retrospective amendment. The court also noted that some petitioners sought to quash assessment orders, but they must pursue statutory remedies available through appeal, revision, and reference.

Summary:
The court upheld the retrospective amendment to the definition of "dealer" in the Haryana General Sales Tax Act, 1973, as constitutional. It concluded that the legislature was competent to impose taxes retrospectively, rejecting the petitioners' arguments based on Supreme Court precedents. The court dismissed the petitions, directing the petitioners to pursue statutory remedies for challenging assessment orders.