1988 (12) TMI 330 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order under Haryana General Sales Tax Act for levy of tax on turnover relating to supply of rice under Levy Order. Interpretation of procurement price under Schedule III. Liability of dealer to pay sales tax on transactions of supply of rice to procurement agencies. Whether supply and delivery of rice under Levy Order constitutes a sale attracting sales tax. Validity of retrospective amendment to Haryana General Sales Tax Act. Liability of dealer to pay sales tax regardless of purchaser's non-payment. Conditions for reimbursement of sales tax on levy rice. Exhaustion of remedies under the Act before approaching the High Court.

Analysis:
The petitioner, a registered dealer and licensed miller, challenged an assessment order under the Haryana General Sales Tax Act for the levy of tax on the turnover related to the supply of rice under the Haryana Rice Procurement (Levy) Order. The petitioner contended that the procurement price fixed under Schedule III of the Levy Order did not include taxes, allowing for the addition of sales tax to the procurement price. The Court referred to previous judgments and held that transactions of supply of rice to procurement agencies are taxable sales, making the dealer liable to pay sales tax on the turnover.

The Court analyzed whether the supply and delivery of rice under the Levy Order constituted a sale under the Haryana General Sales Tax Act. Referring to Supreme Court decisions, the Court concluded that the transactions resembled sales and were subject to sales tax. The retrospective amendment to the Act, making the sale or purchase of goods inclusive of transfers for consideration, further solidified the liability of the dealer to pay sales tax on the transactions.

Addressing the issue of liability, the Court emphasized that the dealer's obligation to pay sales tax was not dependent on the purchaser's payment. Even if the purchaser was the Government, the dealer had to comply with the statutory liability. The Court also outlined conditions for reimbursement of sales tax on levy rice, subject to certain requirements and exclusions.

Regarding the exhaustion of remedies, the Court directed the petitioner to utilize the appeal and revision mechanisms provided under the Act before approaching the High Court. The Court highlighted that the Act itself provided effective remedies, discouraging direct petitions under Article 226 of the Constitution for matters covered under the Act.

In conclusion, the writ petition challenging the assessment order was dismissed, emphasizing the dealer's liability to pay sales tax on the turnover of rice supply under the Levy Order. The Court provided clarity on the legal obligations of the dealer, conditions for reimbursement, and the importance of exhausting statutory remedies before seeking relief from the High Court.