1995 (7) TMI 373 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether sugarcane purchased directly from growers is subject to purchase tax under the Punjab Act.
2. Imposition of tax on packing material sold with tax-free goods.
3. Imposition of penalty in certain circumstances.

Analysis:
The judgment addressed multiple Civil Writ Petitions challenging the levy of purchase tax on sugarcane directly purchased from growers under the Punjab General Sales Tax Act. The petitioners, sugar mills engaged in sugar production, argued against the tax imposition. The Court examined various notices and orders issued under the Act, highlighting the common controversy of whether such purchases are taxable under section 4-B of the Act. Some cases also involved challenges to tax on packing material like gunny bags sold with sugar, and the imposition of penalties.

In a significant development, the Supreme Court ruled against the petitioners in a related case, establishing that purchasers of sugarcane are indeed liable to pay purchase tax under section 4(1) of the Punjab Act. The Court cited past judgments affirming this interpretation, including the Full Bench decision in Desh Raj Parshotam Lal's case. Consequently, the main contention of the petitioners was dismissed by the Supreme Court, allowing tax collection and encashment of bank guarantees as per law.

Regarding the specific writ petitions, the Court dismissed those challenging notices under the Act, advising authorities to proceed lawfully while affording petitioners a chance to contest assessments. Cases against assessment or appellate orders were also dismissed, granting petitioners the right to appeal within sixty days without limitation objections from the State. The Court revived an appeal previously dismissed for non-compliance, subject to a deposit condition. Additionally, orders by the Sales Tax Tribunal were set aside for fresh consideration in accordance with the law.

The Court emphasized expeditious resolution by authorities under the Punjab Act, directing compliance with the Supreme Court's judgment. Interim orders were vacated, allowing tax collection by State authorities. The judgment concluded with no costs awarded and provided parties with the liberty to seek further clarification if needed. Overall, the writ petitions were disposed of with the outlined observations and directions, ensuring adherence to legal procedures and the Supreme Court's ruling.