2000 (7) TMI 939 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Tribunal under section 41 of the State Act.
2. Legality of levy of tax on paddy purchased within the State of Haryana.
3. Interpretation of section 15(ca) of the Central Sales Tax Act, 1956.

Issue 1 - Jurisdiction of the Tribunal under section 41 of the State Act:
The petitioner invoked the jurisdiction of the High Court under Article 226 of the Constitution to challenge the Tribunal's order dated May 15, 2000, which reviewed and restored the order of assessment passed by the Assessing Authority. The petitioner argued that the Tribunal exceeded its jurisdiction under section 41 of the State Act by acting as a court of appeal. However, the Court held that the Tribunal did not exceed its jurisdiction as it had valid reasons for the review. The Tribunal's decision was based on the legal interpretation of the relevant provisions and not merely a different viewpoint.

Issue 2 - Legality of levy of tax on paddy purchased within the State of Haryana:
The Assessing Authority had levied sales tax on paddy purchased within Haryana, even though the rice made from it was indirectly exported. The petitioner contended that the tax levy was illegal under the Central Sales Tax Act, specifically section 5(3) read with section 15(ca). The Court analyzed the provisions and held that the purchase of paddy within Haryana was subject to tax, despite the subsequent indirect export of rice. The Court emphasized that the transactions did not fall under the exemption provided in the Central Act.

Issue 3 - Interpretation of section 15(ca) of the Central Sales Tax Act, 1956:
The Court delved into the interpretation of section 15(ca) of the Central Act, which deals with the treatment of paddy and rice as a single commodity for tax purposes in case of export. The Tribunal had initially set aside the tax levy based on this provision, but upon review, it was found that the petitioner's transactions did not qualify for exemption under section 5(3) and section 15(ca) of the Central Act. The Court upheld the decision of the Assessing Authority and the Appellate Authority regarding the liability to pay purchase tax on paddy purchased within Haryana.

In conclusion, the Court dismissed the writ petition, affirming the legality of the tax levy on paddy purchased within the State of Haryana and upholding the Tribunal's decision to review and restore the order of assessment.