2002 (1) TMI 1278 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the Government's Photolitho Press is considered a dealer under the Haryana General Sales Tax Act, 1973?
2. Whether the disposal of waste paper by the press constitutes transactions of sale?
3. Whether the Tribunal was justified in quashing the orders of penalty?

Analysis:

Issue 1:
The main contention was whether the Government's Photolitho Press, engaged in printing and supplying paper, files, and registers to various government departments, qualifies as a dealer under the Haryana General Sales Tax Act, 1973. The State of Haryana argued that the press is engaged in commercial activities, buying and selling paper, and should be liable to pay tax and penalty. However, the Sales Tax Tribunal disagreed with the State, stating that the press, being a part of the Government, does not engage in commercial activities for profit. The Tribunal set aside the assessment orders and penalties, leading to the reference to the High Court.

Issue 2:
The second question raised was whether the disposal of waste paper by the press through public auctions, resulting from its printing and supplying activities, constitutes transactions of sale. The State contended that the press's activities, including selling scrap, fall under the definition of "trade" as per the Act. However, the High Court noted that the press, being a government entity, does not engage in commercial activities for profit or gain. The Court highlighted that the press does not charge any money or commission for supplying articles to government departments, indicating a lack of commercial transactions or sales.

Issue 3:
The final issue revolved around the Tribunal's decision to quash the penalty orders. The State argued that the press should have been registered and liable to pay tax and penalty. However, the High Court upheld the Tribunal's decision, emphasizing that the press's activities do not meet the criteria of engaging in trade or being classified as a dealer under the Act. The Court cited precedents to differentiate cases where government entities engaged in commercial activities were considered dealers, which was not the situation in this instance.

In conclusion, the High Court ruled against the Revenue on all three questions, finding that the Government's Photolitho Press was not considered a dealer under the Haryana General Sales Tax Act, 1973. The disposal of waste paper was not deemed ancillary to its main activity, and the Tribunal's decision to quash the penalty orders was justified. Since no appearance was made on behalf of the press, no costs were awarded.

This detailed analysis of the judgment highlights the key legal arguments, interpretations of relevant provisions, and the High Court's reasoning in resolving the issues raised in the case.