2001 (8) TMI 1358 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exigibility of purchase tax on paddy purchased by a miller who sells rice to an exporter.
2. Maintainability of writ petitions in light of available statutory remedies.
3. Legality of administrative instructions issued by the State Government to quasi-judicial authorities.

Issue-wise Detailed Analysis:

1. Exigibility of Purchase Tax on Paddy:

The primary question is whether the paddy purchased by a miller, who sells the processed rice to an exporter, is subject to purchase tax. The petitioner argued that under Article 286 of the Constitution and Sections 5 and 15(ca) of the Central Sales Tax Act, 1956, the State cannot levy purchase tax on such paddy. The petitioner claimed that the sale of rice to an exporter, who has a prior order from a foreign buyer, should exempt the paddy from purchase tax.

The court examined the legislative framework, particularly the Central Sales Tax Act, 1956, and the Haryana General Sales Tax Act, 1973. It noted that Section 15(ca) of the Central Act treats paddy and rice as a single commodity only for the purpose of Section 5(3), which covers the last sale or purchase preceding the export. The court held that the sale of rice by the miller to the exporter is exempt under Section 5(3), but the purchase of paddy by the miller is not.

The court concluded that the legislative intent was to benefit direct exporters of rice, not intermediaries like millers who sell to exporters. Therefore, the purchase of paddy by the miller is exigible to purchase tax.

2. Maintainability of Writ Petitions:

The petitioners argued that constitutional issues were involved, making the writ petitions maintainable despite the availability of alternative remedies under the Haryana General Sales Tax Act. The respondents contended that the petitioners should exhaust statutory remedies before approaching the court.

The court acknowledged that while the existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition, it is generally preferable to follow statutory remedies, especially in cases involving factual determinations. The court directed that the petitioners could file appeals against the provisional assessment orders within 30 days, and such appeals would not be rejected on the grounds of limitation.

3. Legality of Administrative Instructions:

One petitioner contended that the State Government's instructions to quasi-judicial authorities to consider cases in light of the decision in Veerumal's case were illegal. The court held that bringing a jurisdictional court's decision to the notice of authorities does not control or limit their discretion. The instructions were found to be legally sound.

Conclusion:

The court dismissed the writ petitions with the following conclusions:
1. The purchase of paddy by the petitioners is not exempt from purchase tax.
2. The petitioners have effective alternative remedies under the Haryana General Sales Tax Act and should pursue those remedies.
3. The administrative instructions issued by the State Government are legally valid.

The court allowed the petitioners to file appeals against the assessment orders within 30 days, ensuring that these appeals would be considered on merits and not rejected due to limitation. The writ petitions were dismissed without any order as to costs.