2012 (1) TMI 139 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment involves the quashing of an order passed by the Haryana Sales Tax Tribunal regarding the assessment and imposition of taxes on a petitioner-company engaged in the manufacturing and sale of air-conditioning systems and components.

Assessment Order:
The petitioner-company was assessed for the year 1989-90, and the assessing authority imposed purchase tax on goods purchased within the State without payment of tax and used in transfers to other States on a proportionate basis under section 6 of the Haryana General Sales Tax Act, 1973. The revisional authority examined the legality and validity of the assessment order, finding discrepancies related to the levy of tax on purchases, rebate of tax, interest under sections 25(5) of the Act, and penalty. An additional demand was created based on these findings, which the petitioner appealed before the Tribunal. The order upheld the levy of tax on lease rent and disallowance of rebate but quashed the levy of interest under section 25(5) of the Act.

Legal Challenge and Decision:
The petitioner challenged the validity of certain sections of the Act related to taxation of lease money as part of turnover. Referring to a previous judgment, it was established that certain transactions taking place outside the State of Haryana should not be included in turnover. The court, following the precedent, disposed of the present writ petition in the same terms as the previous case, quashing the inclusion of transactions outside the State in the turnover.

This judgment highlights the legal challenge regarding the taxation of lease money and the subsequent decision based on the interpretation of relevant sections of the Haryana General Sales Tax Act, 1973.