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2011 (1) TMI 666 - SC - VAT and Sales TaxTax liability of dealer - Purchase tax on paddy - Section 15-A in the Haryana General Sales Tax Act, 1973 - Exemption under Section 9(1)(b) - Purchase tax under Sections 6 and 15-A - that Section 9 ceased to exist in the statute book from the date of promulgation of the ordinance i.e. 15th October, 1990; particularly, when there was nothing in the Act No. 4 of 1991 rendering the provisions of the ordinance otiose during the period from 15th October, 1990 to 15th April, 1991 - Therefore, it follows that the benefit of the exemption contained in Section 9(1)(b) of the Act was available to the dealer only upto 15th October, 1990; and not till 1st April, 1991 - the appeal is partly allowed to the extent that the dealer will not be liable to pay purchase tax on the purchase of paddy made by them upto 15th October, 1990, i.e. till the date of promulgation of Ordinance No.2 of 1990.
Issues Involved:
1. Constitutional validity of Haryana General Sales Tax (Amendment) Act 9 of 1993. 2. Retrospective substitution of Section 15-A in the Haryana General Sales Tax Act, 1973. 3. Applicability of exemptions under Section 9(1)(b) of the Act. 4. Effect of Ordinance No. 2 of 1990 on the applicability of Section 9(1)(b). 5. Dismissal of the writ petition by the High Court on grounds of laches. Issue-wise Detailed Analysis: 1. Constitutional validity of Haryana General Sales Tax (Amendment) Act 9 of 1993: The appellant challenged the Constitutional validity of the Haryana General Sales Tax (Amendment) Act 9 of 1993, which substituted Section 15-A in the Haryana General Sales Tax Act, 1973, retrospectively from 27th May, 1971. The High Court dismissed the writ petition based on the Full Bench decision in United Riceland Limited and Anr. vs. State of Haryana and Ors., which had already concluded the issue against the dealer. The Supreme Court upheld this view, referencing its decision in Satnam Overseas (Export) and Ors. vs. State of Haryana and Anr., which validated the constitutionality of Act 9 of 1993. 2. Retrospective substitution of Section 15-A in the Haryana General Sales Tax Act, 1973: Section 15-A was initially inserted on 25th January, 1990, with retrospective effect from 27th May, 1971. The Supreme Court, in Satnam Overseas (Export), upheld the retrospective substitution of Section 15-A, stating that the provision did not violate Section 15(c) of the CST Act or Article 286(1)(b) of the Constitution. The Court observed that Section 15-A provided for the adjustment or refund of tax in certain cases but excluded the last purchase of paddy, cotton, and oilseeds from such benefits. 3. Applicability of exemptions under Section 9(1)(b) of the Act: Section 9(1)(b) provided exemptions for the purchase tax on goods used in the manufacture of other goods, which were then disposed of or exported outside the state. The Supreme Court in Satnam Overseas (Export) clarified that these exemptions applied to assessment years ending before 1st April, 1991. The Court concluded that the dealer would not be liable to pay purchase tax on paddy used as raw material for the period before 1st April, 1991, due to the existence of Section 9(1)(b) during that period. 4. Effect of Ordinance No. 2 of 1990 on the applicability of Section 9(1)(b): Ordinance No. 2 of 1990, which deleted Section 9 of the Act, came into effect from 15th October, 1990. The Supreme Court noted that an ordinance has the same force and effect as an Act of Parliament or State Legislature. Therefore, Section 9 ceased to exist from 15th October, 1990, and the benefit of exemption under Section 9(1)(b) was available only until that date. The Court partially allowed the appeal, stating that the dealer would not be liable for purchase tax on paddy purchased up to 15th October, 1990. 5. Dismissal of the writ petition by the High Court on grounds of laches: The High Court dismissed the writ petition primarily on the grounds of laches, noting that an efficacious statutory remedy by way of appeal was available to the dealer. The Supreme Court upheld this dismissal, agreeing that the High Court had rightly relegated the dealer to the statutory remedy under the Act, as per the decision in M/s. Titagarh Paper Mills Ltd. vs. Orissa State Electricity Board and Anr. Conclusion: The Supreme Court held that the dealer would not be liable to pay purchase tax on the purchase of paddy made up to 15th October, 1990, the date of promulgation of Ordinance No. 2 of 1990. The appeal was partly allowed, and no order as to costs was made.
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