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TMI Blog2010 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------------- The judgment of the court was delivered by DR. MUKUNDAKAM SHARMA J. Leave granted. Since all these appeals raised similar issues and all of them were taken up together for final hearing, they are being disposed of by this common judgment and order. The questions which fall for consideration in these appeals are mainly two-fold. The first issue that arises for our consideration is whether in the light of the facts and circumstances of the present case and upon a true and correct interpretation of construction of Note (i) to Schedule III under clause 2(i) of the Haryana Rice Procurement Levy Order, 1985 (hereinafter referred to as, "the Levy Order"), the appellants/dealers had collected purchase tax on paddy from the Government or its agencies along with procurement price of levy fixed under the said Levy Order and if so, what would be the effect of such collection. There is a second issue which arises for our consideration, i.e., as to whether the State is empowered to recover certain amounts as purchase tax in light of the scheme envisaged under the Haryana General Sales Tax Act, 1973 (hereinafter referred to as, "the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries. The State Government may, if satisfied that it is necessary or expedient so to do in the interest of industrial development of the State, exempt such class of industries from the payment of sales tax, for such period and subject to such conditions as may be prescribed." Rule 28A(2)(k) reads as follows: "Sub-rule (2)(k). 'exemption certificate' means a certificate granted in form S.T.-73 by the Deputy Excise and Taxation Commissioner of the District to the eligible industrial unit holding eligibility certificate which entitles the unit to avail of exemption from the payment of sales or purchase tax or both, as the case may be." It is the case of the appellants that since there was a difference between the original section 13B of the Act as inserted on September 8, 1988, and rule 28A(2)(k) of the Rules, section 13B was subsequently amended by deleting the word "sales" and consequently the new section reads as under: "Powers to exempt certain class of industries. The State Government may, if satisfied that it is necessary or expedient so to do in the interest of industrial development of the State, exempt such class of industries from the payment of tax, for suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, the same was required to be deposited with the Government exchequer. Therefore, since the amount had not been deposited by the appellants, they could be recovered by the assessing authorities. The Tribunal, however, held that since the exemption certificate was only for sales tax and the same was not amended, the liability to pay purchase tax would continue. The High Court, moreover, held that the appellants were liable to pay purchase tax as there was no exemption granted to the appellants from payment of purchase tax at any point of time. We have already referred to the aforesaid note appended to the notification dated October 17, 1996. The aforesaid note leaves no room for doubt that the assessees, while supplying rice to DFSC, collected purchase tax amongst other things by way of the procurement price. Since they had collected the purchase tax, they were required to deposit the same in the Government exchequer and there could be no justification for them to retain the purchase tax and appropriate the same to their own use. Retention of such purchase tax collected by the appellant amounts to unjust enrichment which is not permissible in view of the law laid down by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision that an amount of illegal tax paid by the persons could be claimed only by them and not by the dealer and such restriction on the right of the dealer to obtain refund could lawfully be imposed in the interests of general public. The law laid down in Orient Paper Mills Ltd.[1961] 12 STC 357 (SC). AIR 1961 SC 1438 was quoted with approval by this court in Mafatlal Industries Ltd.[1998] 111 STC 467 (SC). reported in [1997] 5 SCC 536, and the relevant portion of the said judgment has been quoted hereinabove. A reference may also be made to a decision of the Constitution Bench in Godfrey Phillips India Ltd. v State of U.P.[2005] 139 STC 537 (SC). reported at [2005] 2 SCC 515. In that case, the Constitutional validity of the Uttar Pradesh Tax on Luxuries Act, 1995 as also other State Acts was challenged, inter alia, on the ground of legislative competence of the State Legislatures. The court allowed the petition and held that the State Legislatures were not competent to impose luxury tax on tobacco and tobacco products and the Acts were declared ultra vires and unconstitutional. In the intervening period, however, tax was collected by the appellants from consumers and also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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