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TMI Blog2004 (10) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana, who in turn export the same out of the country. During the assessment year 1982-83, the petitioner purchased raw material worth Rs. 6,58,094 which was used in the manufacture of polythene bags. It filed four quarterly returns in accordance with the provisions of section 25 of the State Act showing the gross turnover of Rs. 13,58,662.72. After claiming various reductions, it paid Rs. 1,163.96 as tax. By an order dated October 10, 1985, Assessing Authority, Faridabad, created additional tax liability of Rs. 17,921.40 against the petitioner, levied interest amounting to Rs. 9,576 and also imposed penalty of Rs.10,000 under section 47 of the State Act. The Assessing Authority held that on the strength of registration certificate issued to it, the petitioner was not entitled to purchase raw material from within the State of Haryana for use in the manufacture of goods sold in the course of export out of the territory of India within the meaning of section 5(3) of the Central Act. The appeal filed by the petitioner was dismissed by the Joint Excise and Taxation Commissioner (Appeals), Rohtak/Faridabad vide its order dated February 7, 1986 by placing reliance on the judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Deputy Advocate-General relied on the judgment of the Supreme Court in Monga Rice Mill v. State of Haryana [2004] 135 STC 549; [2004] 23 PHT 418 (SC) and argued that the Assessing Authority did not commit any illegality by imposing penalty because the petitioner failed to pay the tax due. We have thoughtfully considered the respective submissions. In Murli Manohar and Co. v. State of Haryana [1991] 80 STC 79; [1991] 1 SCC 377, the Supreme Court considered the scope of sections 6, 9(1)(a), 9(1)(b) and 24 of the State Act and 5 of the Central Act and laid down the following propositions: The language of section 9(1)(a)(ii) later section 9(1)(b) using the words 'within the meaning of sub-section (1) of section 5 of the Central Sales Tax Act, 1956' has to be given full meaning and the exemption under section 9(1) has to be restricted only to export sales falling within the scope of section 5(1). Section 5(3) covers a category of cases which would not otherwise have come within the purview of section 5(1). In the circumstances of the various provisions of the Haryana Sales Tax Act along with their amendments, it must be held that the assessee was not entitled to the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been declared unconstitutional by the Supreme Court in Goodyear case [1990] 76 STC 71; [1990] 2 SCC 71 and therefore, that decision being non-est could not be availed of by the assessee proceeds on a misconception of the issue and the ratio of that decision. What was declared unconstitutional in that case was only the levy of a tax where raw materials are purchased and used inside the State for the manufacture of finished goods which are then simply and without any sale despatched rather, consigned outside the State. There is, however, nothing unconstitutional about the two other consequences that flow on the language of the clause: one express and the other implied: one in favour of the Revenue and the other in favour of the assessee, viz, (1) that there will be a tax on the purchase of the raw materials if the manufactured goods are disposed of in the State itself otherwise than by way of sale; and (2) that there will be no tax on the purchase of the raw materials if the manufactured goods are despatched from the State consequent on a (i) local sale; (ii) inter-State sale; or (iii) a sale in the course of export. These two aspects of section 9(1)(b) survi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Supreme Court in Monga Rice Mill v. State of Haryana [2004] 135 STC 549 has no bearing on the issue under consideration. In that case, the Supreme Court interpreted sections 5(1)(3) and 15(ca) of the Central Act and section 17 read with Schedule D of the State Act. After making reference to the earlier judgment of the Supreme Court in Hotel Balaji v. State of Andhra Pradesh [1993] 88 STC 98; [1993] Supp 4 SCC 536 and the Full Bench of this court in United Riceland Limited v. State of Haryana [1992] 104 STC 362, the Supreme Court observed as under: At the outset, we state that none of the judgments cited by the learned counsel for the parties deal with the points which arise for determination in these civil appeals. As stated above, there are two ends in every transaction, namely, the sale end and the purchase end. Section 5 of the 1956 Act lays down principles for determining when a sale or purchase occasions export. It, inter alia, defines the constitutional inhibition of article 286 Here italicised (b), namely, that no law of a State shall impose tax on sale or purchase which occasions export. To constitute a purchase, exempt from State purchase tax, the purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd purchases and not to stages, which raw material undergoes, resulting in the manufacture of a different commercial commodity. The reason is not far to see. Under the 1973 Act, rice and paddy are two different commodities. They are taxable at different rates. Under section 15(c) of the 1956 Act as also under sections 15 [proviso (iii)], 15A and 27 of the 1973 Act, the tax paid on the rice stands reduced to the extent of tax paid on paddy. It is for this reason that clause (ca) in section 15 of the 1956 Act equates paddy and rice for the purposes of section 5(3), otherwise it would not be possible to harmonise that set-off provisions, stated above, with clause (ca) of section 15 of the 1956 Act. Moreover, clause (ca) applies only in cases of export of rice procured from paddy. In all other situations, paddy and rice remain two different taxable items. If clause (ca) is read in the manner suggested by the appellant, sections 15(a) and 15(c) would be rendered nugatory. Similarly, proviso (iii) to section 15, section 15A and section 27 of the 1973 Act, which provides for set-off/adjustment of tax paid on paddy against tax paid on rice, would be rendered otiose. The High Court was, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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