Skip to content


Ganesh Dall and Rice Mills Vs. the State of Haryana and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petition No. 1727 of 1975
Judge
Reported in[1979]43STC399(P& H)
AppellantGanesh Dall and Rice Mills
RespondentThe State of Haryana and anr.
Appellant Advocate R.P. Sawhney, Adv.
Respondent Advocate S.C. Mohunta, Adv.-General
DispositionPetition dismissed
Cases ReferredFirm A. T. B. Mehtab Majid & Co. v. State of Madras
Excerpt:
.....pressed or otherwise (but excluding cotton waste) as one of the items of declared goods. ), but the same is clearly distinguishable on facts, for, in that case, tax on hides or skins, which had been tanned outside the state of madras, was levied on the dealer, who, in the said state, was the first dealer in such hides or skins. , tanned hides and skins locally produced and tanned hides and skins that were imported'.9. in the result, the writ petitions fail and the same are hereby dismissed, but there will be no order as to costs......doubt. clause (3) of article 286 of the constitution lays down that with regard to any tax on the sale or purchase of goods declared by parliament to be of special importance in inter-state trade or commerce, any law imposed by a state would be subject to such restrictions and conditions as parliament may, by law, specify. in conformity with the constitutional mandate, section 14 of the central sales tax act, 1956, declares a number of goods as being of special importance in inter-state trade or commerce. these goods for convenience and by long usage have now come to be known as declared goods under the state statute. clause (ii) of section 14 clearly specifies cotton of all kinds, both indigenous and imported, in its unmanufactured state, whether ginned or unginned, baled, pressed or.....
Judgment:

S.C. Mital, J.

1. This judgment will dispose of Civil Writ Petitions Nos. 1727, 558, 1690, 3771, 26, 3472 and 4156 of 1975.

2. The constitutional validity of Schedule D of the Punjab General Sales Tax Act, 1948, as made applicable to the State of Haryana, vide Haryana Amendment and Validation Act (President's Act No. 14 of 1967), was challenged in Rattan Dass Mohan Lal v. State of Haryana [1979] 43 S.T.C. 154 (Civil Writ No. 612 of 1974). On 1st August, 1978, S. S. Sandhawalia, C. J., and S. S. Dewan, J., overruled the challenge and dismissed the writ petition. As to the proposition of law involved, Sandhawalia, C. J., speaking for the Bench, made the following observations :.Some aspects of the legal position, however, are not at all in doubt. Clause (3) of Article 286 of the Constitution lays down that with regard to any tax on the sale or purchase of goods declared by Parliament to be of special importance in inter-State trade or commerce, any law imposed by a State would be subject to such restrictions and conditions as Parliament may, by law, specify. In conformity with the constitutional mandate, Section 14 of the Central Sales Tax Act, 1956, declares a number of goods as being of special importance in inter-State trade or commerce. These goods for convenience and by long usage have now come to be known as declared goods under the State statute. Clause (ii) of Section 14 clearly specifies cotton of all kinds, both indigenous and imported, in its unmanufactured state, whether ginned or unginned, baled, pressed or otherwise (but excluding cotton waste) as one of the items of declared goods. So far, there is hardly any controversy but, as already noticed, the challenge is to Schedule D, as existing and applicable in the State of Haryana, on or after 14th November, 1967....

3. With regard to the theory of double taxation, the learned Judges, relying on Shri Laxmi Cotton Traders (P.) Ltd. v. State of Haryana A.I.R. 1969 P. & H. 12 at 23 (affirmed by the Supreme Court in Rattan Lal & Co.'s case A.I.R. 1970 S.C. 1742), observed that, in particular cases, where a double taxation has been made by the Assessing Authority, the court would strike down that action, but this fact would obviously have no bearing on the validity of the statute itself.

4. For appreciating the new grounds on which the constitutional validity of Schedule D of the aforesaid Act has been challenged, it is pertinent to set down Schedule D, as it stood before its amendment by Haryana Act No. 10 of 1970:

Schedule D

----------------------------------------------------------------------------Name of declared goods Circumstances under Stage of levywhich tax to belevied----------------------------------------------------------------------------Cotton, that is to say, all (i) If imported by a (i) First sale within kinds of cotton (indige- dealer from outside the State of Har-nous or imported) in the State of Haryana yana by a dealer its manufactured state, or otherwise received liable to pay tax whether ginned or un- by him in the under this Act.ginned, baled, pressed State of Haryana (ii) First purchase or otherwise but not for sale. within the State of including cotton waste. (ii) If purchased in Haryana by a dealer the State of Haryana. liable to pay taxunder this Act.----------------------------------------------------------------------------

5. Act 10 of 1970 aforesaid amended Clause (ii) in the column 'stage of levy' as under:

Last purchase within the State of Haryana by a dealer liable to pay tax under this Act.

6. It is evident that, prior to the amendment, under Clause (ii), the stage of levy was the first purchase, but by the amendment it was changed to the last purchase. The learned counsel for the petitioner vehemently urged that whereas as to imported cotton, the stage of levy was the first sale, but with respect to cotton produced in Haryana, the stage of levy is now the last purchase. Thus, a case of discrimination between the two types of cotton was sought to be made out by further contending that a preferential treatment was being given to the cotton produced in the State of Haryana. All the same, the learned counsel for the petitioner was unable to substantiate the argument by referring to any cogent fact. It is pertinent to point out that, admittedly, the rate of tax on both types of cotton is the same and at one point, i.e., either first sale or last purchase. In the matter of Laxmi Cotton Traders (P.) Ltd. A.I.R. 1969 P. & H. 12 at 23, a Bench of this Court observed that when the rate of tax is the same, there seems to be no discrimination. At page 351 of the Reports, it was held :

Article 304 does not require that similar or same tax should be imposed on the imported and the local goods. In other words, if purchase tax had been levied on the local goods, it is not necessary. that only purchase tax could be imposed on the imported cotton.

7. Above all, the matter stands concluded by the Supreme Court decision in Rattan Lal and Co. v. Assessing Authority [1970] 25 S.T.C. 136 at 146 (S.C.), where at page 146, on the point of alleged discrimination between imported goods and local goods, their Lordships authoritatively held:

It is said that the discrimination is also between the first purchase in the case of imported goods and last sale in the case of local goods. Since the imported goods might be more expensive by reason of freight, etc., or intermediary sales having taken place, it is said that the burden of tax will be heavier and therefore this will offend against the equality clause and Article 304 of the Constitution. In our opinion, this argument is without any substance. The rate of tax is the same in every case.

8. All the same, the learned counsel for the petitioner placed reliance on Firm A. T. B. Mehtab Majid & Co. v. State of Madras [1963] 14 S.T.C. 355 (S.C.), but the same is clearly distinguishable on facts, for, in that case, tax on hides or skins, which had been tanned outside the State of Madras, was levied on the dealer, who, in the said State, was the first dealer in such hides or skins. As regards the hides or skins tanned within the State, they were exempt from taxation in tanned state. Their Lordships of the Supreme Court struck down the impugned rule because the same goods had been discriminated, i.e., 'tanned hides and skins locally produced and tanned hides and skins that were imported'.

9. In the result, the writ petitions fail and the same are hereby dismissed, but there will be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //