Punjab-Haryana High Court
M/S Ipjahhaa Traders vs State Of Haryana & Anr on 15 September, 2014
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal, Fateh Deep Singh
VATAP No. 60 of 2013 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
VATAP No. 60 of 2013
Date of Decision: 15.9.2014
M/s Ipjahhaa Traders, Faridabad
....Appellant.
Versus
The State of Haryana and another
...Respondents.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Sandeep Goyal, Advocate for the appellant,
(in VATAP Nos. 39, 60, 61, 73 & 79 of 2013).
Mr. Avneesh Jhingan, Advocate for the appellant,
(in VATAP No. 107 of 2013).
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
1. This order shall dispose of a bunch of six appeals bearing VATAP Nos. 39, 60, 61, 73, 79 and 107 of 2013 as according to learned counsel for the parties, the identical issues on facts and law arise in all the appeals. It was also agreed that factual matrix in all the appeals is similar and may be disposed of by one common order. For brevity, the facts are being extracted from VATAP No. 60 of 2013.
2. VATAP No. 60 of 2013 has been preferred by the assessee under Section 36 of the Haryana Value Added Tax Act, 2003 (in short "the Act") against the order dated 11.11.2011 (Annexure A-6) passed by the Haryana Tax Tribunal, Chandigarh (hereinafter referred to as "the GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -2- Tribunal") in STA No. 42 of 2007-08 for the assessment year 2001-02. The appeal was admitted on March 18, 2014 for determination of the following substantial questions of law:-
(i) Whether on the facts and circumstances of the case, the Ld. Tribunal was justified in upholding the order of Revisional Authority even though the order passed by the Revisional Authority was barred by limitation in terms of amended law under the Haryana VAT Act, 1973?
(ii) Whether on the facts and circumstances of the case, the Ld. Tribunal was justified in upholding the order of Ld. Revisional Authority wherein he has raised the demand on account of undue enrichment despite the fact that the appellant did not charge any tax from its customers in the invoices?
(iii) Whether on the facts and circumstances of the case, the Ld. Tribunal was justified in upholding the order of Ld. Revisional Authority even though he had no jurisdiction after the repeal of the Haryana General Sales Tax Act, 1973?
3. Put shortly, the facts necessary for adjudication of the instant appeal as narrated therein are that the appellant was engaged in the business of wholesale and retail purchases and sale of the Indian Made Foreign Liquor (IMFL) and was holding L-1 and L-2 licence. As per Entry 24A of Schedule 'B' appended to the Haryana General Sales Tax Act, 1973, now repealed, the sale of IMFL by L-1 and L-2 licencees GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -3- was tax-free. Since the appellant was not liable to pay tax in terms of the said Entry, it could not get registration. Thereafter, Entry 24A was omitted from Schedule 'B' w.e.f. 26.6.2001 and a new Entry was inserted in Schedule 'C' providing that IMFL would be taxable at the stage of sale made for the first time in the State of Haryana by an excise licencee. In terms thereof, the appellant got itself registered with the assessing authority, Faridabad. However, there was a dispute with regard to the levy of tax on the existing stock on 25.6.2001 as the first sale had already taken place within the State of Haryana and as such the L-1 and L-2 licencees were not liable to pay tax on the same in terms of Entry in Schedule 'C'. The said dispute came up for consideration of this Court in CWP No. 19748 of 2001 wherein this Court vide order dated 7.3.2002 held that no tax was leviable on the sale of stock of liquor available with the dealer as closing stock on 25.6.2001. Since the appellant had already paid the tax amounting to ` 76,38,177/- on the pending stock, it claimed refund of tax. The assessment proceedings for the year 2001- 02 were initiated by the assessing authority. The assessing authority vide assessment order dated 9.12.2002 (Annexure A-1) held the appellant entitled to refund of ` 76,36,377/-. Since the refund amount exceeded ` 10 lacs, the case was sent to the Excise and Taxation Commissioner for approval. After his approval, the amount was refunded to the appellant. However, after the expiry of more than four years, the Deputy Excise and Taxation Commissioner, Faridabad (East) issued a notice to the appellant to show cause as to why the assessment order be not revised and the refund made to the appellant be not recovered. The said show cause notice was duly replied by the appellant. The revisional authority vide order dated 1.5.2007 GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -4- (Annexure A-2) revised the order by raising demand of ` 84,77,746/-. Feeling aggrieved, the appellant filed an appeal (Annexure A-3) before the Tribunal. A Division Bench of the Tribunal passed a split decision on 12.7.2010 (Annexure A-4), whereupon, the matter was referred to larger Bench. The larger Bench of the Tribunal, vide order dated 11.11.2011 (Annexure A-6) adjudicated the issue against the assessee. Review petition filed against it, was also dismissed by the Tribunal on 17.10.2012 (Annexure A-8).. Hence, the present appeals.
4. Learned counsel for the appellant submitted that the stock of liquor (IMFL) which was available with the appellant on 25.6.2001 was in Schedule 'B' being tax free item. However, w.e.f. 25.6.2001, it was included in Schedule 'C' whereupon tax was payable at the stage of sale made for the first time in the State of Haryana by an excise licencee. Again on 15.10.2001, it was made tax free. It was urged that the dispute only relates to the period from 26.6.2001 upto 14.10.2001 and since the dealer had sold the liquor without charging any tax on the stock held as on 25.6.2001, there was no question of unjust enrichment and the assessee was entitled for the refund as claimed by it. Learned counsel for the appellant had relied upon opinion of Shri Yudhavir Singh, Member of the Tribunal, wherein, it was expressed that the dealer had not collected any tax from the customers. The applicability of judgment in CWP No. 13652 of 2005 (M/s Jatinder Singh & Co. Vs. State of Haryana and others), decided on 1.4.2010 was also disputed.
5. On the other hand, learned State counsel supported the order passed by the Tribunal and urged that it could not be said that the appellant had sold the liquor without charging the tax on the stock of IMFL on 25.6.2001 and, thus, the Tribunal was right in deciding the issue GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -5- against the appellant.
6. The issue which arises for consideration in these appeals is whether there was unjust enrichment on the part of the appellant whereby it could be said that the appellant had collected the tax on sale of closing stock of liquor which was available on 25.6.2001 but was sold subsequently till 14.10.2001.
7. We find force in submissions of learned counsel for the appellant. The IMFL was tax free before 26.6.2001 and if the dealer had realized the same price for the sale of IMFL immediately before and after 26.6.2001, then it could not be said that he had charged any tax from the customers but if he had realized higher sale price on or after 26.6.2001, then the higher realization could be attributed to the tax charged from the customers. The Assessing Authority in the assessment order dated 09.12.2002 had observed as under:-
"In response to this notice Sh. K.K. Gupta, Advocate appeared and submitted that he has not charged any tax during the period in which the IMFL has became taxable. As per policy of the dealer, the dealer has charged flat rates from the very beginning and not charged any tax from the purchaser. He produced copies of bills and sales statement which shows that equal price has been charged even in taxable as well as tax free periods. He also submitted that he has not charged any tax from the customers and also cited judgment of Hon'ble Supreme Court reported as 71 STC 226 SC, wherein it has been held that a dealer charged from GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -6- purchaser from money by itself would not attract the charge of excess collection. Collection of excess amount is not impermissible but what was not permissible was realization of excess amount as tax. He also produced various documents which shows that the dealer has not charged any amount by way of tax and only charged sale price. Since the dealer has not collected any tax the judgment of Hon'ble Supreme Court reported as 111 STC 467 SC is not applicable."
8. Further, some sale invoices dated 21.6.2001, 13.7.2001, 11.8.2001 and 12.9.2001 in respect of IMFL sold to Gymkhana Club L- 12C, Faridabad, were examined by the Tribunal as has been noticed in the opinion of Sh. Yudhvir Singh, Member of the Tribunal. On 21.6.2001, only Peter Scot Whisky and Sandipiper Beer had been sold whose comparison of sale price and comparable brands when sold on subsequent dates was as under:-
Brand Date Gross Price Rebate
IMFL per case
Peter Scot Whisky 21.6.2001 4800 20%
11.8.2001 4800 20%
12.9.2001 4800 20%
Sandpiper Beer 21.6.2001 600 20%
KF Beer 13.7.2001 600 20%
Sandpiper Beer 12.9.2001 600 20%
KF Beer 12.9.2001 600 20%
9. A perusal of the above shows that the dealer had not GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -7- charged anything extra on sale of IMFL after the levy of tax thereon. Thus, on appreciation of evidence, it could not be concluded that the dealer had charged any tax from the customers. The finding recorded by the majority Members of the Tribunal is based on conjectures and surmises without there being any material on record to arrive at the conclusion that the assessee-appellant had charged tax on sale of IMFL in respect of stock as on 25.6.2001, which was sold during the period 26.6.2001 to 14.10.2001. Moreover, no cogent reasons have been given therein to record a finding different from the one noticed herein before.
10. Still, further, a Division Bench of this Court in State of Punjab and another v. Kalsi Pipes Pvt. Ltd. (2010) 29 VST 492 (P&H) had recorded as under:-
"We repeatedly asked the learned State counsel as to how the finding of fact would be vitiated when the rate of Rs.48.50 has been charged even in respect of the period for which refund amount has been claimed. We also asked the learned counsel to substantiate how it would amount to undue enrichment when the dealer- respondent has not collected tax from the third party. There has not been any satisfactory explanation. The Assessing Officer as well as the appellate authority are presumed to have gone through the books of account and the entry of Rs.48.50 must have been duly reflected. There is no whisper in the grounds of appeal alleging anything to the contrary which lead to the conclusion that the findings recorded by the GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -8- Tribunal are pure findings of fact which would not give rise to a substantive question of law. Therefore, the appeal does not warrant admission."
11. The Tribunal had relied upon decision of this Court in M/s Jatinder Singh & Co.'s case (supra) to adjudicate the issue against the appellant. It would be relevant to reproduce the findings of fact recorded therein on the basis of which the writ petition was dismissed. It reads thus:-
"7. Respondent No.2 i.e. the Excise and Taxation Commissioner, Haryana in its impugned order dated 13.6.2005 has recorded finding of fact that the petitioners have sold IMFL to its customers at an enhanced rate. It was further observed in the impugned order that tax paid stock was sold by L-1 licencee through its retail counters of L-2 licence alongwith the opening stock of IMFL available in the morning of 26.6.2001 at a higher rate. It is further observed in the impugned order that though tax was not leviable on the stock found on 26.6.2001, however since IMFL, which was stocked on 26.6.2001, was sold by the petitioners at a higher rate, including tax thereon, hence the petitioners are not entitled to any refund."
It was further held as under:-
"9. We do not agree with the submission made by the learned counsel for the petitioners. Even if refund was directed to be made in favour of two GURBACHAN SINGH 2014.11.11 10:33 I attest to the accuracy and authenticity of this document High Court Chandigarh VATAP No. 60 of 2013 -9- other licensees, the petitioners is not entitled to the refund because in the petitioner's case, it has been found that the petitioner has charged tax on the stock, which was available with him on 26.6.2001. The petitioner having been found collected tax, cannot take refund thereof simply because imposition of tax was found to be illegal."
12. The factual matrix being different from present appeals, the reliance on the said pronouncement was misplaced. In view of the above, we are unable to subscribe to the opinion of the majority. The finding recorded by the Tribunal is thus, legally unsustainable.
13. In the light of the discussion made above, substantial question (ii) is decided in favour of the assessee-appellant. Consequently, issues (i) and (iii) are rendered academic. The appeals stand disposed of accordingly.
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh
VATAP No. 60 of 2013 -10-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP No. 39 of 2013 Date of Decision: 15.9.2014 M/s Ashok Kumar & Co., Yamuna Nagar ....Appellant.
Versus The State of Haryana and another ...Respondents.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Sandeep Goyal, Advocate for the appellant.
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
For orders, see VATAP No. 60 of 2013 (M/s Ipjahhaa Traders, Faridabad v. The State of Haryana and another).
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh
VATAP No. 60 of 2013 -11-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP No. 61 of 2013 Date of Decision: 15.9.2014 M/s Ipjahhaa Traders, Faridabad ....Appellant.
Versus The State of Haryana and another ...Respondents.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Sandeep Goyal, Advocate for the appellant.
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
For orders, see VATAP No. 60 of 2013 (M/s Ipjahhaa Traders, Faridabad v. The State of Haryana and another).
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh
VATAP No. 60 of 2013 -12-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP No. 73 of 2013 Date of Decision: 15.9.2014 M/s Ashish Kumar & Co., Sonepat ....Appellant.
Versus The State of Haryana and another ...Respondents.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Sandeep Goyal, Advocate for the appellant.
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
For orders, see VATAP No. 60 of 2013 (M/s Ipjahhaa Traders, Faridabad v. The State of Haryana and another).
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh
VATAP No. 60 of 2013 -13-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP No. 79 of 2013 Date of Decision: 15.9.2014 M/s Ashish Kumar & Co., Sonepat ....Appellant.
Versus The State of Haryana and another ...Respondents.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Sandeep Goyal, Advocate for the appellant.
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
For orders, see VATAP No. 60 of 2013 (M/s Ipjahhaa Traders, Faridabad v. The State of Haryana and another).
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh
VATAP No. 60 of 2013 -14-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP No. 107 of 2013 Date of Decision: 15.9.2014 M/s Suraj Singh Karan Singh, Narnaul ....Appellant.
Versus The State of Haryana ...Respondent.
CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.
HON'BLE MR. JUSTICE FATEH DEEP SINGH.
PRESENT: Mr. Avneesh Jhingan, Advocate for the appellant.
Ms. Tanisha Peshawaria, DAG, Haryana.
AJAY KUMAR MITTAL, J.
For orders, see VATAP No. 60 of 2013 (M/s Ipjahhaa Traders, Faridabad v. The State of Haryana and another).
(AJAY KUMAR MITTAL)
JUDGE
September 15, 2014 (FATEH DEEP SINGH)
gbs JUDGE
GURBACHAN SINGH
2014.11.11 10:33
I attest to the accuracy and
authenticity of this document
High Court Chandigarh