Punjab-Haryana High Court
M/S Pardeep Traders vs State Of Punjab And Others on 6 January, 2012
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.
CWP No. 12804 of 1992 and connected petitions
Date of Decision: January 6, 2012
M/s Pardeep Traders
...Petitioner
Versus
State of Punjab and others
...Respondents
CORAM: HON'BLE MR. JUSTICE M.M. KUMAR
HON'BLE
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
Present: Mr. Sandeep Goyal, Advocate,
for the petitioner(s).
Mr. Piyush Kant Jain, Addl. AG, Punjab,
for the respondents.
1. To be referred to the Reporters or not?
2. Whether the judgment should be
reported in the Digest?
M.M. KUMAR, J.
1. This order shall dispose of a bunch of petitions* involving identical question of law and facts. It may be mentioned that in CWP No. 12906 of 1992 the dealer-petitioner has straightaway come to this Court challenging the notice issued by the Assistant Excise and Taxation Commissioner invoking his suo motu powers under Section 21(1) of the Punjab General Sales Tax Act, 1948 (for brevity, 'the Act'). However, in the remaining petitions, the dealer- petitioner has approached this Court after exhausting the remedy of appeal provided under the Act, challenging the orders passed by the Assessing Authority, Deputy Excise and Taxation Commissioner (Appeals) and the Presiding Officer, Sales Tax Tribunal, Punjab (for brevity, 'the Tribunal'), in respect of different assessment years**. Facts are being referred from CWP No. 12804 of 1992. CWP No. 12804 of 1992 & connected petitions 2
2. The petitioner-firm is a registered dealer under the 'Act' as well as the Central Sales Tax Act, 1956 (for brevity, 'the CST Act'), carrying on the business of oil seeds including cotton seeds and cotton seed oil of edible grade. During the course of its business the petitioner effected sale within and outside the State of Punjab. On 4.5.1989, the Assessing Authority finalised the assessment of tax in respect of the assessment year 1981-82 and sale tax was levied on the cotton seed oil at the rate of 4% instead of 1% as per notification dated 11.1.1979 issued by the State of Punjab (P-1). The petitioner challenged the order dated 4.5.1989 by filing an appeal before the Deputy Excise and Taxation Commissioner (Appeals), Patiala Division-respondent No. 2. In the appeal it was contended that the Assessing Authority has erred in holding that the cotton seed oil sold by the petitioner is not edible oil despite the fact that the petitioner had proved that the cotton seed oil sold by it falls within the range of edible oil and, thus, entitled to the concessional rate of tax @ 1% as per notification dated 11.1.1979. On 22.7.1991, the appeal was dismissed by holding that the cotton seed oil as such is not edible oil nor is known as edible oil in common parlance. The Appellate Authority has further found that the petitioner was not able to prove that the cotton seed oil sold by it was of edible range and it was refined by it or by the dealer from whom it has made the purchases. It has been specifically noticed that the petitioner is a trader only having no refinery with it. Thus, it has been concluded that the Assessing Authority was justified in levying tax @ 4% instead of 1% (P-3). The petitioner further filed an appeal under Section 9(2) of the CST Act read with Section 20(2) of the Act before the Tribunal. On 31.3.1992, the Tribunal dismissed the appeal upholding the orders CWP No. 12804 of 1992 & connected petitions 3 of the authorities below (P-4).
3. It is pertinent to mention here that on 11.1.1979, the State of Punjab issued a notification under Section 8(5) of the CST Act to the following effect:
" No. S.O./1/A.A. 74/56/S.4/E/79. Whereas the Government of Punjab is satisfied that it is necessary in the public interest (?) so to do.
Now, therefore, in exercise of the powers conferred by sub-section (5) of the Section 8 of the Central Sales Tax Act, 1956 (Central Act 1974 of 1956) and all other powers enabling him in this behalf, the Government of Punjab is pleased to direct that the tax payable by any dealer having his place of business in the State of Punjab in respect of the sales made by him, of edible oils from any such place in the course of inter-State trade or commerce to any registered dealer having his place of business in any other State or Union Territory of India, shall be calculated at the rate of one percent of his turnover in so far as the turnover of any part thereof relates to such sales, subject to the production by him of declaration in Form 'C' as prescribed under sub-section (4) of the section 8 of the Central Sales Tax Act, 1956."
(Emphasis added)
4. On 13.9.1990, the State of Punjab issued a notification amending the Pulses, Edible Oil Seeds and Edible Oils (Storage Control) Order, 1977 under the provisions of Section 3 of the Essential Commodities Act, whereby the expression 'edible oil' was defined as under:-
"2(g) 'Edible Oil' means oil used, directly or after CWP No. 12804 of 1992 & connected petitions 4 processing, for human consumption and includes hydrogenerated vegetable oil."
5. The petitioner has also referred to the instructions issued by the Directorate of Marketing and Inspection, Ministry of Food and Agriculture (Department of Agriculture), Government of India, regarding Agmark Grade Designations and definitions of quality for cotton seed oil (P-2). As per these instructions the edible oil has been described as 'refined edible oil' and 'washed edible oil' and under the heading of 'washed edible oil' the following description has been given:
"Washed (Edible) Cotton seed shall be the oil of plant cotton (Cossipium Sp.) only. It shall be clear and free from admixture with any other oil of substance and firm suspended matter or sediment, the oil shall be neutralised with alkali, washed and dried."
6. The petitioner claims that it sells washed cotton seed oil which would be edible oil and it conform to the above specifications. It is further claimed by the petitioner that the cotton seed oil sold by it, is used as edible oil directly. In order to substantiate its claim, the petitioner has also referred to a notification dated 29.5.1992, issued by the State of Punjab thereby notifying the Punjab Trade Articles (Licensing and Control) Order 1992. In the said Order, the expression 'edible oil' has been defined as under:
"In this order, unless the context otherwise requires:-
"Edible Oil" means any oil used directly or after CWP No. 12804 of 1992 & connected petitions 5 processing for human consumption and includes hydrogenerated vegetable oil."
7. In nutshell, the precise grievance of the petitioner is that the respondents have without any justification created the additional demand by levying the tax @ 4% instead of 1%. In support of various submissions made in the petition, the petitioner has placed reliance on a Single Bench judgment of this Court, dated 18.7.1991, rendered in CWP No. 6919 of 1987 {Milkhi Ram Oil and Dall Mills v. State of Punjab and others, [1992] 84 STC 206 (P&H)}
8. Having heard learned counsel for the parties we are of the considered view that the controversy raised in this bunch of petitions is no longer res integra and has been settled by the Letters Patent Bench of this Court by its judgment rendered in the case of State of Punjab and others v. Milkhi Ram Oil and Dall Mills, Mills, (1998) 118 PLR 103.
103 The Letters Patent Bench has dismissed various appeals and writ petitions including LPA No. 75 of 1992, which was relatable to CWP No. 6919 of 1987, decided on 18.7.1991.
9. In the case of Milkhi Ram Oil and Dall Mills (supra), (supra) the writ petitioner had filed quarterly returns for the years 1981-82, 1982-83 and 1983-84 within time and deposited the tax. In view of the notification dated 11.1.1979 issued by the State of Punjab reducing the tax from 4% to 1% on the interstate sales of cotton seed oil and other seed oil, the assessment in respect of the Assessment Years 1981-82, 1982-83 and 1983-84 was completed and sales tax was charged at the rate of 1% on inter-State sales. However, the petitioner in that case received notice under Section 21(1) of the Act, issued by the Assistant Excise and Taxation Commissioner stating that the assessment made need to be CWP No. 12804 of 1992 & connected petitions 6 reopened as the tax leviable, in fact, ought to have been 4% and not 1% as assessed by the Assessing Authority. The petitioner alleged that the Assistant Excise and Taxation Commissioner exercising suo motu powers passed an ex parte order holding that tax leviable on the sale of cotton seed oil is 4% instead of 1%. It was further held that since the dealer failed to pay due tax along with return, therefore, he was liable to pay interest upon the amount in terms of Section 9(2) of the CST Act. Accordingly, a demand for the amount of tax and interest for all the three aforesaid years was raised. The appeal under Section 21(3) of the Act filed by Milkhi Ram Oil and Dall Mills before the Sales Tax Tribunal was rejected. The said petitioner did not avail of the remedy provided under Section 22 of the Act and chose to approach this Court by filing the writ petition urging that the point involved is pure question of law and no useful purpose would be served by exhausting the remedy provided under the Act. The respondents resisted the petition and raised a preliminary objection regarding bar of an alternative remedy by referring to Section 22(1) of the Act. It was also contended that the point urged by the petitioner was, in fact, a pure question of fact i.e. whether cotton seed oil is edible or non-edible.
10. Having exhaustively considered the matter in the light of various judgments and provisions of the Act, their Lordships' of the Letters Patent Bench were of the opinion that the only issue involved was "Whether cotton seed oil per se is edible oil and so leviable at the rate of 1 per cent for the purpose of sales tax assessment". Answering the said question it has been concluded that it is a question of fact which could not be examined by the Court under Article 226 of the Constitution. In para 20 of the CWP No. 12804 of 1992 & connected petitions 7 judgment, their Lordships' of the Letters Patent Bench have observed as under:-
"20. ...... in the instant case, it is the case of the respondent-petitioners that they sold washed cotton seed oil. Whether the respondent-petitioners had the necessary infrastructure to make this crude oil edible, of course, will be a matter of fact which has been examined by the authorities under the Sales Tax Act. We thus find merit in the plea of the appellant and hold that this question of fact cannot be a matter of fresh adjudication in the writ petition. We find no merit in the plea advanced by the counsel for the respondent-petitioners that as the learned Single Judge did not examine the other contentions, as the petition has been accepted, this Court may remit the matter to the learned Single Judge to consider other pleas raised by the petitioners in their writ petition. We also find no ground to exempt the petitioners from paying interest on the amount which was determined by the Assistant Excise and Taxation Commissioner under suo motu powers. The Assistant Excise and Taxation Commissioner in his order dated November 24, 1996 in the case of Milkhi Ram Oil and Dall Mills examined in the light of Sales Tax Act and relied upon the decision of the Apex Court in case reported as Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota [1981] 48 STC 466 wherein it was held as under:
"...............Wherever the intention to impose liability is clear courts ought to have no hesitation in giving CWP No. 12804 of 1992 & connected petitions 8 what we may call a commonsense interpretation to the machinery sections so that the charge does not fail.
In the present case if we construe the words 'on the basis of return' occurring in Sub-section (2) of Section 7 of the Act as on the basis of a true and proper return which ought to have been filed Under Sub-section (1) of Section 7 then all the three classes of persons, viz., (i) those who have not filed any return at all and who are later on found to be liable to be assessed, (ii) those who have filed a true return but have not deposited the full amount of tax which they are liable to pay, and (iii) those who have filed a return making a wrong claim that either the whole or any part of the turnover is not taxable and who are subsequently found to have made a wrong claim, would be placed in the same position and they would all be liable to pay interest on the amount of tax which they are liable to pay but have not paid as required by Sub-section (2) of Section 7 of the Act. We are of the opinion that this view is in conformity with the legislative intention in enacting Section 11B of the Act."
This provision in the Rajasthan Sales Tax Act is in pari materia with the provisions contained in the Punjab General Sales Tax Act. On this ground, we are not inclined to interfere with the order passed by the Assistant Excise and Taxation Commissioner which has been affirmed by the Tribunal. Consequently, we accept CWP No. 12804 of 1992 & connected petitions 9 the appeals, set aside the impugned order of the learned single Judge and dismiss the writ petitions."
11. The Letters Patent Bench also dismissed the petitions in which the show cause notices issued by the Assistant Excise and Taxation Commissioner in terms of Section 21(1) of the Act were subject matter of challenge because in those cases the petitioner(s) did not exhaust the remedy available to them i.e. under Section 21(1) of the Act and revision before the Tribunal. However, the petitioner(s) were relegated to appear before the concerned authority and raise all such objections as permissible.
12. Mr. Sandeep Goyal, learned counsel for the petitioner, has not been able to cite any contrary law. Therefore, we are of the opinion that these petitions are squarely covered by the view taken by the Letters Patent Bench in the case of Milkhi Ram Oil and Dall Mills (supra).
(supra) Accordingly, the petitions are disposed of in terms of the Letters Patent Bench judgment rendered in the case of Milkhi Ram Oil and Dall Mills (supra).
(supra)
13. A photocopy of this order be placed on the files of all the connected petitions.
(M.M. KUMAR) JUDGE (AJAY KUMAR MITTAL) MITTAL) January 6, 6, 2012 JUDGE PKapoor * Sr. C.W.P. No. Title Assessment No. Year**
1. 12804 of 1992 M/s Pardeep Traders v. State 1981-82 of Punjab and others CWP No. 12804 of 1992 & connected petitions 10
2. 12805 of 1992 M/s Pardeep Traders v. State 1982-83 of Punjab and others
3. 12806 of 1992 M/s Pardeep Traders v. State 1983-84 of Punjab and others
4. 12807 of 1992 M/s Pardeep Traders v. State 1984-85 of Punjab and others
5. 12906 of 1992 M/s Vijay Traders v. Assistant 1980-81 Excise & Taxation Commissioner (INSP) Punjab, Patiala (M.M. KUMAR) JUDGE (AJAY KUMAR MITTAL) January 6, 2012 JUDGE PKapoor