STATE OF HIMACHAL PRADESH Vs. PETERS INDIA LIMITED

JUDGEMENT

(1.) Special leave granted.

(2.) The Forest Department, in the State, sold timber to the respondents. For the sale amount in that regard, Annx. P-14, demand for payment of sales tax, was raised against the respondents-assessees. They contended, that the turnover relating to timber sold by the Forest Department is to be deducted from the "taxable turnover" of the dealer, namely the State government and so no tax is payable by the respondents-assessees. The respondents moved the High court and assailed the notice of demand raised against them and also the recovery proceedings in writ proceedings under Article 226 of the Constitution of India. The High court took the view that the sales effected by the Forest Department to the respondents-assessees is exempt under Section 6 (3 of the Himachal Pradesh General Sales Tax Act and held that the demand made against the assessees-respondents is impermissible or unsustainable. The three orders so passed are dated 28-11- 1990. The State has come up in appeals against the aforesaid orders/judgments after obtaining special leave from this court.

(3.) We heard counsel.