KRISHNA RICE MILLS Vs. STATE OF HARYANA

JUDGEMENT

(1.) The petitioners are millers of rice and registered dealers under the Haryana General Sales Tax Act, 1973 (hereinafter referred to as the Sales Tax Act) and the Central Sales Tax Act, 1956 and are licensees under the Haryana Food rain Dealers Licencing and Price Control order, 1978. Under the Punjab Rice Procurement (Levy) Order, 1958. as then applicable to the State of Haryana, and now under the Haryana Rice Procurement (Levy) Order 1979, (hereinafter referred to as the 1979 Law Order) every licensed dealer or licensed miller is required to deliver to the Government a certain percentage of rice produced or manufactured by him at a fixed price. The petitioner had been supplying rice to the State Government through Director of Food and Supplies Haryana, Clause 3 of the 1979 Levy Order reads as under:-

(2.) The question as to whether compulsory sale of foodgrains to the Government in pursuance of levy procurement scheme constitutes transaction of sale so as to be taxable under the provisions of the Sales Tax Act came up for consideration in a case arising out of U P. Wheat Procurement (Levy) Order 1959 in Chhitter Mal Narain Das v. Commr. of Sales Tax, AIR 1970 SC 2000, wherein it was observed thus:- "In our judgment Clause 3 sets up a machinery for compulsory acquisition by the State Government of stocks of wheat belonging to the licensed dealers. The Order it is true, makes no provision in respect of the place and manner of supply of wheat and payment of the controlled price It contains a bald injunction to supply wheat of the specified quantity day after day, and enacts that in default of compliance the dealer is liable to be punished it does not envisage any consensual arrangement. It does not require the State Government to enter into even an informal contract. A sale predicates a contract of sale of goods between persons competent to contract for a price paid or a transaction in which an obligation to supply goods is imposed and which does not involve an obligation to enter into a contract, cannot be called a sale, even if the person supplying goods is declared entitled to the value of goods, which is determined or determinable in the manner prescribed. Assuming that between the licensed dealer and the Controller these may be some arrangements about the place and manner of delivery of wheat, and the payment of 'controlled price' the operation of Clause 3 does not on that account become contractual".

(3.) Thereafter, a matter arising out of the Punjab Rice Procurement (Levy) Order came up for consideration before a Bench of this Court in The Food Corporation of India v. State of Punjab. ILR (1976) 2 Punj & Har 587. On consideration of the entire case law and an the basis of the judgment in Chhitter Mal's case, the Bench observed thus:-