SHIV RAM Vs. EXCISE AND TAXATION COMMISSIONER

JUDGEMENT

(1.) THE petitioners carry on business as Halwais. They prepare laddus, jalebis, reoris, golian, makhana, phulian etc. , articles which are preparations of sugar. They sell those articles but they also sell sugar. In regard to the assessment year 1957-58 they were called upon by notice under Section 11 (2) of the Punjab General Sales Tax Act (Punjab Act No. XLVI of 1948) to file returns showing gross turnover and they duly filed the returns. They showed their turnover at Rs. 96,298-9-9 and from this they claimed a deduction according to Section 5 (2) (a) (i) of the Act. However, before the Sales Tax Officer, the Assessing Authority, the position taken on their behalf was that they are totally exempt from sales tax because their preparations as Halwais are exempt under entry No. 50 in Schedule B to the Act and sale of sugar is exempt under entry No. 62 of the same Schedule. The Assessing Authority came to the conclusion that preparations of golian, makhanat phulian and reoris are not ordinary preparations by Halwais. Item No. 50 in Schedule B to the Act exempts "articles ordinarily prepared by Halwais, when sold by Halwais exclusively". The Assessing Authority came to the conclusion that the petitioners do not sell exclusively articles prepared by Halwais for apart from those articles they also sell sugar and other articles such as golian, makhana, phulian and reoris, which according to him are not articles ordinarily prepared by Halwais. He thus negatived the contention on behalf of the petitioners and assessed them to sales tax allowing certain deductions under Section 5 (2) of the Act.

(2.) THE petitioners say in the petition that, though they have remedies by way of appeal and thereafter revision, but the same are illusory because they cannot go in appeal without first depositing the amount of the tax levied and further the decision of the Assessing Authority is based on executive instructions issued by the Excise and Taxation Commissioner, respondent No. 1, and in the face of those instructions the appeal and the revision must necessarily be rejected by respondent No. 1. The second is not a satisfactory explanation for not having recourse to the remedies provided by the Act, but the first is, for it is in a way an onerous and a penal provision curtailing the right of appeal to this extent that the petitioners cannot exercise it until they make the deposit.

(3.) THE petitioners in their petition under Article 226 of the Constitution urge that the interpretation by the Assessing Authority of item No. 50 in Schedule B to the Act is erroneous and under that item they are entirely exempt from sales tax in the circumstances.