MATHURA DASS KUNDAL LAL Vs. STATE OF PUNJAB

JUDGEMENT

(1.) WHETHER the certificate envisaged in the proviso to Section 5 (1-A) of the Punjab General Sales Tax Act, 1948, may be given by the registered dealer from whom the goods were originally purchased at the first stage is the somewhat intricate question which had necessitated this reference to the Full Bench, I take the view that the controversy is now authoritatively settled by a recent judgment of the final court. It, therefore, suffices to examine the matter with relative brevity.

(2.) THE petitioner assessee, who is a registered dealer, had purchased vegetable ghee to the tune of Rs. 1,85,020. 20 from Messrs. Janta Sugar Company, Messrs. Hardit Singh and Messrs. Partap Fair Shop, all of whom were admittedly unregistered dealers. They, in turn, had purchased the vegetable ghee from the manufacturer who was a registered dealer. Sales tax at the first stage of the sale, namely, from the manufacturer to the unregistered dealers had been paid. The unregistered dealers who sold the goods to the assessee issued the certificates in form S. T. XXII-A showing that the sales tax had already been paid at the first stage of the sale. On the basis of these certificates, the assessee claimed exemption from the payment of sales tax on the sale of vegetable ghee which he had purchased from the unregistered dealers and in respect of which sales tax had already been paid at the initial stage. The authorities constituted under the Punjab General Sales Tax Act consistently disallowed the claim of the petitioner assessee on the ground that he could claim exemption only if he had purchased the goods from a registered dealer and had produced a certificate signed by that registered dealer. According to them, this was the requirement of the law under the proviso to Section 5 (1-A) of the Punjab General Sales Tax Act (hereinafter called "the Act" ). At the instance of the assessee the Sales Tax Tribunal referred the following question for the decision of the High Court: Whether, under the facts and circumstances of the case, the Assessing Authority was justified in levying tax under Section 5 (1-A) of the Punjab General Sales Tax Act, 1948, on the sale of vegetable ghee to the tune of Rs. 1,85,020. 20, when the tax on the same commodity had already been paid by the manufacturers at the time of the first sales? The matter originally came up before a Division Bench consisting of S. C. Mital and A. S. Bains, JJ. Firm reliance on behalf of the petitioner-assessee was placed on the Division Bench judgment in Mulakh Raj Nand Lal, Bazar Gandawala, Amritsar v. Excise and Taxation Commissioner, Punjab, Patiala [1974] 33 STC 42, which was a case directly on the point and in favour of the petitioner-assessee. Bains, J. , however, took the view that though the decision in Mulakh Raj Nand Lal's case [1974] 33 STC 42 was plainly applicable, yet he doubted the correctness of the same and proposed its reconsideration by a larger Bench. S. C. Mital, J. , however, unreservedly agreed with the view in Mulakh Raj Nand Lal's case [1974] 33 STC 42 and, therefore, opined that no reconsideration thereof was necessary. In view of the difference of opinion, the matter was placed before 0. Chinnappa Reddy, J. , under Clause 26 of the Letters Patent. In his detailed reference order he concurred with the opinion expressed by Bains, J. , and therefore referred the case to the Full Bench to reconsider the ratio in Mulakh Raj Nand Lal's case [1974] 33 STC 42.

(3.) WHEN this reference came before us originally on 10th November, 1978, it was brought to our notice that the Division Bench judgment in Mulakh Raj Nand Lal's case [1974] 33 STC 42 itself was the subject-matter of appeal before their Lordships of the Supreme Court. We accordingly adjourned the case till the decision in the said appeal.