CASTROL INDIA LTD Vs. STATE OF PUNJAB

JUDGEMENT

(1.) What is the rate of tax in regard to the Mobile oil and lubricants under the Punjab General Sales Tax Act, 1948 (for short the Act) is the short question that arises for consideration in this bunch of four civil writ petitions 1889, 2956, 3652 and 7006 of 2002 which were heard together. The answer to this question depends upon the interpretation to be placed on the provisions of Ordinance 3 of 2000 promulgated by the Governor of Punjab amending amongst others Section 5 (1) of the Act. The Ordinance was replaced by Punjab Act No. 7 of 2000. Since the issue involved is pristinely legal, reference to the facts of each individual case is not necessary.

(2.) Petitioners herein are public limited companies registered under the provisions of the Companies Act, 1956 and they have a vast network of sale of oils and lubricants all over the country including the State of Punjab. In the State of Punjab, they are registered dealers under the Act as well as under the Central Sales Tax Act, 1956 and amongst others, they sell mobile oil and lubricants. Petitioner in civil writ petition 1889 of 2002 filed its quarterly returns for the period ending 30.6.2001 and 30.9.2001. It deposited sales tax at the rate of 8 per cent for these quarters on the sale of Mobil oil. It received a notice dated 21.11.2001 from the Assessing Authority, Ludhiana pointing out that sales tax was payable at the rate of 20 per cent and that it should deposit a sum of Rs. 3,74,60,956/- as the balance amount due from it as sales tax at the rate of 20 per cent. It was also called upon to show cause why penalty under Section 10(6) of the Act be not imposed and interest under Section 11(d) of the Act be not levied. It is against this notice that Castrol India Limited has filed the present writ petition contending that it is liable to pay tax only at the rate of 8 per cent and that the respondents are not justified in demanding the same at the rate of 20 per cent. Similar notices received by other petitioners have been challenged in the connected writ petitions.

(3.) Section 5(1) of the Act was amended by the Punjab General Sales Tax (Second Amendment) Ordinance No. 3 of 2000 (hereinafter referred to as the Ordinance) which was promulgated on 25.1.2000 and the same was published in the Punjab Government Gazette on that date. This Ordinance was replaced by the Punjab General Safes Tax (Second Amendment) and Validation Act No. 7 of 2000. The relevant part of Sections (1) and (2) of the Ordinance with which we are concerned in these cases are reproduced hereunder for facility of reference.