PUNJAB KHANDSARI UDYOG Vs. STATE

JUDGEMENT

(1.) THE short question which needs determination in this reference under Section 22 of the Punjab General Sales Tax Act is whether a registered dealer can escape liability to sales tax in respect of purchase of goods used for the manufacture of goods which are tax-free ?

(2.) WE are not setting out the questions referred for the simple reason that, in our opinion, a basic question is involved on the decision of which the questions referred will have to be answered. The basic question is, whether a certificate issued which runs counter to the provisions of the statute, can nullify those provisions and if the dealer acts on the basis of that certificate he can avoid liability for the contravention of the statutory provisions ? The learned counsel for the assessee has placed his reliance on the Letters Patent decision of this court in The State of Haryana v. Karnal Gur and Khandsari Industries, Chulkana Road, Samalkha Mandi, District Karnal (L. P. A. No. 313 of 1970), decided on 5th October, 1971 [printed at page 423 infra]. This decision undoubtedly supports him. We are doubtful if a certificate issued contrary to the provisions of the statute Would lead to the result which necessarily flows from the Letters Patent decision. In our opinion, it will be proper that this reference is heard by a larger Bench.

(3.) WE, therefore, direct that the papers of this case be laid before my Lord the Chief Justice for constituting a larger Bench to hear and dispose of this reference.