EICHER GOODEARTH LIMITED Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE writ petition seeks quashing of order dated March 27, 1992 passed by the Assessing Authority, Faridabad, creating liability against the petitioners under the provisions of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the Act"). The liability created also included liability to pay interest under section 25(5) of the Haryana General Sales Tax Act, 1973. In the writ petition, one of the contentions raised is that under section 9 of the Act, purchase tax liability has been created if raw material is purchased in the State and used in manufacture of goods which are sent out from the State other than by way of inter -State sale or export which was against the judgment of the honourable Supreme Court in Goodyear India Limited v. State of Haryana : (1983) 53 STC 163 (P & H). This was in the nature of tax on consignment of goods covered by entry 92B of List I. Further, contention raised is that liability to pay interest as per the scheme of the Act arises in respect of additional liability created under the assessment order and not on the date of transaction of purchase and sale or filing of return. The tax paid as per return does not carry any liability to pay interest till assessment is made. Reliance has been placed on the judgment of honourable Supreme Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer : (1994) 94 STC 422 (SC) : AIR 1994 SC 2393.

(2.) AS regards challenge to the tax liability under section 9 of the Act is concerned, it is not disputed by learned counsel for the petitioners that the matter is covered against the petitioner by the judgment of the honourable Supreme Court in Hotel Balaji v. State of Andhra Pradesh : (1993) 88 STC 98 (SC) : AIR 1993 SC 1048. Only contention which has been pressed is about levy of interest for the period prior to the assessment. On this aspect the matter is covered in favour of the petitioner by the judgment of the honourable Supreme Court in J.K. Synthetics Ltd.'s case : (1994) 94 STC 422 (SC) : AIR 1994 SC 2393 and learned counsel for the State has not been able to distinguish the applicability of the judgment. Accordingly, we allow these writ petition to the extent of levy of interest for the period prior to passing of the order of assessment. The Assessing Authority may issue fresh notice of demand accordingly by modifying the interest component in accordance with the principles laid down in J.K. Synthetics Ltd.'s case : (1994) 94 STC 422 (SC) : AIR 1994 SC 2393.