ZIMIDARA AGRO MILLS Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE appellant a rice mill, exempted (annexure A2) under rule 28A of the Haryana General Sales Tax Rules, 1975 (hereinafter mentioned as, "the HGST Rules") is, however, subject to the Haryana Rice Procurement Levy Order, 1985 (hereinafter mentioned as the 1985 Order). A notification dated April 21, 1999 (annexure A3), for the crop year 1998 -99, was issued by the Haryana Government amending the 1985 Order, whereby procurement price of rice was made inclusive of purchase tax. The Assessment Authority, while framing assessment for the assessment year 1998 -99 (annexure A4) assessed the appellant to purchase tax on the ground that purchase tax is part of the sale price determined and paid by the DFSC to the appellant. The component of purchase tax received in levy price from the Department of Food and Supplies, Haryana, to the tune of Rs. 4,28,738 was directed to be recovered under section 49 of the Haryana General Sales Tax Act, 1973 (hereinafter mentioned as "the HGST Act") from the appellant as being an exempted unit, it was not entitled to charge tax. This assessment order (annexure A4) was unsuccessfully challenged before the first appellate authority. The second appeal filed before the Haryana Tax Tribunal (hereinafter mentioned as the Tribunal) was allowed and the matter was remitted to the Assessing Authority for adjudication. It also requires mention that the appellant invoked the writ jurisdiction of this court as similar petitions were also pending. The petitions were dismissed on January 14, 2009, vide judgment (annexure A7). Undeterred, the petitioner filed an appeal before the honourable Supreme Court of India. A bunch of appeals including the appeal filed by the petitioner were dismissed by holding that purchase tax charged on sale of levy rice, made to the DFSC is part of the sale price, and, therefore, recoverable from the petitioner. However, the issue with regard to levy of purchase tax in case of exempted units was left open. The Assessing Authority passed another assessment order raising a demand for payment of purchase tax on the purchase of paddy made by appellant.

(2.) THE assessment order dated July 16, 2010 (annexure A8) which is the genesis of the second round of litigation was upheld by the first appellate authority, i.e., Joint Excise and Taxation Officer (A), Ambala on February 28, 2011 (annexure A10). In this order, confirming the finding of the assessing officer, exigibility of the appellant to payment of purchase tax was confirmed. Repelling the contention of the appellant that he is not liable to pay purchase tax and that the same should be adjusted towards notional sales tax liability, was held to be devoid of any merit. When the appellant took the matter further in second appeal, the Tribunal in its order dated July 29, 2011 (annexure All) affirmed leviability of purchase tax on the appellant unit notwithstanding that it was exempted from payment of sales tax. However, taking into consideration facts and circumstances of the case, instead of making its own adjudication, the Tribunal accepting plea of the Revenue taking shelter in earlier decision of the Tribunal and of this court in the light of observations of the honourable Supreme Court of India, decided the matter against the appellant by holding as under:

(3.) COUNTERING these arguments, the stand of the Revenue is that even if matter of levy of general purchase tax on exempted units was left open to be decided later by the honourable apex court, the distance already travelled by the Tribunal (annexure A6) as also by this court (annexure A7) is to hold the field till the matter is finally decided by the apex court.