UNITED RECELAND LIMITED Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE concept of imposition of tax is as old as the human civilisation is. Tax in one form or the other was collected by all forms of Government for providing protection, security and other amenities to the citizens. It is compulsory acquisition of property by the State ostensibly on behalf of the assessee, for the purpose of providing amenities and looking for the vital interests of the society. Even in primitive times the process of compulsory acquisition of the property of the subjects was reserved to if not in cash positively in kind. However, with the development of the concept of the State ways and means of acquisition of the property for the benefit of the State have undergone a sea change. Human instinct has always been at work to avoid the payment of the tax compulsorily resorted to by legal and other means with antagonistic approach adopted both by the State and the assussee of levy and collection of tax which is in existence in all the countries of the world from the days of the known history. In India also, the existence and inception of system of taxation is referred to by Manu in his Manusmriti which prescribes how a duty is to be imposed on the transaction of sales. Manu even acknowledged the existence of sales tax as did Kautilya also. Meagasthenu a renowned traveler to India has also referred to the existence of such a tax. After the first world war, the sales tax was first visualised in the report of the Taxation Enquiry Committee (1924 -25 ). In this background and with the development of concept of sales tax in the rest of the world, entry in Government of India Act No. 48 was made proposing the imposition of sales tax. However relevant provisions were made for the imposition of sales tax in the Constitution of India, 1950.

(2.) IT is unfortunate that tax laws in our country are technically couched making its interpretation difficult. The language used in the fiscal laws in such the wriggling out of which is left to the wisdom of few. It has been acknowledged by all concerned that the most difficult law in the country to be interpreted is the law dealing with the taxation. The difficult language and phrases used in such enactments may be intentional giving a vast field to the evaders of the tax of fighting and providing ample opportunities to the wilful defaulters and evadors to resort to such technicalities with oblique motive of avoiding taxation intended and declared to have been imposed for the purposes of the general masses. The time has come which necessitates not only the restructuring of the taxation law system but to also provide a plain and capable and smooth interpretation reflecting and demonstrating the object sought to be achieved by the Legislature. It is also acknowledged that our law makers are admittedly not the law framers. The law framers are the constituents of bureaucracy apparently not committed in securing the goal as enshrined in the Preamble of the Constitution adopted on January 26, 1950. The time and necessity to take appropriate action is desired to be taken note of by resorting to remedial measures by making taxation law simple and easily understandable.

(3.) THE petitioners are admittedly exporters of rice outside India. They purchase paddy form the States of Punjab and Haryana and also from other States for the purposes of dehusking it for export of rice outside India. The petitioners have claimed to be earning valuable foreign exchange for the Country. The paddy is declared commodity under Section 14 of the Central Sales Tax Act (for short the Central Act ). Section 15 of the Central Act prescribes restrictions and conditions in regard to tax on sale or purchase of declared goods within the State. It provides that every sales tax law of State shall, in so far as it imposes or authorises the imposition of tax on the sale or purchase of declared goods, to be subject to various conditions including the condition : "where a tax has been levied under that law in respect of the sale or purchase inside the State, of any paddy referred to in sub Clause (i) of Clause (1) of Section 14, the tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on such paddy. " Schedule D of the State Act prescribes the point of levy of tax on paddy as the first sale within the State by a dealer liable to pay tax when imported from outside, and the stage of levy is last purchase within the State by a dealer liable to pay the tax when such purchase of paddy is made within the State. The Assessing Authority held the petitioners not liable to pay any purchase tax under the State Act. The Assessing Authority created a demand of 'nil' and the petitioners after making various adjustments of refund due to it deposited the balance to square up the demand. The Deputy Excise and Taxation Commissioner (Inspection) -cum -Revisional Authority, Karnal issued a notice under Section 40 of the Act proposing to take suo -motu action in respect of the adjustments allowed under Section 15 -A of the Act for the put chase value of paddy worth the amount mentioned in the notice, the rice procured out of which had been sold in the course of export outside India. It is contended that the petitioners enjoyed the exemption under Section 9 of the Act and could not have been directed to pay tax for the period when Section 9 was admittedly on the statute book. It is further contended that the petitioners have been granted the certificate in form ST -3 under which they were entitled to purchase paddy to be used for export of rice without payment of tax. It is submitted that the denial of refund or adjustment in the case of paddy while permitting the same in respect of other items is violative of the. provisions of Articles 14, 19 (1) (g), 286, 301, 302, 304 and 300 -A of the Constitution of India besides being violative of Sections 5 and 15 (c) of the Central Act and Sections 9 and 12 of the State Act. Section 15 -A of the State Act substituted by Haryana Ordinance No. 1 of 1992 and Act No. 9 of 1993 is alleged to be unconstitutional and liable to be declared void.