GOOD YEAR INDIA LIMITED Vs. STATE OF HARYANA

JUDGEMENT

(1.) THESE petitions, in which orders passed by the Assessing Authority for assessment years 1973-74 to 1977-78 and the demand notices issued for recovery of purchase tax, constitute a part of the series of litigation between the parties.

(2.) IN order to decide the legality of the impugned orders/demand notices, it is imperative to narrate facts which will give an over all picture of the historical perspective of the case. The petitioner No. 1 is engaged in, the manufacture and sale of automobile tyres and tubes in its factory at Ballabgarh, District Faridabad. The petitioner No. 1 purchases raw-material such as rubber and chemical headwares etc. either within the State of Haryana or from outside the State of Haryana for its manufacturing activities. Manufactured goods are despatched to the various depots of the petitioner situated within and outside the State of Haryana. It is registered under the Haryana General Sales Tax Act, 1973 (hereinafter referred to as 'the State Act') and the Central Sales Tax Act, 1956 (hereinafter referred to as 'the Central Act' ). The levy of purchase tax on raw-materials purchased by the petitioner Was successfully challenged by it in this Court. By its judgment dated December 4, 1982 (Good-year India Limited v. State of Haryana, 153 STC 163)this Court declared the levy of purchase tax to be ultra vires to Section 9 of the State Act. This judgment relates to the assessment years 1976-77 and 1977-78. For the assessment years. 1973-74, 1974-75 and 1975-76 the challenge made by the petitioner was upheld in Bata India Limited v. State of Haryana and Anr. , (1983) 54 STC 226. A Division Bench of this Court struck down the amendment made in the State Act by the Haryana General Sales Tax (Amendment and Validation) Act, 1983. The State of Haryana filed petitions for Special Leave to Appeal against the judgments in Good Year India Limited v. State of Haryana, 53 STC 163 and Bata India Limited v. State of Haryana, 54 STC 226. During the pendency of the Special Leave Petitions, the respondents issued notices to the petitioners Under Section 50 of the State Act. These were also challenged by the petitioners by filing writ petitions on the ground that the Government had no jurisdiction to take action Under Section 50 in the face of, the decisions of the High Court. Before these petitions could be decided by the High Court, the Governor of Haryana issued the Haryana General Sales Tax (Amendment and Validation) Act, 1984 (Act No. II of 1984 ). The petitioners amended the pending writ petitions and challenged the constitutional validity of the Amendment Ordinance No. 2 of 1984 and Amendment Act No. 11 of 1984. A learned single Judge (M. M Punchhi, J.) as he then was, who heard the writ petitions expressed serious doubts about the correctness of the view taken in Bata India Limited v. State of dlaryana, 54 STC 226. Therefore, the matter was placed before a Full Bench of this court. Vide its judgment in Desh Raj Pushap Kumar Gulati v. State of Punjab, (1985) 58 STC 393, the Full Bench overruled the judgment pf the Division Bench in Bata India Limited's case and upheld the validity of Section 9 (1) of the State Act as well as the levy of purchase tax. The petitioner company preferred Special Leave Petitions against the judgment of the Full Bench.

(3.) HISTORICAL narration of the case would be incomplete without making reference to developments which have taken place during the pendency of these petitions. The appeals filed by the petitioner against the judgment of the Full Bench in Desh Raj Pushap Kumar Gulati v. State of Punjab, (supra) came to be considered by the Supreme Court alpngwith a batch of other appeals in Mis Good-year India Limited v. State of Haryana, AIR 1990 SC 781 which were filed by the other dealers of the State of Haryana. Their Lordships of the Supreme Court decided not only the appeals filed against the decision of the Full Bench but also similar appeals filed against the judgment of the Full Bench by other dealers, some writ petitions directly filed in the Supreme Cojurt challenging the validity of the Amendment Act No. 11 of 1984 and some appeals filed by the dealers against the decision of the Bombay High Court. A two Judges Bench of the Apex Court declared that taxes sought to be levied Under Section 9 (l) (b)of the Haryana Act and Section 13-AA of the Bombay Sales Tax Act were taxes on consignment and, therefore, two provisions were beyond the legislative competence of the State. On that premise the judgment of the Full Bench of this Court and a judgment of the Bombay High Court in Wipro Products Limited v. State of Maharashtra, (1989) 72 STC 69, were reversed. The Supreme Court also upheld the judgments in Good-year India Limited v. State of Haryana, 53 STC 163 and Bata India Limited v. State of Haryana,2 54 STC 226.