HINDUSTAN LEVER LIMITED Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS writ petition under Articles 226/227 of the Constitution of India has been filed for quashing the impugned orders, Annexures P1, P2 and P4 and calling for the relevant records from the respondents.

(2.) THE petitioner-company has a subsidiary known as Hind Level Chemicals Limited (HICL) which was earlier known as Stepan Chemicals Limited (SCL ). The petitioner-company is engaged inter alia in the manufacture of soaps and detergents. It manufactures Rin Detergent Powder under a processing agreement with M/s Amar Poly Fab (P) Ltd. at Majra, Tehsil Kharar, District Ropar, while SCL under a separate agreement manufactures Wheel Detergent Powder through a processing agreement with M/s Amar Poly Fab (P) Ltd. For the purpose of packing the soaps and detergents manufactured by them, plastic bags/pouches are purchased by the petitioner-company as well as SCL from M/s Hemant Plastics and Chemicals Ltd. , Vadodara (Gujarat ). The petitioner-company is registered under the Punjab Central Sales Tax, 1948 (hereinafter referred to as the Act) at Khanna, District Ludhiana under Registration No. 45360010. SCL is also registered under the Act at Rajpura, District Patiala and its Sales Tax Registration No. is 63330015.

(3.) RESPONDENT No. 4 vide notice dated September 6, 1995 called upon the petitioner-company to show cause why action under section 14-B of the Act be not initiated. That Show Cause Notice was duly replied vide Annexure P1/a. The documentary evidence showing that SCL and the petitioner company have different registration numbers but due to inadvertence number of SCl was entered in the transport documents by M/s Hemant Plastic and Chemicals Ltd. Thereafter, respondent No. 4 passed a penalty order dated September 7, 1994 under section 14-B (7) of the Act, holding that the petitioner-company had contravened the provisions of section 14-B (2) and (4) of the Act and, as such, imposed a penalty of Rs. 1,09,500.00 Under Section 14-B (7) of the Act. The amount of penalty had been deposited by the petitioner-company with the State Bank of Patiala, Dera Bassi Branch, vide TR No. 4, dated September 13, 1994. According to the petitioner, that penalty has illegally been imposed by respondent No. 4. In appeal, order Annexure I was challenged before respondent No. 3 under section 20 of the Act. That appeal, vide order dated January 23, 1995 Annexure P2 was dismissed by respondent No. 3 in an illegal and arbitrary manner. The order, Annexure P2, was challenged in appeal before the Sales Tax Tribunal, Punjab, Chandigarh, under section 20 (2) of the Act. Grounds of Appeal are Annexure P3. That appeal was, however, dismissed by the Tribunal vide order dated April 30, 1996, Annexure P4, on wholly illegal, arbitrary and unjustified grounds. According to the petitioner-company, the orders Annexures P1, P2 and P4 are, therefore, liable to be quashed.