CHAMAN LAL JAI KUMAR Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE constitutional validity of the third proviso to Section 27 (1) (a) (ii) of the Haryana General Sales Tax Act, 1973, has been assailed on the ground of its being violative of Article 19 (1) (f) and (g) of the Constitution of India in this set of thirty-five connected writ petitions. In addition, an equally vehement challenge has been laid to the retrospectivity given to this very provision with effect from 1st May, 1949, by Section 1 (3) of the said Act.

(2.) AS is manifest, the issue being pristinely legal, the facts pale into insignificance. Indeed the galaxy of the Learned Counsel hardly referred thereto and it would suffice to make a passing reference to the averments in Civil Writ No. 1390 of 1975 (Chaman Lal Jai Kumar v. Haryana State and Ors.) in order to provide the factual background. The petitioner-firm therein is engaged in the business of dealing in utensils and foodgrains at Jagadhri in District Ambala and was duly registered as a dealer under the Punjab General Sales Tax Act, 1948, as applicable to the State of Haryana, and the Central Sales Tax Act, 1956. Whilst filing the necessary sales tax returns, the petitioner-firm claimed the statutory deductions available to. them under Section 5 (2) (a) (ii) of the Punjab General Sales Tax Act, 1948, which was then extended to and enforced in the State of Haryana. These included sales to the tune of Rs. 1,40,000 and odd to Messrs. Bhagwati Metal Works, Jagadhri, alleged to be a registered dealer under the Act. However, the Assessing Authority by an order dated 22nd October, 1971, rejected the aforesaid sales apparently as being not genuine and aggrieved thereby the petitioner-firm preferred an appeal to the Deputy Excise and Taxation Commissioner, Ambala. The latter by his order dated 25th September, 1973, upheld the disallowance of the claim to the petitioner-firm except a sum of Rs. 1,40,297. 51 in respect of Messrs. Bhagwati Metal Works, but remanded the matter to the Assessing Authority to examine this claim in view of the amended provisions of the law consequent upon the enactment of the Haryana General Sales Tax Act, 1973. Pursuant to the said order, the Assessing Authority then issued a notice to the petitioner-firm requiring them to show cause as to why the deductions in respect of sales to Messrs. Bhagwati Metal Works be not disallowed and in the very notice it was pointed out that the recently inserted third proviso to Section 27 (1) (a) (ii) of the Act would be attracted to the case in view of the fact that retrospectivity had been accorded to the same by the statute with effect from 1st May, 1949. In reply to the said notice, the petitioner-firm took up various pleas including the one that the third proviso was not attracted to the case and further that the conditions laid therein were impossible of compliance. However, the Assessing Authority vide order annexure P-1 held that his enquiry reveals that the sales made to Messrs. Bhagwati Metal Works, Jagadhri, were not genuine and disallowing the deductions claimed therefor he reassessed the petitioner-firm with regard to those sales at the rate of six per cent and directed the recovery of the tax thereon at the amounts calculated. Aggrieved by the aforesaid orders, the petitioner-firm preferred the present writ petition primarily on the constitutional grounds noticed at the very outset.

(3.) IT is obvious that at the very outset it becomes necessary to read the relevant provisions of Section 27 of the Act: 27. (1) In this Act, the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom his turnover during that period- (a) on account of- (i) sale of goods specified in Schedule B; (ii) sales to registered dealers of goods other than the sale of goods specified in Schedule C and of goods liable to tax at the first stage of sale under Sections 17 and 18: Provided. . . . Provided. . . . Provided further that for the purposes of allowing deduction under this clause, the Assessing Authority or any other person appointed to assist the Commissioner under Sub-section (1) of Section 3 may examine the genuineness or otherwise of any such sale or declaration with reference, among other things, to the financial position, capacity to make purchases, nature and extent of business, and subsequent disposal of goods by the registered dealer to whom the sale is shown to have been made against declaration; It then suffices to point out that by Section 1 (3) of the Act aforesaid the third proviso quoted above is deemed to have come into force on 1st May, 1949.