Appeals allowed under Haryana Act, dismissed under Punjab Act. Writ petitions disposed, interest issue pending.

The appeals under the Haryana Act were partially allowed, exempting the assessees from purchase tax on paddy used for rice export. Conversely, the appeals under the Punjab Act were dismissed, holding the assessees accountable for purchase tax on paddy. The writ petitions were disposed of without costs, and the issue of interest was left open for determination in related cases.

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Issues Involved:
1. Interpretation of the Haryana General Sales Tax Act, 1973 and the Punjab General Sales Tax Act, 1948 in light of Article 286 of the Constitution and the Central Sales Tax Act, 1956.
2. Validity and application of retrospective amendments to the Haryana Act.
3. Applicability of Section 9(1)(b) of the Haryana Act and Section 4-B of the Punjab Act.
4. Liability to pay purchase tax on paddy used for manufacturing rice for export.
5. Entitlement to adjustment or refund of purchase tax under Section 15-A of the Haryana Act.
6. Constitutionality of Section 15-A of the Haryana Act.
7. Impact of Section 5(3) of the CST Act on the purchase of paddy for export as rice.
8. Differentiation between paddy and rice as distinct commodities for tax purposes.
9. Retrospective effect and validity of legislative amendments.
10. Application of Article 14 of the Constitution in the context of tax legislation.

Detailed Analysis:

1. Interpretation of the Haryana and Punjab Acts:
The court examined the provisions of the Haryana General Sales Tax Act, 1973, and the Punjab General Sales Tax Act, 1948, in light of Article 286 of the Constitution and the Central Sales Tax Act, 1956. The primary issue was the imposition of purchase tax on paddy used to manufacture rice for export.

2. Validity and Application of Retrospective Amendments:
The court noted that the Haryana Act had undergone numerous amendments, particularly Section 6, which was amended retrospectively from May 27, 1971. The amendments aimed to clarify the tax liability on the purchase of paddy.

3. Applicability of Section 9(1)(b) of the Haryana Act and Section 4-B of the Punjab Act:
Section 9(1)(b) of the Haryana Act, which was in force until April 1, 1991, exempted purchase tax on paddy if the rice procured was exported. Section 4-B of the Punjab Act was found to be analogous to Section 9(1)(b) of the Haryana Act, providing similar exemptions under specified conditions.

4. Liability to Pay Purchase Tax on Paddy:
The court concluded that under Section 9(1)(b) of the Haryana Act, the assessees were not liable to pay purchase tax on paddy used to manufacture rice for export. This was because the provision exempted such transactions from purchase tax, a principle upheld in previous judgments.

5. Entitlement to Adjustment or Refund of Purchase Tax:
Section 15-A of the Haryana Act, as amended, allowed for the adjustment of purchase tax paid on raw materials, excluding paddy, cotton, and oil seeds. The court held that the assessees were entitled to adjustment of purchase tax on paddy when rice procured from it was taxed.

6. Constitutionality of Section 15-A:
The court rejected the challenge to the constitutionality of Section 15-A, which denied refund of purchase tax on paddy. It held that the provision was not in violation of Article 286 or Section 15(c) of the CST Act, as it provided for the reduction of tax on rice by the amount of tax levied on paddy.

7. Impact of Section 5(3) of the CST Act:
The court held that Section 5(3) of the CST Act, which treats the penultimate sale as in the course of export, did not apply to paddy and rice as they were distinct commodities. Therefore, the purchase of paddy for export as rice did not qualify for exemption under Section 5(3).

8. Differentiation Between Paddy and Rice:
The court reaffirmed that paddy and rice are distinct commodities, a principle established in previous judgments. This distinction was crucial in determining the tax liability on the purchase of paddy.

9. Retrospective Effect and Validity of Legislative Amendments:
The court upheld the validity of retrospective amendments to the Haryana Act, noting that the Legislature has the power to legislate retrospectively, including tax legislation. It rejected the argument that such retrospective application was arbitrary or unconstitutional.

10. Application of Article 14:
The court found no violation of Article 14 in the selective denial of refund for purchase tax on paddy, cotton, and oil seeds. It held that the Legislature has greater latitude in tax matters, and such classification was not arbitrary.

Conclusion:
- The appeals under the Haryana Act were allowed in part, exempting the assessees from purchase tax on paddy used to manufacture rice for export.
- The appeals under the Punjab Act were dismissed, holding the assessees liable for purchase tax on paddy.
- The writ petitions were disposed of accordingly, with no costs.
- The question of interest was left open for adjudication in connected cases.

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