1976 (9) TMI 156 - HC - VAT and Sales Tax

Purchase tax upheld on dried chillies under Punjab Sales Tax Act, clarifying legislative intent

The Court dismissed the petitions challenging the imposition of purchase tax on dried chillies under the Punjab General Sales Tax Act. It held that dried ... - Issues:1. Whether chillies are exigible to purchase tax under the Punjab General Sales Tax Act.Analysis:The judgment of the Court focused on the issue of whether chillies should be subject to purchase tax under the Punjab General Sales Tax Act. The petitioners argued that chillies should be considered as vegetables, listed in Schedule B of the Act, and thus exempt from tax under section 6. They contended that the State Government cannot include vegetables in Schedule C to levy purchase tax. The petitioners relied on a Supreme Court judgment emphasizing the common parlance interpretation of the term 'vegetables.' However, the Court noted that the Supreme Court's interpretation referred to fresh chillies used for consumption, not dried chillies typically sold by grocers. The Court highlighted that assessment orders were not issued, making it inappropriate to determine the nature of the chillies in question under Article 226 proceedings.Moreover, the Court emphasized that statutory provisions should be construed harmoniously. While 'vegetables' is a broad term encompassing various edible herbs and roots, the inclusion in Schedule B does not preclude levying tax on dried chillies listed in Schedule C. The Court referenced a Division Bench ruling rejecting a similar challenge to the constitutional validity of section 31 of the Act. The Bench held that the legislature's clear intent to tax goods in Schedule C, as evident from Amendment Acts, supports the imposition of purchase tax. The Court also highlighted the statutory requirement for the State Government to provide a 30-day notice before amending Schedule C, ensuring public awareness and procedural fairness.In conclusion, the Court dismissed the petitions, citing that the petitioners' arguments lacked merit. The Court upheld the legality of including dried chillies in Schedule C for purchase tax, emphasizing the legislature's intent and the procedural safeguards in place. The judgment reaffirmed the comprehensive statutory framework governing the imposition and assessment of purchase tax on specified commodities, including dried chillies.