Retrospective sales tax amendment and agricultural produce exemption clarified for paddy purchase tax liability.

Retrospective fiscal amendments to the Haryana General Sales Tax Act, 1973 were valid because they cured a lacuna in the original levy and gave effect to the intended taxing scheme; the legislative challenge therefore failed. The exemption for agricultural produce in Schedule B applied only where the produce was sold by the person who grew it, so purchasers of paddy could not claim that benefit. The purchase tax liability on paddy was accordingly upheld, and the exemption claim was rejected.

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Issues: (i) Whether the Haryana Legislature was competent to amend the Haryana General Sales Tax Act, 1973 retrospectively so as to impose purchase tax on paddy already purchased; (ii) whether paddy purchased by the petitioners was exempt from purchase tax as agricultural produce under Schedule B.

Issue (i): Whether the Haryana Legislature was competent to amend the Haryana General Sales Tax Act, 1973 retrospectively so as to impose purchase tax on paddy already purchased.

Analysis: The amendment inserted a provision levying tax on goods in Schedule C at the stage indicated in that schedule, substituted Schedule C to specify the stage of levy for paddy as the last purchase within the State, and gave the amendments retrospective effect from the date of commencement of the principal Act. The Court held that the amendments merely removed a lacuna and cured an infirmity in the original levy, falling within the accepted scope of legislative power to make retrospective fiscal amendments intended to effectuate the original taxing scheme.

Conclusion: The retrospective amendments were valid and the challenge to legislative competence failed.

Issue (ii): Whether paddy purchased by the petitioners was exempt from purchase tax as agricultural produce under Schedule B.

Analysis: The exemption entry protected agricultural or horticultural produce when sold by the person who grew it. The petitioners were purchasers and not growers of paddy. The entry therefore did not extend to their purchases, and the exemption claim was misconceived.

Conclusion: The petitioners were not entitled to exemption from purchase tax on paddy.

Final Conclusion: The petitions failed on all substantive grounds, and the impugned purchase tax liability was upheld.

Ratio Decidendi: A legislature may retrospectively amend a taxing statute to cure a defect or lacuna and validate the intended levy, and an exemption confined to produce sold by the grower cannot be claimed by a purchaser.

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