Expanded sale and purchase definitions made compulsory rice procurement transactions taxable under the Haryana sales tax framework.

After the Forty-sixth Amendment, transfers of property in goods otherwise than under a contract fell within the expanded concept of sale or purchase under Article 366(29A). The Haryana General Sales Tax Act, 1973 was correspondingly amended to widen "sale" and "purchase" retrospectively from 2 February 1983, and the procurement price under the Levy Order was stated to be exclusive of taxes. On that basis, rice procurement transactions were treated as taxable, and sales tax could lawfully be added to the procurement price. The levy of sales tax on rice procurement was upheld, and the challenge failed.

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Issues: Whether, after the Forty-sixth Amendment to the Constitution and the corresponding amendment to the Haryana General Sales Tax Act, 1973, the State was entitled to levy sales tax on rice procurement transactions under the Haryana Rice Procurement (Levy) Order.

Analysis: Article 366(29A) brought within the concept of tax on the sale or purchase of goods transfers of property in goods otherwise than in pursuance of a contract. The Haryana General Sales Tax Act, 1973 was amended by Act 11 of 1984 by expanding the terms "sale" and "purchase" in section 2 so as to cover such transfers, and the amendment was given retrospective effect from 2 February 1983. The procurement price fixed under Schedule III of the Levy Order was also stated to be exclusive of taxes, which meant that the dealers could lawfully add sales tax to the procurement price. In these circumstances, the transactions of procurement of rice fell within the taxable field.

Conclusion: The levy of sales tax on the dealers in respect of the procurement of rice was upheld and the challenge failed.

Final Conclusion: The writ petitions were dismissed, and the State's power to tax the procurement transactions was sustained.

Ratio Decidendi: After the constitutional expansion of the concept of sale or purchase and the corresponding statutory amendment, compulsory transfers of property in goods under levy orders became taxable transactions if the statutory definition of sale or purchase was widened to include them.

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