1995 (7) TMI 395 - HC - VAT and Sales Tax

Court clarifies purchase tax issue on sugarcane for sugar manufacturers under Punjab law

Saraswati Industrial Syndicate Limited Versus Joint Excise and Taxation Commissioner (Appeals), Ambala and Another

Saraswati Industrial Syndicate Limited Versus Joint Excise and Taxation Commissioner (Appeals), Ambala and Another - [1996] 100 STC 322 (P&H) Issues:1. Common question of law in multiple Civil Writ Petitions2. Impugned notice under section 40(2) of the Act of 19733. Applicability of sections 4-B and 11-A of the Act of 1948 to Act of 19734. Challenge to the notice by the petitioner-company5. Reference to Full Bench for determining legal questions6. Consideration of various legal questions7. Agreement between parties on filing returns and determination of tax liabilityAnalysis:The judgment by the High Court of Punjab and Haryana dealt with several key issues arising from multiple Civil Writ Petitions concerning a common question of law. The material facts were largely common across several writ petitions. The petitioner-company, engaged in sugar manufacturing, faced an impugned notice under section 40(2) of the Act of 1973, challenging various aspects of the assessment order, including the levy of purchase tax on sugarcane and other discrepancies in turnover calculation.The company contested the notice, arguing that sugarcane falls under a tax-free category and questioning the jurisdiction of the revisional authority to reassess turnover. Similar challenges were made in other cases, leading to a reference to a Full Bench to resolve legal questions regarding the levy of purchase tax on sugarcane sold by growers. The court emphasized the need for a detailed examination by a larger Bench of five Judges due to the complexity of the legal issues involved.During arguments, the parties raised crucial questions related to the repealed provisions of the Act of 1948, the revival of assessment, the validity of notices under section 40, and the competence of the revisional authority to reassess turnover. The judgment also referenced a Supreme Court decision on similar issues, providing clarity on the liability to pay purchase tax on sugarcane and the applicable provisions under the law.Ultimately, the parties reached an agreement on filing returns for multiple assessment years and determining tax liability as per the law in existence at the relevant time. The court directed the Assessing Authority to expedite the resolution of these matters based on the Supreme Court's decision, rendering the questions raised in the writ petitions academic. The judgment disposed of the writ petitions accordingly, allowing the petitioners to seek further directions if necessary and keeping all contentions open for future proceedings.