Purchase tax on paddy upheld despite export of rice, while writ relief was refused for disputed facts and alternative remedy.

Writ relief was declined because the Punjab General Sales Tax Act, 1948 provided an effective statutory remedy, and the petitioner's claim that it was a 100% exporter depended on disputed facts unsuitable for resolution under Article 226. On merits, paddy and rice were treated as distinct commodities, and section 4-B was held to levy purchase tax on paddy purchased for manufacture even where the resulting rice was exported outside India, absent any applicable exemption. The notices and consequential tax proceedings were therefore left undisturbed.

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Issues: (i) Whether writ jurisdiction should be exercised at the notice stage despite availability of statutory remedies under the Punjab General Sales Tax Act, 1948; (ii) whether disputed questions of fact regarding the claim of being a 100% exporter justified interference under Article 226 of the Constitution of India; (iii) whether purchase tax was leviable under section 4-B of the Punjab General Sales Tax Act, 1948 on paddy purchased and used for manufacture of rice exported outside India.

Issue (i): Whether writ jurisdiction should be exercised at the notice stage despite availability of statutory remedies under the Punjab General Sales Tax Act, 1948.

Analysis: In revenue matters, interference at an intermediate stage is ordinarily unwarranted where the statute provides a complete machinery of assessment, appeal, and revision. The existence of an effective alternative remedy is a strong reason to decline writ intervention, especially against show-cause notices. However, the petition had remained pending for several years, and the Court declined to non-suit the petitioner solely on that ground in the circumstances of the case.

Conclusion: The objection based on alternative remedy was rejected, though the Court still examined the matter on merits.

Issue (ii): Whether disputed questions of fact regarding the claim of being a 100% exporter justified interference under Article 226 of the Constitution of India.

Analysis: The pleadings showed a serious factual dispute as to whether the petitioner had exported the entire quantity of rice manufactured from the purchased paddy. The figures disclosed by the revenue indicated substantial stock and purchase figures compared with export figures, making the claim of being a 100% exporter doubtful. Such disputed factual questions could not be conclusively resolved in writ proceedings without clinching evidence.

Conclusion: The Court held that disputed questions of fact existed and this furnished an additional ground to decline writ relief.

Issue (iii): Whether purchase tax was leviable under section 4-B of the Punjab General Sales Tax Act, 1948 on paddy purchased and used for manufacture of rice exported outside India.

Analysis: The Court followed the settled position that paddy and rice are distinct commodities and that section 4-B imposes purchase tax on the purchase of specified goods used in manufacture, even where the manufactured goods are exported, unless the statutory exemption applies. The Court relied upon the prior Full Bench and Division Bench decisions upholding the levy, and held that the Supreme Court decision invoked by the petitioner did not dislodge that view. The statutory scheme did not exempt the petitioner from purchase tax on paddy merely because rice manufactured from it was exported.

Conclusion: The petitioner was held liable to purchase tax on the paddy used for manufacturing rice exported outside India.

Final Conclusion: The writ petitions failed on both maintainability and merits, and the notices and consequential tax proceedings were left undisturbed.

Ratio Decidendi: Where the statute creates a complete revenue recovery mechanism and the assessee's factual claim is disputed, writ interference is ordinarily unwarranted; further, paddy and rice being distinct commodities, purchase tax under section 4-B can be levied on paddy used in manufacture even if the resulting rice is exported.

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