Purchase tax and reassessment limits: levy upheld under Article 301, and fresh reassessment allowed despite ordinary limitation rules.

Purchase tax on raw material used in manufacture was treated as a levy on the purchase price within the State, not as a direct restriction on the movement or sale of finished goods; the challenge under Article 301 failed and Article 304(b) did not apply. Reassessment was held not barred by limitation because Section 32 of the Haryana General Sales Tax Act, 1973, with its non obstante clause, permitted assessment or reassessment at any time to give effect to a court order, overriding the ordinary limit in Section 31. The levy and the reassessments were therefore upheld.

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Issues: (i) Whether purchase tax levied on raw material used in manufacture was hit by Article 301 of the Constitution of India or required protection under Article 304(b) of the Constitution of India. (ii) Whether reassessment orders were barred by limitation under Section 31 of the Haryana General Sales Tax Act, 1973 in view of Section 32 of that Act.

Issue (i): Whether purchase tax levied on raw material used in manufacture was hit by Article 301 of the Constitution of India or required protection under Article 304(b) of the Constitution of India.

Analysis: The levy was treated as a tax on the purchase price of raw material purchased within the State and consumed in manufacture. It did not tax the sale or consignment of manufactured goods. The levy operated only in specified situations and was not shown to directly or immediately restrict the free flow of trade. The constitutional challenge based on Article 301 therefore failed, and Article 304(b) did not assist the petitioners.

Conclusion: The levy was valid and was not unconstitutional under Article 301.

Issue (ii): Whether reassessment orders were barred by limitation under Section 31 of the Haryana General Sales Tax Act, 1973 in view of Section 32 of that Act.

Analysis: Section 32 contained a non obstante clause and enabled assessment or reassessment at any time when required to give effect to an order made by a court or other authority under the Act. Where earlier assessment orders had been quashed, fresh proceedings could be taken without being controlled by the limitation period in Section 31. The cases relied on by the petitioners, which concerned different provisions of the Income-tax enactments, were held inapplicable.

Conclusion: The reassessment orders were not barred by limitation.

Final Conclusion: The statutory levy and the impugned reassessments were upheld, and the writ petitions failed in full.

Ratio Decidendi: A purchase tax on raw material used in manufacture is not a direct restriction on trade under Article 301 when it is levied on the purchase and not on the movement or consignment of finished goods, and Section 32 of the Haryana General Sales Tax Act, 1973 excludes the ordinary limitation period where fresh assessment is made to give effect to a court order.

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