Purchase tax challenge upheld in part, but interest runs only from final determination when liability is disputed.

The validity of the amendment levying purchase tax under Haryana Act No. 4 of 1991 was upheld, as that levy had already been sustained by a Full Bench with Supreme Court approval. The challenge to the amendment therefore failed on merits. On interest, where the assessee had filed returns in time and the purchase tax liability itself remained seriously disputed until a revisional order finally determined it, interest could not run from the original return date. Interest was held payable only from the date liability was finally fastened, and the levy from the return date was quashed.

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Issues: (i) Whether the amendment levying purchase tax under Haryana Act No. 4 of 1991 was legally valid; (ii) whether interest could be levied from the date of filing of the return or only from the date on which liability to purchase tax was finally determined.

Issue (i): Whether the amendment levying purchase tax under Haryana Act No. 4 of 1991 was legally valid.

Analysis: The validity of the amendment had already been upheld by a Full Bench, following the Supreme Court's approval of the levy. The challenge therefore did not survive on merits.

Conclusion: The challenge to the legality of Haryana Act No. 4 of 1991 was rejected.

Issue (ii): Whether interest could be levied from the date of filing of the return or only from the date on which liability to purchase tax was finally determined.

Analysis: Interest was imposed on the footing that purchase tax became payable on hire charges falling within the definition of purchases. However, there was a serious dispute regarding the levy itself, and the assessee had filed returns in time and paid tax accordingly. In such circumstances, interest could not run from the original return date; it would arise only after the liability was finally fastened.

Conclusion: The levy of interest from the date of filing of the return was quashed, and interest was held payable only from the date of the revisional authority's order finally determining liability.

Final Conclusion: The writ petition failed on the validity of the purchase tax amendment but succeeded in part on the question of interest, which was confined to the period after final determination of liability.

Ratio Decidendi: Where tax liability is seriously disputed and is finally determined only by a revisional or appellate order, interest cannot be charged from the original return date and runs only from the date on which liability is finally imposed.

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