TaxTMI 
TaxTMI 
TaxTMI 
1991 (2) TMI 348
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....ed by the Assessing Authority under section 10(6) of the Act for the assessee's failure to pay the taxes along with the return as required by section 4-B of the Act. Interest on the tax amount which the assessee had failed to pay was also claimed under section 11-D of the Act. The assessee disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful or intentional default on the part of the assessee to pay the taxes due under section 4-B of the Act as the assessee was under a bona fide belief that no tax was to be paid on the raw material purchased for the manufacture of paper which was ultimately sent outside the State on consignment basis. This impression, based on the language of the statute, stood confirmed by the subsequent decisions of the Punjab and Haryana High Court in the case of Goodyear India Ltd. [1983] 53 STC 163 and Bata India Ltd. [1983] 54 STC 226 till those decisions were overruled by the Full Bench decision in Des Raj Pushap Kumar's case [1985] 58 STC 393. The assessee further contended that it had acted on legal advice that it was not liable to pay any purchase tax and, therefore, in the absence of a clear....
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....STC 191; [1976] 1 SCR 38 and submitted that the assessee's case falls within the ratio of the said decision. But counsel for the assessee pointed out that this Court had considered the ratio of Kandaswami's case [19751 36 STC 191 (SC); [1976] 1 SCR 38 in the subsequent decision and had pointed out that in that case this Court was not concerned with the actual argument with which it was concerned in the subsequent case and, therefore, the decision in the former case is not an authority for the question of law involved in the subsequent case. In order to appreciate the rival submissions it would, we think, be appropriate to examine the language of section 4-B of the Act, which reads as under: "4-B. Levy of purchase tax on certain goods.-Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule B from any source and- (i) uses them within the State in the manufacture of goods specified in Schedule B, or (ii) uses them within the State in the manufacture of any goods, other than those specified in Schedule B, and sends the goods so manufactured outside the State in any manner other than by way of sale in the course of inter-Stat....
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....as used the said goods within the State in the manufacture of any goods other than those specified in Schedule B, and (iv) he has sent the goods so manufactured outside the State in any manner other than the one excepted. Before this provision can be invoked the above requirements must be strictly proved. The first requirement identifies the tax payer, the second and the third requirements identify the goods liable to tax in the event the fourth requirement of the goods so manufactured being sent outside the State takes place. Thus the liability to pay purchase tax does not accrue on the purchase of the raw material within the State or its use in the manufacture of goods other than those specified in Schedule B but falls on the dealer when the goods so manufactured are sent outside the State. To avoid a duplication of the levy the charging clause provides that the purchase tax will be leviable under section 4-B provided it is not leviable on the said goods under any other provision of the Act. Although the purchase tax is levied on the raw material purchased by the manufacturer, the actual levy is postponed till after the said raw material is consumed in the manufacture of anothe....
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....ticularly in respect of the point of time when the liability to pay tax arises. Under that provision, as here, the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State. We are, therefore, of the opinion that the ratio of the said decision of this Court in Goodyear India Ltd. [1990] 76 STC 71; AIR 1990 SC 781, applies on all fours to the main question at issue in this case. In the case of Goodyear India Ltd. [1990] 76 STC 71; AIR 1990 SC 781, this Court was concerned with the interpretation of section 9(1) and section 24(3) of the Haryana Act. The facts revealed that the assessee- company, which was engaged in the manufacture of automobile tyres and tubes at its factory at Ballabhgarh in Haryana, had purchased raw materials from within and outside the State for the manufacture of the said products. After manufacturing the same, the assessee-company despatched some part of the manufactured products to its depots outside the State. The Revenue sought to recover purchase tax on the raw material purchased in the State and consumed in the manufac....