TaxTMI 
TaxTMI 
1989 (10) TMI 215
X X X X Extracts X X X X
X X X X Extracts X X X X
.... returns for the assessment year 1982-83 in accordance with section 25 of the Act and deposited the tax in accordance with the returns. The Assessing Authority issued notice under section 28 of the Act for finalisation of the assessment. During the course of assessment proceedings, the petitioner was told that the Assessing Authority wanted to levy tax on sales of paddy made to Messrs. Subhash Cereals and Pulses Processing Institute, Karnal (and other exempted dealers), who were granted registration certificates and were exempted from payment of tax under section 13 of the Act. The sale of paddy to these exempted units amounted to Rs. 11,30,733.35 on which tax at the rate of 4 per cent would come to Rs. 45,229.32. Rice and paddy are declared goods under section 14 of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act") and are also mentioned in Schedule D to the Act and there is only single point tax on paddy and rice and the same can be levied only on the "last purchase in the State by a dealer liable to pay tax under the Act ". In the scheme of single point tax the levy is confined to a single point in a series of sales or purchases by successive d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er alia, that section 17 read with entry 2-B of Schedule D to the Act merely defines the stage of levy of tax on paddy. It is last purchase in the State by a dealer liable to pay tax under the Haryana Act. The petitioner has shown sales of paddy to M/s. Subhash Cereals and Pulses Institute, Karnal, which unit was found to be not engaged in any manufacturing activities according to Khadi Gram Udyog Commission, Ambala Cantt., who conducted an enquiry against this unit in 1982 and came to the conclusion that the sale transactions to it were only paper transactions. The exemption certificate to this unit was issued on the recommendations of the Khadi Gram Udyog Commission. It was entitled to purchase and sell goods without payment of tax. Accordingly, the said exempted unit was not a dealer liable to pay tax on paddy. The petitioner was, therefore, the last purchaser of paddy liable to pay tax and has accordingly been taxed vide assessment order dated November 2, 1986. It was further alleged that the transactions of sale of paddy by the petitioner to M/s. Subhash Cereals and Pulses Processing Institute, Karnal, were bogus and only paper transactions, in order to claim deduction from th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s after taking into account the relevant factors such as those mentioned in 3rd proviso to section 27(1)(a)(iii) of the Haryana Act ibid. and the capacity of the purchasing unit concerned, the period for which it actually worked, the units of electricity consumed by it, etc., etc." In order to judge whether the impugned provisions suffer from the vice of vagueness and ambiguity, it is apposite to read the provisions of section 17 and entry 2-B of Schedule D to the Act at the very outset: "Section 17. Tax on declared goods.-Tax on declared goods shall be leviable and payable at the stage of sale or purchase, as the case may be, under the circumstances specified against such goods in Schedule D." "Serial Name of Circumstances Stage of levy. No. declared under which tax goods. to be levied. ---------------------------------------------------------------- 2-B. Paddy In all cases Last purchase in the State by a dealer liable to pay tax under this Act." A perusal of the above provisions makes it clear that all the requirements of a valid charging section have been incorporated in the impugned provisions. The commodity to be taxed has been mentioned. The circumstances....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., it will be appropriate to look at the relevant statutory provisions and orders of exemption: "13. Power to exempt.-(1) The State Government, if satisfied that it is necessary or expedient so to do in the interest of cottage industries or rural tiny industries may by notification, exempt any class of co-operative societies or rural tiny industrial units or persons from the payment of tax under this Act on the purchase or sale of any goods subject to such conditions as may be specified in such notification. (2) Where a notification under sub-section (1) has been issued by the State Government,- (a) a registered dealer shall not be entitled to charge tax on the sale made to such societies, industrial units or persons; (b) such sales shall not be included in the turnover of such registered dealer notwithstanding anything to the contrary contained in section 27; (c) a registered dealer shall be entitled to deduct from his taxable turnover the purchase value of goods specified in Schedule C to the extent such goods are sold by him to such societies, industrial units or persons notwithstanding anything contained in section 27. Explanation.-For the purpose....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the same is only shown in collusion between the two dealers, surely the authorities can ignore that sale and hold the dealer who had allegedly sold paddy to the exempted dealer liable to pay tax. However, as an abstract proposition of law, a sale of paddy by a dealer to an exempted dealer shall absolve the selling dealer from payment of purchase tax, because the last purchase of paddy in that case shall be by a dealer liable to pay tax under the Act and in view of the impugned provisions, the last dealer shall be liable to pay the purchase tax. In the present case, a finding has been recorded by the Assessing Authority that the petitioners had sold paddy to M/s. Subhash Cereals and Pulses Processing Institute, Karnal, M/s. Haryana Laghu Gram Udyog Samiti, Karnal and M/s. Chain Gram Udyog, Karnal. These units did not do any milling business. So, the transactions were only paper transactions. This fact was borne out by the letter dated March 8, 1983, by MemberSecretary, Haryana Khadi and Gram Udyog Board, Chandigarh and these sales were held to be taxed. The petitioners have not filed appeals because they pursued remedies by filing the present writ petitions. We have caref....