Ier v. St at eofPunj aband ot hers

1 99 4 4 VP No9019 of2005 1 7 Ier 1 S 4114 lN THE HI GH COURTOF PAB CHANDI GARH HARYANA AT CWPNo9019 of2005 Dat e MlsI ndianSucroseLt d Versus eeePet it ioner St at eofPunj aband ot hers 991e 1 1 r U Z C C8 Z W CORAM HONBLEMR JUSTI CEMM KUMAR HONBLEMR JUSTI CE JASW SI NGH Present Mrshok Mr MRSham a Sr Advocat ewit h Advocat efor t he pct it ioner I CLGoyalSr Advocat ewit h Mr Mr SandeepGoyalAdvocat e Mr Vivek Bhandari Mre GlZSet hiAdvocat efor t he fort he 1To be referredt o t heReport eror not 2 Y t hej udgem eshouldbc in t he Digest274 MMlUMAR J This is a bunch of 52 pet it ionsfiledunderArt icle226 of t heConst it ut ionraising a com m on of law The prayerm adein all lS t hepet it ionsforquashingt hcnot ificat iondat ed275988 im posinga t ax C 50P for 100 Kgs on t he of sugarcanc by or Oll behalf of t he cane m ill like t he The have also of declarat iont o t he effect t hat no t ax on sugarcane could be levied and collect ed from t he pet it ioncrunder t he provislons of t he General Sales Tax Act 1948 or brevit y t he PGST Act 1948 in t he face of lcvyand collect ion of such like t ax under Sect ion17 of t he Sugarcane of Purchaseand Supply Act 1953 4forbrevilyt le 1953 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh all aspect s Act lwhichis claim edt o be a specialAct supply and levy of purchasct ax on t he JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 1 1 400 4 r 10 CWP No 9019of 2005 2 1 01 U Z Qf I c8 Z 0a I n t hat regard prim aryrelianceof t he pet it ionerhas been on t he of Honble t he Suprem eCourt in t he case of Govind SugarMill r 1 V St at eof Bihar 19999 SCC 76ikewise on t he sam e analogya prayer has also beenm ade for declaringSect ion 19 I t em 40f ScheduleH of t he Punj abValue Added Tax Act 2005 or brevit yt he 2005 Act l as unconst it ut ional t he sam e would not be applicable111 respect of and purchaset ax t husnot leviableunder t he saidAct The pet it ionersare in t he m anufact ureof sugar m olassespress m udsand They sugarcane which is t he m ain raw m at erial from t he ers t o producesugaror m olassesBot h t he aforesaid product sare sold under t he Govem m ent Cont rol Orders The rat e of raw m at erial 1 sugarcane being producet o be paidt o farm ers and sellingsugarcanelis also fixed by t he Govem m entof I ndia from t im e t o t im e I t can also be m odified and increasedbyt he St at e Govem m ent under t he 1953 Act The t ax 1S collect edbyt he St at eof Punj abundert he of PGST Act 1948 The claim of t he is t hatin pursuance of power under Ent ry54 of List I I of 7 Scheduleof t he Const it ut ion t he St at e of Punj abhas also enact ed a specialAct which is refeiTed as 1953 Act I t has been claim ed t hat 1953 Act deals wit h all aspect sof supply and levy of t ax on t he sugarcane suppliedt o sugar fact oryby cane growers A speciflcreferencehas been m adet o Sect ion 17 of t he 1953 Act which of purchaset ax The case of t he pet it ionersis t hat PGST Act 1948 im osest ax on sale or of all goodsinluding sugarcane generally2lt hought hat Act has also been enact edin pursuance of exercise of power under Ent ry54 of List Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh I I of 7 Schedule of JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document t he 1 1 401 r V CWPNo9019 of2005 3 r1 m 0 0 t 4 t D Z Q1 c8 1 7 Z Const it ut ionAccordingt o t he oft he PGST Act 1948 a t ax is im posedwit h referencet o t axable ret um of dealer and it it s own for t axat ionand collect ionoft ax The case of t he in t he p6t it ionand duringt he course is t hat while consideringsim ilar legislat ionwit h parim at ena provlSlOns t he sale and of sugar cane in t he St at e of Bihar Honble t he Court has held t hat levy under t he specialAct alone would survive and reliance has been placed on t he j udgem entof Honblet heSuprem eCourt in Govind SugarMillss case t o t he averm ent sm adein t he pet it iont hepet it ioner m ill has been t reat edas a reserved area under clause60f t he SugarCane Cont rol Order 1966 which has been issued by t he Cent ral Govem m ent undert heEssent ialCom m odit iesAct 1955 or brevit yt he 1955A As a of t he not iflcat ion t he sugarcane grower in a as a reserved area are direct edt o supply75010of t he sugarcane by t hem t o t he m ill The m ill is also bound t o t ake delivery of t he sam e A on t he sugar cane growers from export ingt heir produce out sidet he reserved area and like wise t he m ill is also Som sugar cane out sidet he reserved area Any violat ion of t he Cont rol Order and t he not ift cat ions issuedt hereunderwould at t ract crirninal under Sect ion70f t he Essent ialCom m odit iesAct 1955 The case oft he pet it ionersis t hat neit her t he farm ersare al owed t o sell t heir produce out sidet he reserved area nor t he m ill is perm it t dt o sugarcane from out sidet he reserved area Therefore t he prohibit ionbet ween t he cane growers and t he m ill of propert ybecauset here is no elem ent of free JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh t he charact erof 402 1 4 I Cr Z r c8 02 Z CWPNo 9019of2005 4 consent which is an of a valid agreem entI t is also t hat t here is no scope for principleofdem andandsupplyt o operat e and t he sugar m ills like t he are boundt o pay t he st at ut ory pricet o t he cane growers as fixed byt heCent ralGovernm ent I n t he writ t enst at em entfiled byt he t he broad fact s have not beendisput edI t has howeverbeenpoint edout t hat t he pet it ioner m ills have beenpayingt ax on of sugarcane under t he PGST Act 1948 I 0They are also liablet o pay t he t ax in accordancewit h t he PrOVlSlOnSof 2005 Act The St at e has assert edt hat 1953 Act was enforced111ordert o cont rol t he supply of sugar cane and t ax on t he basis of t he rat e of t he sugarcane was levied As pert he not iflcat iondat ed 2751998 issuedunderSect ion oft he 1953 Act 50 paisafor 100 Kgs of sugarcane becom espayableon t he of sugarcane from t he farm ersI t has beenclarit led t hat under t he 1953 Act t ax is payable on t he basis of weight when t he sugarcane is from t he farm erswhereas undert he 2005 Act t het ax is on t he basis of rat e The argum ent t hatt hereis no connect ionbet weent het ax paidundert he 1953 Act or under t he 2005 Act as t he incidence of t ax in bot h t he cases differentI t has t hus been assert d t hat t wo t axes under t wo different do not t ant am ount t o doublet axat ion I t is also claim edt hat in any case t hereis no bar under t he Const it ut iont o im poset wo Uixes under t wo different enact m ent s on t he sam e goods which m ightbe based on t he sam e like Ent r 54 of List I I of7 Schedule Therefore t he pet it ioner is undera legalobligat iont o pay Tax under sect ion19 oft he 2005 Act or under PGST Act 1948 even if a nom inal t ax is claim ed under t he 1953 Act The pnm iry reliance by t he St at e of Punj abin t heir reply has Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 1 1 403 17 m U Z 2 1f e S 1 Z 0 CWP No 9019of2005 5 been on t he of Honble t he Suprem eCourt in t he case of Jagat iit SugarMillsv St at e of Puniab and anot her 1995 SCC 67 where t he levy t ax under t he PGST ct 1948 has been upheldI t is claim ed t hat t he aforesaidj udgem enthas nOt been consideI ed in t he lat erj udgem entin t he case of Govind SugarMillssupra9I n Jagat iitSugarMillss 6supra has been held t hat t ax is payablet o t he St at eGovernm entif not under Sect ion4 B t hen under Sect ion41 of t he PGST Act 1948 The sugar m ills in t he t at e of Punj abhavebeenassessedt o t ax aAert he decisionoft he Full Bench in t he case of Morinda Cooperat iveSugarMills Lt d v Assessing Aut horit vandot hers 1995 991STC 468 When t he m at t ecam e up for considerat ionbefore t his Court for m ot ion an int erim order was passed t he from resort ingt o coercivest epsfor recoveryoft he t ax dem anded I CLGoyalMr GRSet hi and Mr Vivek Bhandari leam edcounselhaveaddressedargum ent son behalfoft he Mr Ashok AggarwalMr pet it ionersTheir subm issionis inspired by t he of Honble t he Govind SugarMillss case supralTheyhave arguedt hat 1953 Act beinga special enact m entfor levy of purchaset ax sugarcane also dealswit h of product ionsupplyand dist ribut ion of sugar cane Accordingt o t he leam ed counsel it would override t he provisions of PGST Act 1948 or even t he 2005 Act I t has been subm it t ed t hat bot ht he PGST Act 1948 and 2005 Act are generalAct s which provides for collect ion of cofnm ercial t aXes on sale and purchase of all goods whereas1953 Act d3als onlywit h t he of sugar Placing reliance on variousphrasof t he j udgem entrendered in t he case of Govind Sugar Millss Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh case s lpral it has been subm it t ed t hat bot h t he Act s have JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 464 4 4 9 J Ce CWP No9019 of2005 6 j 0 l4 I Z 2 C I c8 Z a beenfram edin exercise of legislat ivepowersderived from Ent ry54 of List I I of 7 Scheduleand t hereforet he 1953 Act would govem t he levy of purchaset ax as it is a specialAct Theyhave also referredt o t he st at em ent of obj ect sand reasons wliich deals specifit allywit h t he purchase of sugar cane t o prot ectt he int erestof t he cane growers Referringt o t he reasoning by a Division Bench of t he Pat naHighCourt in New I ndia Sugar Mills Lt d and anot her v St at eof Bihar and ot hers199801091STC 394 which has been reversed 111 Govind SugarMillss case supral leam ed Counselhavepoint edout t hat no doublet axat ion could be j ust ifledon t he sam e or person byI evyingt he sam e under different enact m ent s wit houtrepealingt heot her The Division Benchoft he Pat naHighCourt in New I ndiaSugarMillss case supralhast akent heview t hat t wo t axat ionOn t he sam e or person could be im posedbydifferent enact m ent s which has been reversed t o t he leam ed counsel it cannot be j ust i8edbykeepingin view t hedifferentobj ect sofbot h t hest at ut es I t has been Airt her subm it t edt hat of Honble t he Court in Jagat iit Sugar Mills case 0supraalt houghhas been renderedbya 3JudgeBench and in Govind SugarMillscase supralhas been rendered by a 2TudgeBench yet t he appearst o laydown t he law m ore and accurat elyand t hereforeit hast o be followed for t he view t akenbyt he Honble Suprem e Court in Govind SuRarMillst case supral Mr Set hi has subm it t edt hat earlier renUered111Jagat iitSugarMillscase supra has failed t o t ake int o account t ht lproVlSlOnsof t he special enact m ent 1953 Act I n support of his subm issionlearnedcounsel has placed reliance Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh on t wo Full Bench j L of t his Court rendered in t he cases of Mls JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 405 r j ll J CWP No 9019of2005 7 1 1 0 U lI Z Of c8 Z 0a I ndo Swiss Tim e Lt d Ve Um rao and ot hers 1981 PLR 335 and Mls KulbhushanKum ar and Co v St at eofPuniabandanot her 1983PLR 768 Per cont ra Mr PlCJain and Mr Am ol Rat t an leam ed Addit ional Advocat e Generals Punj abhaile arguedt hat t he m at t er is no longer as t he quest ionhad fallen for considerat ionof Honble t heSuprem eCourt in t he case of Jagat iitSugarMills lpra9Accordingt o t he I earned counsel t he sugarcane sold byt he cane growerst hem selvest o t he pet it ionerm ill or purchaset ax under Sect ion4 B but would be so excigableunder Sect ion 4 11 t he sugar m anufact uresm ay not be read wit h Sect ion 6 The aforesaidVlew has been considered by a e t o JudgeBench of t his Court in t he case of Morinda Cooperat iveSum r Mills AssessingAut horit vand ot hers 1995999STC 468 Followingt he t aken by t he Honble Court in Jagat iitSugar Mills supralt he Full Bench held t hatt hepurchaserof sugar cane 1S liable t o pay t ax The learnedSt at eCounselhave also arguedt hat even at t he t im e when t he in Jagat iit Sugar Mills case and Morinda Cooperat iveSugarMillscase supralwas deliveredt he sugar m ills have been paying t ax on t he of sugar cane from t he cane growersundert he 1953 Act Thus t he argum entis t hatm erelybecauseaft er t heBihar FinanceAct Bihar SugarCane of Supply and Purchase9Act 1981hascom e would not leadt o t he quest ionwhich has been set t led Anot her subm issionm adeby t he leam ed St at e Counel is t hat t here is not hing111 Art icle 265 of t he Const it ut ion which t hatt here could be no double t axat ion I n t hat regard reliance ha been placed on t he j udgem entof Honble t he Suprem eCourt in t he c4seofArvinder Singh v St at e of Puniab AI R 1979 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 406 1 1 1 011 CWP Noe9019of2005 8 SC 321 I t has been arguedt hat even if on t he sam e subj ectm at t er t he choosest o levyt ak t wice t hereis no inherentinvalidit yin t he flscal advent uresave whereot her exist The aforesaid view has also beenfoI lowed by Honble t heSuprem eCourt in t he case of Radhakisan Rat v Addl Collect or Dr and ot hers AI R 1995 SC 1540 1 0 Replyingt o t he ot her argum ent slearnedSt at e counsel have point edout in Jagat iitSlar Mills case was renderedbya 3m 4 U JudgeBench whereas beenrenderedby a 111Govind SugarMills case Bench I t has been subm it t edt hat Full Bench X 41 Z 1 X r2S Z t oft his Court in t he cases of KulbhushanKum ar and I ndo Swiss Udsupra9do not advancet he case of t hepet it ionerin as m uch as bot h t he Full Benches refer t o conflict of coeequalBenches of superiorCourt Accordingt o t he leam edcounsel t he of t he Full Bench would iipplyif t he coequalBenches of t he superiorCourt have delivered t he cont lict ing whereas in t he present case t he coveringt he issue has been delivered by a 3JudgeBench and t hefore it is not open t o t his Court t o concludet hat purchaset ax under Sect ion4KlIoft he PGST Act 1948or 2005 Act are not payable The 6rst quest ionwliich would anse for det erm inat ion1S whet her Bench of t he Honble Suprem eCourt rendered lI l t he case of Jagat iit SugarMills supr is binding on t he part iesI n t he in nam elywhet hert lie sugar m ill was liable t o pay purchaset ax on t he sugarcane by it from t he growers of t he sugarcane I n a cat egoricalanswer t o he aforesaid quest ionit has been held t hat Sect ion 4 levy of purchaset ax on all sales JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 1 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh of t he PGST Act 1948 407 V 4 CWP No 9019of2005 9 Once t he aforesaid 111t he cat egoricalt erm s lays 0 0 t D I Z e2 r 1 r25 Z m down t hat purchaset ax iS leviable under Sect ion 4619t hen it is well nigh im possible for us t o say t hat sucll a t ax cannot be levied on t he groundt hat PGST Act 1948 is a st at ut e of generalcharact erwhich dealswit h sale or purchaset ax in respect of all goodswhereast he 1953 Act 1S a specialAct which dealswit h all aspect sincludinglevy of purchaset ax on sugar cane The pet it ionerhas convassed for t he cont raryView t he basis of t he rendered by 2 JudgeBenchoft he Honble case of Govind SugarMills supralThe aforesaid rendered Court in t he has been Bihar Finance Act 1981 and Bihar Regulat ionof Supplyand Purchase Act 1981 by holdingt hat bot h t he Act s would operat ein t he sam e fleld The principlefoI lowed by t he Honble Court is t hat t he Act beinga specialAct pert ainingt o all aSPect sof cont rol of purchaset ax has t o be t he sugarcane as well as levy of over t he FinanceAct which em power t he St at et o levy all com m ercial t axes whereast he sugarcaneAct em poweredt he levy of purchaset ax only on sugarcane Such a course would not be availablet o us as t hespeciflcAct which is applicablet o t he pet it ionernam elyPGST Act 1948has been by a 3 JudgeBench 111t he case of Jagat iitSugarMills case supra Furt herm orewe would prefert he byt he Honble Court for PGST Act 1948 which lS in quest ionbefore ll The of Govind Sugar Mills upralhas em ergedout of different st at ut e Jt is needless t o t hat t he declared lll respect of by t he Honble Suprem eCourt a law t he fI eld occupied by it which is binding on all Court swit hin t he t err it oryofI ndia includingt he HighCourt s I n t hat regard Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 408 CWP No 9019of2005 10 1 reliancem ay be placed on t he observat ionsm ade bya Const it ut ion Bench of t he Honble Suprem eCourt in t he case of Behram Khurshid Pesikack Ve St at eofBom bav AI R 1955 SC 123 Even ot herwise t he decision of3 Judge Bench in Jagat iit Suzar Mills case lpra9has t o be followed becauset hat decision is by a largerBench t han t he one decidingt he Govind Sugar Millss case supra9The 3 JudgeBench decision is also under t he PGST Act 1948which is t o t he Therefore in Vlew t hereis no possibilit ywhat soevert o reopen t he quest ionbyopining t hat t he of Sect ion 4 of t he PGST Act 1948 would not apply and t hose of 1953 Act alone would applyOn t he basis of t he aforesaid prem iset he writ pet it ions are liable t o be dism issed On account of t he bindingprecedentavailable in t he form of of Jagat iitSugarMills case supralwe are not dealingwit h any oft he cont ent ionsraisedbyt he which could havebeenot herwise exam inedin t helightoft he observat ionsm adein Govind SugarMills case As a sequelt o t he above discussion all t he writ pet it ions fail andt hesam e are dism issed A copy oft his order be lolacedon t hefile of connect edcases m t X 0 Z 2 r c8 Z Ll 7 9 6MMCum arl Judge 1 Judge aeeese4e161eeeee6eeeee4eeeeeeeeeeeeeee4e41eeeeeeeeeee4eeeeene6eeeeee44eeeeeeeeeaeena of2005 Mls The Bat ala CoopSugarMiUs Lt d v St at e of2006 PicadilySugarand Allied I ndust ries V St at eof JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 2O el2010 W CWPNo20300 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh of Punj aband ot hers CWP No998 Punj aband ot hers 409 QWPNo 9019of2005 12 and ot hers CWP NoA198of2003 andot hers CWP No16892of2001 andot hers CWPNo 16893of2001 andot hers CWPNo 16894 of2001 and ot hers CWPNo 16895of2001 at ldot hers CWP No 16896of 2001 andot hers CWP No16897of2001 and ot hers CWP No16898of2001 and ot hers CWP No16899of2001 and ot hers CWP No16900of2001 and ot hers CWPNo129170f2001 and ot hers CWPNo 12918of 2001 and ot hers CWP No12919of2001 and ot hers CWPNo 1683 of 2004 SugarMills V SugarMills V St at eofPunj ab SugarMills Ve St at eofPunj ab SugarMills V St at eofPunj ab SugarMills V St at eofPunj ab SugarMills V St at eofPunj ab SugarMills Ve St at eof Punj ab SugarMills V St at eofPunj ab SugarMills Ve St at eofPunj ab SugarMills V St at eofPunj ab SugarMills V St at eofPunj ab SugarMills V St at eofPunj ab SugarMills V St at eofPunj ab SugarMills Ve St at eofPunj ab and ot hers CWPN0 9612of2008 Mls A3SugarsLt d ot hers CWP v St at eofPunj aband No641 of2008 Mls I ndian Surcrose Lt d v St at eofPunj aband ot hers CWPNo684 ot hers of2008 Mls I ndianSucroseLt d v St at eofPunj aband 1 U I t Z C4 I c8 Q Z s CWP No17878of2008 Mls A3SugarsLt d v St at eofPunj aband ot hers I ndian SucroseLt d v St at eofPunj aband CWPNol7945 of2008 Ms ot hers CWPNo 1578 of2003 Mls Nakodar St at eofPunj abandot hers CWPNo15324 of2003 Mls Wahid SandharSugarMills Punj aband ot hers SugarMills Lt d V S 0 0 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh V St at eof JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document