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2008 (8) TMI 812 - PUNJAB AND HARYANA HIGH COURTNotification No. S.O. 52/P. A. 8/2005/S. 8/2007 dated November 5, 2007 carrying out amendment in Schedule "A ", whereby entry "49" has been substituted and Notification No. S.O. 53/P. A. 8/2005/S.8/2007 dated November 5, 2007 (annexure P-2), whereby new entry "152" has been added in Schedule "B" to the Punjab Value Added Tax Act, 2005 challenged Held that:- The action on the part of the respondents in levying sales tax on sale of sugar imported from outside the State of Punjab except levy sugar is clearly violative of articles 301 and 304(a) of the Constitution of India. In fact, up to November 5, 2007 there was no discrimination as such in the levy of tax on the sugar manufactured in the State of Punjab or imported from outside the State of Punjab as single entry No. 49 existed in Schedule "A" to the VAT Act providing for tax-free goods. The levy of discriminatory tax came into force with the issuance of impugned notifications, whereby entry 49 in Schedule "A" was substituted, thereby providing for no tax on the sale of sugar manufactured in the State of Punjab and entry 152 was added in Schedule "B" providing for tax on the sale of sugar imported from outside the State of Punjab. From a plain reading of the two notifications, it is clearly made out that discriminatory tax was imposed on the imported sugar as against the sugar manufactured in the State of Punjab, which cannot stand scrutiny in the light of the provisions contained in articles 301 and 304(a) of the Constitution of India. Thus no hesitation in striking down Notification No. S.O. 53/P. A. 8/2005/S.8/2007 dated November 5, 2007 (annexure P-2) adding entry 152 in Schedule "B" to the VAT Act, whereby tax is sought to be levied on sale of sugar imported from outside the State of Punjab. As a necessary consequence and to correct the mischief created with the issuance of Notification No. S.O. 52/P. A. 8/2005/S.8/2007 dated November 5, 2007 (annexure P-1), we further hold that the words "manufactured in the State of Punjab" used in entry 49 in Schedule "A" as substituted vide notification (annexure P-1), to be violative of articles 301 and 304(a) of the Constitution of India, as the same create discrimination in the levy of tax on the sale of sugar brought from outside the State as against manufactured within the State of Punjab.
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