2008 (10) TMI 611 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of rule 29(xii) under the Punjab Value Added Tax Act, 2005 for deduction in turnover.
2. Rejection of deduction claim by the revisional authority.
3. Applicability of previous court judgments on the interpretation of the rule.
4. Dispute regarding the State's intention to file a review petition against the Supreme Court judgment.

Interpretation of rule 29(xii) for deduction in turnover:
The petitioner, a registered dealer, filed a petition under section 68 of the Punjab Value Added Tax Act, 2005 against the Sales Tax Tribunal's order. The issue arose when the revisional authority revised the assessment order for the year 1998-99 and demanded additional tax. The petitioner claimed deduction under rule 29(xii) for goods subject to tax under section 5(1A), including exempted goods. However, the revisional authority rejected this claim, stating that the deduction applied only when actual payment was made, not when purchasing from a tax-exempt unit.

Relevance of previous court judgments:
The petitioner relied on the judgment in Perfect Synthetics v. State of Punjab, affirmed by the Supreme Court in State of Punjab v. Perfect Synthetics. These judgments interpreted rule 29(xii) to allow deduction for goods subject to tax, even if exempted. The Supreme Court held that exempted goods were on par with taxed goods under the exemption scheme. The State did not dispute the applicability of these judgments but indicated its intention to file a review petition against the Supreme Court's decision.

Court's decision and reasoning:
The High Court, led by Justice Adarsh Kumar Goel, considered the delay, heard the arguments, and analyzed the situation. Despite the State's plan to seek a review, the Court emphasized that the Supreme Court's judgment was over seven months old and could not be disregarded. Therefore, the Court allowed the petition, set aside the impugned order of the Sales Tax Tribunal, and reinstated the assessing authority's order, granting the petitioner the deduction claimed under rule 29(xii).

This detailed analysis of the judgment showcases the interpretation of the law, the impact of previous judgments, and the Court's decision in light of the legal principles involved.