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2015 (8) TMI 62 - PUNJAB & HARYANA HIGH COURT

2015 (8) TMI 62 - PUNJAB & HARYANA HIGH COURT - [2016] 92 VST 434 (P&H) - Levy of purchase tax - whether the petitioner-sugar mill was liable to pay the purchase tax on the sugarcane purchased by it from the growers - Held that:- The respondents therein contended that sugarcane was exempted from purchase tax inter-alia in view of section 4-B of the PGST Act. The Supreme Court noted the definitions in Section 2 of the PGST Act of the terms “dealer’, ‘goods’ ‘purchase’ ‘sale’ and ‘turnover’. The S .....

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of sugarcane and matters incidental thereto. - In Suganthi Suresh Kumar v. Jagdeeshan [2002 (1) TMI 1284 - Supreme Court of India], the Supreme Court held that the High Court cannot question the correctness of the decision of the Supreme Court even though the point raised before the High Court was not considered by the Supreme Court. In Director of Settlements A.P. and others v. M.R.Apparao and another [2002 (3) TMI 909 - SUPREME COURT], the Supreme Court held that the decision in a judgmen .....

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ld in effect result in this Court holding that the judgment of the Supreme Court in Jagatjit Sugar Mill’s case (1994 (10) TMI 259 - SUPREME COURT OF INDIA) is not good law. - Decided against assessee. - VATAP No. 176 of 2013 (O&M) - Dated:- 15-7-2015 - MR. S.J.VAZIFDAR AND MR. HARINDER SINGH SIDHU, JJ. For The Appellant : Mr. Sandeep Goyal, Advocate For The Respondent : Mr. Piyush Kant Jain, Additional Advocate General, Punjab S.J.VAZIFDAR A.C.J. This is an appeal under section 68 of the Punjab .....

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ified in ignoring the judgment of M/s Gobind Sugar Mills and following the judgment of M/s Jagatjit Sugar Mills case despite the fact that the issue and facts in Govind Sugar Mills case are almost identical to the issues and facts of the present case? ii) Whether in the facts and circumstances of the case, the appellant is liable to pay tax on the purchase of sugarcane under the provisions of Punjab General Sales Tax Act, 1948, when the Punjab Sugarcane (Regulation of Purchase & Supply) Act, .....

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y provisions which fall for consideration before us. 4. Mr. Sandeep Goel, the learned counsel appearing on behalf of the appellant, however, contends that the authorities ought not to have followed and that we ought not to follow this judgment, although it would normally be binding on us as the Supreme Court failed to consider an argument now raised before us and which, it is contended, is supported by another judgment of the Supreme Court in Gobind Sugar Mills Ltd. v. State of Bihar and others .....

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nter-alia in view of section 4-B of the PGST Act. The Supreme Court noted the definitions in Section 2 of the PGST Act of the terms dealer , goods purchase sale and turnover . The Supreme Court also noted Section 4 of the PGST Act which was the main charging section and section 5 which defines the expression taxable turnover . Sections 4 and 4-B of the PGST Act, which were also noted, in so far as they are relevant, read as under:- 4. Incidence of taxation. - (1) Subject to the provisions of sec .....

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ution of a contract which is shown to the satisfaction of the assessing authority to have been entered into before the commencement of this Act. "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 Union Territory of Chandigarh in the manufacture of goods specified in Schedule B, or ii. uses them within the Union Territory in the manufac .....

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e the Union Territory other than by the way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, and no tax is payable on the purchase of such goods under any other provision of this Act, there shall be levied a tax on the purchase of such goods at such rate not exceeding the rate specified under sub-section (1) of section 5 as the Central Government may direct". The question before the Supreme Court was whether the petitioner ther .....

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heir purchase by virtue of Section 4- B. The emphasis is upon the opening words of Section 4- B which reads: 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…. We find it difficult to agree. The said argument, in our opinion, is based upon an incorrect premise that purchase tax is levied by Section 4-B in the Act and not by any other provision. The said argument also ignores the fact that Section 4 levies t .....

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ction 4-B levy purchase tax on the purchase of goods in Schedule C. In our opinion, the purpose of Section 4-B is altogether different. It is designed really to identify and affirm - in a broad sense, create - the levy of purchase tax in some cases and to provide for exemption from purchase tax in certain other specified situations. This is done in the interest of manufacturers-dealers, consuming public and other dealers - a common feature in almost all the sales tax enactments, as we shall pres .....

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r (iv). 22. It is, therefore, idle to contend that Section 4-B imposes purchase tax or is the only provision imposing purchase tax. As analysed hereinbefore, it is mainly designed to affirm or exempt, as the case may be, the purchase of certain goods from purchase tax in certain specified situations. It, of course, does not deal with the goods specified in Schedule B. Its object is to ensure inter alia that purchase of raw material is not taxed where the sale of manufactured goods brings in tax .....

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he State, inter-State sale or export sale, as the case may be) then again the purchase of such goods is exempt from tax as explained and elaborated hereinabove. 23. If so, the question arises which is the provision which levies the purchase tax? The answer is - Section 4(1) itself. Section 4(1) not only levies tax on all sales but also levies tax on all purchases as well. Of course, in no case will both the sale point and purchase point of the same transaction be taxed, which feature is indicate .....

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from tax by virtue of Section 6 read with Schedule B. If so, the purchaser thereof is liable to pay tax on its purchase by virtue of Section 4(1). That is the position in the cases before us. Since Section 4-B does not apply to Schedule B goods, the said provision is not relevant to the petitioners. The purchase tax on sugarcane is levied by Section 4(1), since it being an agricultural produce, and said to be sold by growers themselves, is exempt from tax on its sale under Section 6. 6. Mr. Goe .....

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ng a special enactment for levying purchase tax exclusively on purchase of sugar overrides the Punjab General Sales Tax Act, 1948. He further contended that on a harmonious construction of the two Acts, the State can levy purchase tax on purchase of sugarcane only under the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953. In support of this contention, he relied upon the judgment of the Supreme Court in Gobind Sugar Mills Ltd. v. State of Bihar and others (supra). 7. The Supreme C .....

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s of commercial taxes which are generally leviable in the State of Bihar and that the object of the Sugarcane Act was to regulate the production, supply and distribution of sugarcane intended for use in sugar factories and for taxation of sugarcane and matters incidental thereto. Mr. Goel, relied upon paragraph 11 of the judgment which reads as under:- 11. The next contention on behalf of the State, as noted above, is that the two enactments operate in different fields inasmuch as while the Fina .....

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and the Council constituted under the Sugarcane Act. In this connection, it was contended that Section 3 of the Sugarcane Act contemplated establishment of the Sugarcane Board with specific power to fulfill the objects of the said Act. Therefore, the levy that was being collected as purchase tax under Section 49(1)(b) of the Act, being an exclusive levy for the purpose of the requirement of the Board, the same cannot be equated with the levy of purchase tax contemplated under Section 4 of the F .....

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t, in any manner, indicate that the entirety of this collection under sub-section (1)(b) of Section 49 is solely earmarked for the purpose of the expenditure of the Board or the Council. A perusal of Sections 6 and 9 of the Sugarcane Act clearly shows that the legislature has made separate provisions for the funds of the Board as well as the Council under the said Act, and only a portion of the collection under sub-section (1)(a) of Section 49 is earmarked for these purposes; hence, it is clear .....

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may have been possible for the appellant to rely upon this judgment to draw an analogy with the provisions of the enactments that fall for our consideration. However, the judgment in M/s Jagatjit Sugar Mills Co. Ltd. v. State of Punjab (supra) is directly on point. It dealt with the provisions of the very enactments that fall for our consideration. It cannot be disputed that absent anything else we are bound by the judgment. 9. Keeping the doctrine of precedent in mind we are not entitled to tak .....

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ther (2002)4 Supreme Court Cases 638, the Supreme Court held that the decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered by, or that relevant provisions were not brought to the notice of the Supreme Court. It was further observed that once the Supreme Court decides the principle it would be the duty of the High Court to follow the decision. 10. We, therefore, cannot take a view different from the one taken by the Supreme Court in .....

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Gobind Sugar Mills Ltd. v. State of Bihar (supra) different enactments fell for the consideration of the Supreme Court. 11. This is not even a case where the enactments considered in Gobind Sugar Mills Ltd. v. State of Bihar (supra) were identical to the Punjab General Sales Tax Act and the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953 or that there were no difference between the two enactments. Section 49(8) of the Sugarcane Act which fell for consideration in Gobind Sugar Mil .....

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, 1953 expressly state as under:- Statement of Objects and Reasons- With the promulgation of the Industries (Development and Regulation) Act, 1951, with effect from the 8th May, 1952, this regulation of sugarcane industry has become exclusively a Central subject. The State Government are now only concerned with the supply of sugarcane to sugar factories: moreover in view of lean financial position of the State, the State Government are not in a position to provide adequate funds for extensive Ca .....

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