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TMI Blog2018 (7) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... al Goyal, learned senior counsel appearing for the petitioner submitted that the petitioner in the present case is running a rice shelling unit. He is duly registered dealer under the Punjab Value Added Tax Ordinance, 2005 (which was replaced by the Punjab Value Added Tax Act, 2005 (for short, 'the Act')). 5. On 10.10.2005, exemption certificate was issued in favour of the petitioner which entitled him exemption from payment of tax on the rice manufactured by him. The period of validity was from 30.10.1999 to 25.10.2009. The maximum amount of exemption from tax which the petitioner could claim was fixed as Rs. 67,65,000/-. The exemption certificate was issued in favour of the petitioner under the provisions of the Deferment and Exemption Rules, 1991 framed under the Punjab General Sales Tax Act, 1948, on the condition that the petitioner will export 25% of its production outside India. The petitioner complied with that obligation. In terms of the levy order issued by the government under the Essential Commodities Act, 1955, the petitioner was required to supply compulsorily 75% of the rice manufactured by him to the State or the Central Agencies at the rates fixed by them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax is liable to pay entire amount of tax. The Corporation did not have any jurisdiction to deduct tax from the bills on the transactions of sale of rice to the Corporation. There is no bar under the Act from collection of tax even by an exempted dealer from sale of its products. The issue as to whether dealer can retain the tax so collected or it may have to be paid to the State on the principle of unjust enrichment is a different issue. In any case, the Corporation cannot retain that amount. Reference was also made to judgment of Gujarat High Court in Subhash Iron & Steel Rolling Industries vs State of Gujarat 1982 (50) STC 305. 9. Learned counsel for the petitioner was fair enough to state that the price as fixed for purchase of levy rice by the Corporation is same even for the other dealers, who were not availing exemption from payment of tax. The amount of tax is not being paid in addition to the price so fixed even to those dealers. 10. Without prejudice to the submissions made above, it was further submitted that under any circumstances, the Corporation is liable to pay tax to the petitioner. It is a different matter that the same may be claimed by the Excise and Taxat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Heard learned counsel for the parties and perused the relevant referred record. 15. The undisputed facts on record in brief are that the petitioner is a unit engaged in manufacturing of rice. For the purpose, he purchased paddy. In terms of the provisions of the Deferment and Exemption Rules, 1991, the petitioner had been issued certificate entitling him exemption from payment of tax under the Act. Meaning thereby, he is not liable to pay any tax on his sales under the Act upto a specified limit. Levy rice is supplied to the State/ Central Government or its agencies at the price fixed by the Government of India. Undisputedly in terms of the levy order, the petitioner is required to compulsorily supply 75% of its production of rice to the State at the fixed price. Needful was done by the petitioner. Bills were raised. Payments were also made. However, while making the payments, the Corporation deducted a sum of Rs. 8,11,689/- for the season 2005-06, Rs. 5,25,313/- for the season 2006-07, and Rs. 3,73,253/- for the season 2007-08, from the bills so raised by the petitioner on account of the element of tax included therein. It was for the reason that the petitioner is exempted fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government the word, 'inclusive of all taxes' has been mentioned, the same will not mean that the tax is included therein, is totally misconceived. 18. As admittedly, the petitioner was holder of certificate entitling him exemption from payment of tax for the period in question, he is not entitled to charge tax on the sale and if any tax is collected by him, the same would be payable to the State on the principle of unjust enrichment. Any amount collected by a dealer as tax, if not leviable cannot be retained by him. 19. While making the payment of the amount of rice supplied by the petitioner to the Corporation, out of the bills so raised, while calculating the value as per the price fixed by the Government of India, the Corporation had deducted the element of tax on rice finding that the petitioner is an exempted unit, which is not liable to pay tax to the State. The fact cannot be denied that in case the petitioner being an exempted unit collects tax on sale, he shall not be entitled to retain the same as on the principle of unjust enrichment, the same may have to be deposited with the State. But here the claim made by the petitioner is that he is entitled to receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers (2010) 35 VST 576, where one of the issue considered by Hon'ble the Supreme Court was as under:- "The questions which fall for consideration in these appeals are mainly two-fold. The first issue that arises for our consideration is whether in the light of the facts and circumstances of the present case and upon a true and correct interpretation of construction of Note (i) to Schedule III under Clause 2(i) of the Haryana Rice Procurement Levy Order, 1985 (hereinafter referred to as "the Levy Order"), the appellants/dealers had collected purchase tax on paddy from the government or its agencies alongwith procurement price of levy fixed under the said Levy Order and if so, what would be the effect of such collection." 24. The note appended to the levy order fixing the price of rice therein, is extracted below:- "Note (i): The above prices of rice are for net rate of naked grains inclusive of purchase tax (emphasis added) and mandi charges of paddy and depreciation of gunny bags used for packing paddy but exclusive of cost of gunny bags and taxes, if any, after ex-mill stage of rice." 25. Hon'ble the Supreme Court while upholding the judgment of Division Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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