GSTR No. 4 of 1998 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH GSTR No. 4 of 1998 Date of Decision: 7.7.2010 M/s Shergill Rice Mills ....Petitioner. Versus State of Punjab ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Piyush Kant Jain, Additional Advocate General, Punjab. ADARSH KUMAR GOEL, J. 1. This order shall dispose of GSTR Nos. 4, 14, 15 and 22 of 1998 as common questions of law are involved. Reference is made to facts of GSTR No. 4 of 1998. 2. In GSTR No. 4 of 1998, following questions of law have been referred for opinion of this Court under Section 22 of the Punjab General Sales Tax Act, 1948 (in short “the Act”):- “1. Whether in the facts and circumstances of the case the bardana purchased on behalf of Food Corporation of India and used in packing the rice shelled belonging to the Food Corporation of India is liable to tax under Section 4-B of the Act? GSTR No. 4 of 1998 -2- 2. Whether in the facts and circumstances of the case machinery, rubber rolls, sutli etc. used in doing the job work of Food Corporation of India is liable to the tax under section 4-B of the Act in view of Supreme Court judgment reported as 69-STC-320?” 3. The assessee is a dealer registered under the provisions of the Act and during the assessment under the Act, question for consideration was whether bardana purchased on the strength of Registration Certificate after furnishing ST-XXII forms and not used in the process of manufacturing could be taxed or not under Section 4-B of the Act and whether price of the said goods could be included in turnover when sale thereof was only incidental to sale of goods contained in the packings. The similar question arose in respect of other items like machinery, rubber rolls, sutli etc. used for job work of Food Corporation of India. 4. The Assessing Officer held that since the goods in question purchased by the assessee on the strength of Registration Certificate were consumed by it without any further sale, the same were liable to tax under Section 4-B of the Act. It was also held that the goods in question had to be included in the taxable turnover. This decision has been upheld by the Tribunal in the following terms:- “I have considered the arguments of both the sides and seen the record of the case. Only question involved in this case is taxing of turnover of Rs.4,20,625/- under section 4-B of the Punjab Act. GSTR No. 4 of 1998 -3- Out of this, so many points arise, they are being considered discussed and adjudicated here. Firstly, whether goods purchased on the strength of Registration Certificate after furnishing ST-XXII forms and not used in the process of manufacturing should be taxed or not under section 4-B. In this case, the position is very clear and there is a considerable force in the arguments of the State counsel. There is no dispute that the goods subject to tax under section 4-B were purchased on the strength of Registration Certificate and were not used for the purpose for which purchased. Secondly, the plea of the counsel regarding machinery being used as a capital asset and not as trade asset has no force. The price of machinery which has been taken into consideration for levying tax under section 4-B is the purchase value of rubber rolls made after furnishing ST-XXII forms i.e. on the strength of Registration Certificate. As such any amount spent on consumable machinery by making purchase on the furnishing of ST-XXII forms and consumed in job work is taxable under section 4-B and certainly it is a matter of trade asset and not of capital asset. Thirdly Bardana has been claimed to have been purchased and supplied by Food Corporation of GSTR No. 4 of 1998 -4- India. This is not correct. This may have been purchased on behalf of Food Corporation of India, but there is no supply by Food Corporation of India as per record. As such purchase of bardana and certificate of Food Corporation of India has no force. Fourthly the appellant argued that he has done job work and self work. Accordingly all purchases of machinery etc. bardana, Sutli and rubber rolls should have been considered proportionately for job work. In this case the order of Assessing Authority is very clear, who has taken the proportionate value of the above items for job work where required in the ratio of 60 to 40. As such the orders of lower authorities are very fair and need no interference. Keeping in view all these facts, I do not find any merit and dismiss the appeal on all counts.” 5. We have heard the learned counsel for the State. 6. Learned counsel for the State placed reliance on the judgment of this Court in GSTR No.14 of 1990 (M/s Food Corporation of India, Ferozepur v. State of Punjab) decided on 19.3.2009, wherein one of the questions was whether bardana supplied by the Food Corporation of India along with foodgrains could be subjected to tax. Relying upon the judgment of the Hon'ble Supreme Court in Food Corporation of India v. State of Kerala [1997] 105 STC 4 and Co- operative Company Limited v. Commissioner of Trade Tax, [2007] 4 SCC 480, it was held that packing material was liable to be included in GSTR No. 4 of 1998 -5- the taxable turnover. 7. The above view, according to the learned counsel for the State, covers the matter in favour of the revenue. 8. Since no one appears on behalf of the assessee, we do not consider it appropriate to finally adjudicate the questions referred and return the same unanswered. (ADARSH KUMAR GOEL) JUDGE July 7, 2010 (AJAY KUMAR MITTAL) gbs JUDGE GSTR No. 4 of 1998 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH GSTR No. 14 of 1998 Date of Decision: 7.7.2010 M/s Shergill Rice Mills ....Petitioner. Versus State of Punjab ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Piyush Kant Jain, Additional Advocate General, Punjab. ADARSH KUMAR GOEL, J. For orders, see GSTR No. 4 of 1998 (M/s Shergill Rice Mills v. State of Punjab). (ADARSH KUMAR GOEL) JUDGE July 7, 2010 (AJAY KUMAR MITTAL) gbs JUDGE GSTR No. 4 of 1998 -7- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH GSTR No. 15 of 1998 Date of Decision: 7.7.2010 M/s Shergill Rice Mills ....Petitioner. Versus State of Punjab ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Piyush Kant Jain, Additional Advocate General, Punjab. ADARSH KUMAR GOEL, J. For orders, see GSTR No. 4 of 1998 (M/s Shergill Rice Mills v. State of Punjab). (ADARSH KUMAR GOEL) JUDGE July 7, 2010 (AJAY KUMAR MITTAL) gbs JUDGE GSTR No. 4 of 1998 -8- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH GSTR No. 22 of 1998 Date of Decision: 7.7.2010 M/s Shergill Rice Mills ....Petitioner. Versus State of Punjab ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Piyush Kant Jain, Additional Advocate General, Punjab. ADARSH KUMAR GOEL, J. For orders, see GSTR No. 4 of 1998 (M/s Shergill Rice Mills v. State of Punjab). (ADARSH KUMAR GOEL) JUDGE July 7, 2010 (AJAY KUMAR MITTAL) gbs JUDGE