IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 10364 of 1999 DATE OF DECISION: May 18, 2009 M/s Mohit Cotton & Oil Pvt. Ltd. …Petitioner Versus State of Haryana and others …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE H.S. BHALLA Present: Mr. R.P. Sawhney, Senior Advocate, with Mr. Avneesh Jhingan, Advocate, for the petitioner(s). Ms. Ritu Bahri, DAG, Haryana, for the respondents. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of C.W.P. Nos. 10364 of 1999, 8468 and 10811 of 2002 as common question of law and facts are involved in these petitions. Challenge in these petitions is to various orders passed by the Sales Tax Tribunal Haryana (for brevity, ‘the Tribunal’) holding that sales made by the petitioners to the registered dealers has to be taken into account for computing notional sales tax C.W.P. No. 10364 of 1999 liability to be adjusted against the exemption granted. The petitioners have claimed that notional tax liability is required to be determined after allowing deduction in respect of sales to registered dealers. The matter is no longer res integra. Very recently, a similar controversy involving the basic issue whether sales to registered dealers are includable in notional tax liability of a unit as defined in Rule 28A(2)(n) of the Haryana General Sales Tax Rules, 1975 (for brevity, ‘the Rules’) came up for our consideration in the case of M/s Jai Durga Cotton Mills, Hissar v. State of Haryana and others (C.W.P. No. 14020 of 2005, decided on 8.5.2009). After dealing with the issue in detail in the light of the judgment of Hon’ble the Supreme Court rendered in the case of State of Haryana v. M/s Liberty Enterprises, (Civil Appeal No. 1618 of 2009, decided on 17.3.2009) , we came to the following conclusion:- “ After hearing learned counsel for the parties and perusing the paper book with their assistance, we have reached the conclusion that this petition is squarely covered by the judgment of Hon’ble the Supreme Court rendered in M/s Liberty Enterprises case (supra). The provisions of Rule 28A(2)(n) defines ‘notional sales tax liability’ the amount of tax payable on the sales of finished products of the eligible industrial unit under the Local Sales Tax Law but for on exemption computed at the maximum rates specified under the Local Sales Tax Law. According to clause (ii) of Rule 28A(2)(n) amount 2 C.W.P. No. 10364 of 1999 of tax payable under the CST Act on the sales of finished products of the eligible industrial unit made in the course of inter-state trade or commerce are also eligible. Section 27(a) of the Act provides for deducting from ‘gross turnover’ that part of sale and purchase of goods falling under Section 12 of the Act and also sales to registered dealers. In M/s Liberty Enterprises case (supra), Hon’ble the Supreme Court considered sale and purchase of goods falling under Section 12 of the Act i.e. export sales whereas in the present case we are concerned with sales made to registered dealer. Therefore, we find that the matter is covered in favour of the dealer-petitioner and against the revenue. Accordingly, we hold that sales made to registered dealers were not includible in the matter of calculation of ‘notional tax liability’ during the period in question. For the aforestated reasons this petition succeeds. The order dated 19.12.2001 (P-9) and order dated 26.5.2005 (P-11) passed by the Tribunal are set aside and direction is issued to the respondents to deduct the sales made to the registered dealers while working out taxable turnover. Accordingly the same would also not be included in ‘notional tax liability’. We find that the principles of law enunciated by Hon’ble the Supreme Court in the case of M/s Liberty Enterprises case (supra) 3 C.W.P. No. 10364 of 1999 and in our judgment dated 8.5.2009 passed in the case of M/s Jai Durga Cotton Mills, Hissar (supra) are fully applicable to the facts of these petitions. Accordingly, by following the same principles and precedent, these petitions succeed. Orders passed by the Tribunal, which have been impugned in these petitions, are hereby set aside and direction is issued to the respondents to deduct the sales made to the registered dealers while working out taxable turnover. Accordingly the same would also not be included in ‘notional tax liability’. These petition are disposed of in the above terms. (M.M. KUMAR) JUDGE (H.S. BHALLA) May 18, 2009 JUDGE Pkapoor 4