GSTR 23 of 1999 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. GSTR No.23 of 1999 Date of decision 17 .3.2009 M/s Kisan Tractors, Faridabad ...Appellant Versus The State of Haryana ... Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE H.S. BHALLA Present: Mr. Sandeep Goyal ,Advocate for the appellant Mr.Sanjiv Kaushik, Addl. AG Hy. 1. Whether Reporters of local papers may be allowed to see the judgement ? 2. To be referred to the Reporter or not ? 3. Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The Sales Tax Tribunal, Haryana (for brevity 'the Tribunal') had dismissed the appeal of the dealer -assessee while deciding STA No. 285 of 1996-97 vide its order dated 3.12.1996 and the assessee- dealer had claimed that substantive questions of law would emerge from that order. Accordingly, the assessee-dealer filed an application under Section 42 of the Haryana General Sales Taxes Act,1973.(for brevity 'the Act'). The Tribunal vide its order dated 21.7.1999 has referred the following questions of law in case STM No. 62 of 1996-97 in respect of the assessee for the assessment year 1984-85: “i)Whether the Sales Tax Tribunal is justified to hold that rate GSTR 23 of 1999 2 of tax on imported parts and components of a tractor assembled in the country with more than 2/3rd indigenous parts, shall be liable to be taxed @ 8% on the basis of notification No. 50- 79/HA-20/75-S-15?81, dated 31.3.1981? ii)Whether on the facts and circumstances of the case, the commission amounting to Rs.2,11,800 received by the assessee is part of turnover under the provisions of Haryana General Sales Tax Act,1973 ? At hearing today only first question of law was pressed as counsel for the dealer- assessee has given up the second question of law. Accordingly we proceed to answer the aforesaid question. Brief facts of the case necessary for disposal of the aforesaid question are that dealer assessee was a sole proprietorship concern held through Sh. Harjeet Singh son of Kartar Singh. He started his business in September, 1984 on allotment of agency of tractors manufactured by ESPI Corporation. Unfortunately after about one and half months of the start of the agency, the then Prime Minister of the Country Smt. Indira Gandhi was assassinated due to which riots broke out in Delhi and its adjoining areas falling in Haryana. Shri Harjeet Singh who was the proprietor and a sikh was also become victim of a mob attack and he wass stated to have sustained serious injuries. He fled away from Faridabad and came to Patiala where he took refuge with his relatives. Registration certificate of the firm was applied on 14.9.1984 on the start of the business and the same was prepared by the office on 11.12.1984 after he had fled away from Faridabad to save his life. In the riots all his books of account and stock including the business premises were damaged. GSTR 23 of 1999 3 On 14.10.1987 the Assessing Authority issued a notice in form ST XXV but it could not be served because the business premises of the dealer were closed. The notice sent by registered post at Lakhmir Kheri address was also received back with the remarks that no such person was available. Then a notice was served on the surety thereafter. The surety had intimated to the department that the dealer was killed during riots. Accordingly, ex-parte assessment was framed vide order dated 24.12.1987. The petitioner came to know about the assessment and then filed an appeal before the Joint Excise and Taxation Commissioner (A), Faridabad who vide his order dated 10.2.1989 set aside the ex-parte order dated 24.12.1987 passed by the Assessing Authority and remanded the matter back for hearing the same on merits afresh after affording a reasonable opportunity of hearing to the dealer- assessee. The Assessing Authority vide order dated 16.10.1989 held that the dealer- asseessee had filed proof from M/s ESPI Industrial Corporation, Faridbad as well as the pamphlet concerning the tractors. He accordingly recorded the satisfaction that the tractors were manufactured in India and tax at the rate of 4% was chargeable which applies to the indigenous manufactured tractors. Accordingly assessment was framed and additional demand of Rs.3224/- was raised which stood paid by the assessee. The Deputy Excise and Taxation commissioner (I), however subsequently invoked revisional jurisdiction by initiation of suo motu proceedings and issued a notice to the dealer alleging that the rate of tax was 8.08% and certain commission received by him was also part of the turnover. Accordingly ex-parte assessment was framed on 30.7.1992 by charging tax @ 8.08% and interest from September 1984 to July 30, 1992. GSTR 23 of 1999 4 Accordingly demand of Rs. 1,03,223/- alongwith interest amounting to Rs. 1,43,448/- was raised against the dealer-assessee. The dealer- assessee challenged that order before the Tribunal and the Tribunal in its order dated 3.12.1996 has referred to the notification No. S0-79/HA-20/73/S-15/81 dated 31.3.1981 issued under Section 15 of the Act and held that indigenous parts of the tractor are excisable to sales tax @ 4% and imported parts/components were chargeable to sales tax @ 8%. The view of the Tribunal is discernible from paras 7,8 and 9 which reads thus: “ 7. In a situation as in current case it would sound quite logical if indigenous parts and components are subjected to sales sales tax @ 4% and imported parts and components are subjected to sales tax @ 8%. In my view the words “ Tractors imported from outside India (in their assembled or unassembled form)” would cover imported parts and components used in the manufacturer of tractors. Therefore, it will be quite logical if turnover pertaining to imported parts and components is subjected to sales tax @ 8% and the balance turnover is subjected to 4%. As far as imposition of interest is concerned, STC 94 relating to J.K.Synethetics case is quite clear that interest is to be levied on such amount as is not deposited but is due according to the returns. 8. The order dated 30.7.1992 of DETC-cum-Revisional Authority has gone beyond the aforesaid observations as there is no justification to impose interest in view of 94 STC 422 (J.K.Synthetics case). Similarly there is also no justification to impose sales tax @ 8.08% on the financial GSTR 23 of 1999 5 cost of the indigenous inputs. Only imported parts and components will be subjected to tax at 8.8% and indigenous parts and components and other indigenous inputs will be subject to tax at 4% under the entry on seated vide notification. 9. In view of my opinion expressed in the preceding paragraph the order dated 30.7.92 is set aside and the case is remanded to DETC, Faridabad (West) to make the assessment afresh in the light of the aforesaid observations. The appellant is directed to appear before the Deputy Excise and Taxation Commissioner (West), Faridabad on 16.12.1996 with relevant record and such evidence as he wishes to rely upon in support of his case. The Deputy Excise and Taxation Commissioner (West),Faridabad is directed to finalise the fresh assessment by 31st January,1997 positively. Appellant is also directed to cooperate with the DETC(West), Faridabad in the matter of assessment.” Having heard the learned counsel for the parties and perusing the paper book with their able assistance we are of the view that it would be necessary firstly to read the notification dated 31.3.1981. Relevant part of the same reads thus: “ The rate of tax on tractors manufactured in India shall be '(four paise in a rupee and the rate of tax on tractors imported from outside India in their assembled or unassembled form) shall be eight paisa in a rupee.” The aforesaid notification has been issued under Section 15 of the GSTR 23 of 1999 6 Act. A perusal of the extracted portion of the notification shows that the rate of tax on tractors manufactured in India has to be 4% whereas tax on tractors imported from outside India in their assembled or un-assembled form has to be 8%. There is no further classification whether component of tractors or part used in it, if imported from foreign country were to attract different rate of tax as has been opined by the Tribunal. If any component or a part of the tractor is imported from foreign country then it cannot be concluded that the tractor has not been manufactured in India. Therefore, to assess the tractor using the imported component separately and by bifurcating a tractor for the purpose of assessing sales tax, on the language of the statutory instrument cannot be regarded as lawful. It would be doing violence to the language of the statutory instrument if it is to be interpreted to mean that separate assessment in respect of imported and indigenous components could be made. It is conceded position that the tractor in question has been assembled with 2/3rd indigenous components. It is well settled interpretation of statute that charging section has to be construed according to the plain language used. It is only in case of any ambiguity in the language used that the Courts can step in to ascertain the true meaning of the provision which could be other than the one given in the provision. Therefore, we are of the view that the Tribunal has not correctly applied the entry in the notification dated 31.3.1981 to frame the assessment. Accordingly the first question pressed by the dealer assessee is liable to be answered in favour of the dealer- assessee and against the revenue. Regarding question No. (ii) This question has not been pressed by the counsel for the dealer- assessee and therefore the same is returned unanswered. GSTR 23 of 1999 7 As a sequel to the above discussion, question No. (i) is answered in favour of the dealer-assessee and against the revenue. (M.M.Kumar) Judge (H.S. Bhalla ) 17.3.2009 Judge okg