LPA No.227 of 2010(O & M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ***** LPA No.227 of 2010 (O & M) Date of decision : 15.7.2010 M/s Mahavir Parsad Lakhmi Chand .....Petitioner Vs. The State of Haryana and others .....Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Ashok Aggarwal, Senior Advocate, with Mr.Sandeep Goyal, Advocate, for the appellant Ms. Ritu Bahri, Senior DAG, Haryana --- ADARSH KUMAR GOEL (J):- 1. This order will dispose of LPA Nos. 227 to 232, 238 to 242, 177, 95, 100, 339, 178 to 185 & 470 of 2010, filed by the appellants, as learned counsel for the parties state that common question of law is involved in all these appeals. 2. The facts are being taken from LPA No.227 of 2010. This appeal has been preferred against the orders of the learned Single Judge, dismissing the writ petition of the appellant, seeking quashing of order of the Tribunal dated 19.1.2006, under the provisions of Haryana General Sales Tax Act, 1973 (in short, 'the Act'), Annexure P-3, upholding levy of purchase tax on the paddy. 3. The appellant is a registered dealer and during the LPA No.227 of 2010(O & M) -2- Assessment Year 2000-01, he purchased paddy from the State of Haryana and sold the same to a dealer at Gaziabad in UP. The Gaziabad dealer milled paddy and exported the rice. Case of the appellant was that the turnover of purchase was liable to be excluded from the taxable turnover under Section 27. This plea was not accepted and the purchase was held to be subject to tax, which was upheld by the Appellate Authority and the order of the Tribunal against which the appellants filed writ petition. 4. Contention was reiterated in the writ petition that even though the petitioner may be covered by the charging section i.e. Section 6, in respect of turnover of purchase in the State at the stage mentioned in Section 17, the said turnover was liable to be excluded from the taxable turnover under Section 27(1)(b)(A)(ii). Respondent- State contested the stand of the appellant by submitting that charging section i.e. Section 6 was attracted and exclusion provision of Section 27 could not be applied to the turnover of purchase. 5. Learned Single Judge rejected the contention raised on behalf of the appellants. 6. We have heard learned counsel for the parties and perused the record. 7. Learned counsel for the appellant submitted that Section 27 of the Act clearly contemplates exclusion of turnover on account of purchase from the taxable turnover to the extent of inter State sale and contrary view could not be sustained. 8. Learned counsel for the Revenue supported the view taken in the impugned orders and submitted that benefit of turnover of inter LPA No.227 of 2010(O & M) -3- State sale having been already taken under the Central Act, exclusion of turnover of purchase from the taxable turnover, was not permissible and literal interpretation of Section 27 to that effect will result in absurdity and should be avoided. The assessee could not get double benefit of exclusion of purchase turnover as well as exclusion of sale turnover. 9. The question for consideration, thus, is whether purchase turnover of the assessee is liable to be excluded to the extent of inter State sale under Section 27 or the said benefit could be denied on the ground that inter State sale was not taxable ? 10. In our view, answer has to be in favour of assessee on plain interpretation of Section 27. There is no reason to ignore plain language of the statute. The purchase turnover has to be excluded from the taxable turnover if qualifications laid down in the section are fulfilled one of which is inter State sale. There is no question of double benefit as sought to be projected on behalf of the Revenue. 11. Before proceeding further, it may be necessary to observe that under the State Law what is taxable is the turnover of sale or purchase in the State and turnover of sale or purchase in the course of inter State sale or in the course of export is outside the purview of the taxable turnover under the State law. In the present case, sale to Gaziabad dealer, being inter State sale was outside the purview of the turnover. Only intra State sale was within the purview of the State law but the said turnover though taxable under Section 6 stands excluded under Section 27. The goods in question being paddy, are 'declared goods' under Section 2(d) of the Act read with Section 2 (c) LPA No.227 of 2010(O & M) -4- of the Central Sales Tax Act, 1956 and the stage of taxability specified in Section 17 read with Schedule D, is the last purchase within the State. 12. With a view to appreciate the issue, it would be necessary to make a reference to the provisions of Section 6 and 27 of the Act, which are reproduced below; “Section 6 : (1) Subject to other provisions of this Act, every dealer whose gross turnover during the year immediately preceding the 27th day of May, 1971 and every other dealer shall on the expiry of thirty days after the date on which his gross turnover first exceeds the taxable quantum, be liable to pay tax under this Act on the sale or purchase of goods by him in the State at the stage hereinafter provided. (a) on declared goods at the stage specified under Section 17; (b) on goods notified under Section 18 at the stage of first sale as specified under that section; (c) on all other goods at the stage of (i)last sale when the goods are sold to any person other than a registered dealer who furnishes declaration as specified under Section 27 or as notified under Section 13 or as prescribed under Section 13 B of this Act. (ii)Last purchase in all other cases except when the purchase is made on payment of tax. Section 27: Taxable Turnover: (1) In this Act, the expression, “taxable turnover” LPA No.227 of 2010(O & M) -5- means that part of a dealer's gross turnover during any period which remains after deducting therefrom his turnover during that period. (a) xxxxx xxxxx xxxxx (b) on account of purchase of goods which are specified in Schedule C or D and are liable to tax at the stage of last purchase as specified in Schedule C or Schedule D or the first proviso to Section 17- (A) which are sold during the year (i)to a registered dealer other than a registered dealer with whom composition under Section 26 has been made and is in force. Provided that in the case of sale to a registered dealer, a declaration as referred to in {the second proviso to sub clause (ii) of clause (a) of sub sectin (1) of this Section} given to him by the dealer to whom the goods are sold, is furnished by the dealer in the manner prescribed; (ii) in the course of inter State trade or commerce within the meaning of Section 3 of the Central Sales Tax Act, 1956. (iii) in the course of export out of the territory of India within the meaning of sub section (1) of Section 5 of the Central Sales Tax Act, 1956. (iv) to a dealer who is exempted under Section 13 of this Act. (B) xxxxx xxxxx xxxxx 13. Since it is not disputed that the turnover in question is covered by taxable turnover under Section 6, only question to be considered is whether the same is excluded under Section 27. The mandate of Section 27 is “to exclude turnover” on account of purchase of goods specified in Schedule D liable to tax at the stage of last purchase and sold in the course of inter State trade. 14. Contention on behalf of the revenue that benefit under the LPA No.227 of 2010(O & M) -6- Central Act have already been taken in respect of inter State sale or on account of export by the purchasing dealer, Section 27 will not be attracted, is not born out by the provision or by any principle of interpretation or by any case law. On the contrary, the turnover of inter State sale being outside the purview of the State law, only relevant taxable turnover is the turnover of purchase which is liable to be excluded to the extent of sale in the course of inter State trade. 15. The above being the position, we are unable to sustain the impugned orders. The appeals are accordingly allowed. 16. A photocopy of this order be placed on each file of the connected case. (ADARSH KUMAR GOEL) JUDGE 15th July, 2010 (AJAY KUMAR MITTAL ) akm JUDGE