S. N. Variava, J. - (1.) These Appeals are against the judgment dated 31st August, 1998 of the Punjab and Haryana High Court.
(2.) Briefly stated the facts are as follows : The first Respondent is a Spinning Mill, which claimed benefit of Notification issued by the Punjab Government on 23rd November, 1979. As the decision in this case depends on the Notification it is reproduced herein for the sake of convenience:- "The 23rd November, 1979. No. S.O. 82/P.A. 46/48/S. 5/Amd./79. In exercise of the powers conferred by sub-section (1) of Section 5 of the Punjab General Sales Tax Act, 1948 (Punjab Act No. 46 of 1948) and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make the following further amendment in the Punjab Government Excise and Taxation Department Notification No. S.O. 26/P.A./46/S.5/72, dated the 10th August, 1972 namely: AMENDMENT In the said notification, after the proviso to item 4, the following further proviso shall be added, namely:- Provided further that the rate of purchase tax on cotton shall be two paise in a rupee on the purchases made by the textile mills established on or after the first December, 1979 for a period of five years to be reckoned from the aforesaid date subject to the following conditions: (i) that these mills shall start production by 31st December, 1981; and (ii) that these mills shall not despatch yarn in the course of inter-State transaction on consignment basis or through ex-State commission agents."
(3.) Initially, the Assessing Authority granted to the Respondents concessional rate of tax as per the said Notification. However, the Joint Excise and Taxation Commissioner invoked his suo motu powers under Section 21 of the Punjab General Sales Tax Act, 1948 on the ground that the Mill was not established prior to 1st December, 1979 and that the Respondents had been transferring yarn outside the State. After considering the reply of the Respondents, the Assessing Authority held that the Respondents were not entitled to the benefit of the Notification. They, therefore, asked the Respondent to pay the differential rate of duty and penalty.;