- (1.) This petition seeks quashing of Section 2(gg) and 2(j) read with note 4 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the Act") as amended.
(2.) Case of the Petitioner is that it took some machinery on lease at Delhi which was treated as part of turn over on the ground that the said machinery was in the State of Haryana at time of its use and thus could be subjected to tax in the State of Haryana under Section 2(j)(iv) read with note 4 of the Act. The finding recorded by the revisional authority to this effect is as under: Regarding illegality mentioned at Serial No. 2 the dealer/counsel has submitted that the leased machinery were taken on hire from a company outside the State of Haryana and the transactions being interstate could not be taken as the purchases made in the State of Haryana. There is no force in the contention of the dealer in this regard because since the right to use of the machinery has been transferred only when these machineries were acquired by the lessee (dealer) in the State of Haryana hence the purchases on account of hiring the machinery could not at all be said to be covered under Section 3 of the CST Act, 1956. Reliance is placed on the ruling of Hon'ble Supreme Court of India dated 17.11.92 in the case of M/s Gannon Dunkerley & Co. and Ors. v. the State of Rajasthan. Thus the lease rents paid on the machinery which were used in the State of Haryana are the purchases made in the State of Haryana in the light of the provisions of Section 2(j)(iv) read with note No. 4 of the HGST Act, 1973.
(3.) Aggrieved by the above, Petitioner filed this writ petition challenging the validity of Section 2(j) (iv) read with note 4 of the Act. The said provision is as under: Section 2(j) "Purchase" with all its grammatical or cognate expressions means the acquisition of goods for cash or deferred payment of other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge and includes: (i) xx xx xx (ii) xx xx xx (iii) xx xx xx (iv) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or otherwise valuable consideration." (v) xx xx xx Note1 xx xx xx Note2 xx xx xx Note3 xx xx xx Note 4 A purchase falling under Sub-clause (iv) shall be deemed to have taken place within the State if the goods in respect of which right to use has been transferred are within the State at the time of their use.;