- (1.) In compliance with the order dated August 17, 2005 passed by this court in STC Nos. 9, 10 and 11 of 2003, relating to assessment years 1989-90, 1990-91 and 1991-92, the Tribunal has referred the following questions of law for the opinion of this court: (1) Whether, in the facts and circumstances of the case, the Tribunal was correct in law in holding that purchase tax was leviable under section 4B of the Punjab General Sales Tax Act, 1948 on the consumables purchased on the strength of registration certificate and used in manufacturing of taxable and tax-free goods? (2) Whether the Tribunal was correct in law in holding that purchase tax was leviable on sugarcane under section 4(1) of the Punjab General Sales Tax Act, 1948? Briefly, the facts as narrated in the reference application may be noticed. The petitioner is a registered dealer under sales tax laws and is engaged in manufacturing and sale of sugar. It filed all the quarterly returns in time. Not satisfied with the returns, notice in form ST-XIV was issued to the petitioner by the Assessing Officer. After hearing the petitioner, the Assessing Officer framed assessment creating additional demands of Rs. 43,09,611, Rs. 1,06,89,637 and Rs. 1,23,51,885 for the years 1989-90, 1990-91 and 1991-92 vide orders dated December 27, 1995, July 9, 1996 and January 22, 1997, respectively. The Assessing Officer, inter alia, held that purchase tax was leviable on the sugarcane under section 4(1) of the Punjab General Sales Tax Act, 1948 (in short, "the Act"). Besides, it was also held that purchase tax under section 4B of the Act was imposable on the purchase of consumables used in the manufacture of the taxable and tax-free goods. Aggrieved by these orders, the petitioner filed three appeals before the DETC (A), Patiala Division, Patiala who after hearing both the parties remanded the cases to the Assessing Officer vide his separate orders dated December 30, 1997 and July 9, 1999. Feeling dissatisfied with these orders, the petitioner filed three appeals before the Sales Tax Tribunal. The Tribunal partly accepted the two appeals for the assessment years 1989-90 and 1990-91 vide its single order dated February 16, 2000 and dismissed the third one for the year 1991-92 vide its order dated May 20, 2003. Still not satisfied, the petitioner filed rectification applications for the years 1989-90 and 1990-91 which were dismissed by the Tribunal vide its order dated May 20, 2003. The State also filed one rectification application in Appeal Nos. 2 and 4 of 1998-99 pertaining to the assessment years 1989-90 and 1990-91 which was allowed to be withdrawn by the Tribunal vide its order dated May 20, 2003. Thereafter, the petitioner filed three reference applications for referring the above-mentioned questions of law to this court for its opinion.
(2.) The learned counsel for the petitioner submitted that the Tribunal was in error in holding that purchase tax was leviable under section 4B of the Act on the consumables which had been purchased by the dealer on the strength of registration certificate and were used in the manufacture of taxable and tax-free goods. Reliance was placed upon judgment of the apex court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Thomas Stephen & Co. Ltd., 1988 69 STC 320 . Referring to the second question, it was submitted that under section 4(1) of the Act, no purchase tax was leviable on the sugarcane. The decision of the Tribunal to the contrary was legally unsustainable.
(3.) The learned counsel for the State, on the other hand, while supporting the order passed by the Tribunal, canvassed that the purchase tax under section 4B of the Act was rightly imposed on the consumables which were transformed into end-product by using them in the manufacture of other goods. On the strength of the Division Bench judgment of this court in Indian Sucrose Ltd. v. State of Punjab, 2011 37 VST 85 , it was urged that on the purchase of sugarcane, the same was chargeable to purchase tax under section 4(1) of the Act.;