- (1.) THE petitioner, M/s. Troks Pharmaceuticals Private Ltd. , Bahadurgarh (for short the company), has filed these two Civil Writ Petitions No. 4500 of 1981, Troks Pharmaceuticals Private Ltd. , Bahadurgarh v. Excise and Taxation Officer, Bahadurgarh, and Others and No. 1986 of 1982, Troks Pharmaceuticals Private Ltd. , Bahadurgarh v. Excise and Taxation Officer, Bahadurgarh, and Others. As a matter of fact, the same question of law is involved in both these petitions. The facts are exactly similar. The respondents are common. The annexures are also common. For these reasons, both these petitions shall be decided by one judgment recorded in C. W. P. 1986 of 1982.
(2.) THE company is engaged in the business of manufacturing and selling drugs/ medicines, etc. The petitioner-company made sales to various Health Departments of different State Governments which they had ordered for the supply to various hospitals established under the Employees State Insurance Scheme. The sales to the State Governments are chargeable at four per cent of taxation under Section 8 (1) of the Central Sales Tax Act, 1956 (Act No. 74 of 1956) (briefly the Act ). Prior to the amendment effected in the year 1975, the rate of tax on such sales was three per cent. For the sales of medicines to various State Governments in the country by the company, it was assessed to sales tax at three per cent in the year 1974-75 by the Assessing Authority, Faridabad, by order, copy of which is annexure P-5 (A ). For the assessment year 1975-76. the same authority assessed similar sales by the company at the rate of four per cent, vide orders dated 17th March, 1978, copy of which is annexure P-5 (B ). For the assessment year 1976-77, the company was again assessed by the same authority for similar sales at the rate of four per cent, vide orders dated 9th May, 1978, copy of which is exhibit P-5 (C ). The Deputy Excise and Taxation Commissioner (Appeals), Rohtak (Haryana), suo motu took action to revise the rate of tax on the sales for the assessment years 1974-75, 1975-76 and 1976-77. He was of the view that these sales were not to any Government department, but to the Employees State Insurance Corporation (briefly the Corporation) and were thus chargeable at the rate of ten per cent of tax. He issued notice to the Company, copy of which is annexure P-6 to the petition. The petitioner-company submitted the reply. The company produced various certificates issued by the medical authorities of the Corporations of various States to the effect that the purchases were made by the Corporation as a department of the State Government. The Excise and Taxation Commissioner made enquiries and came to the conclusion that the Corporation was not a department of the Government. Vide order dated 1st August, 1980, copy of which is annexure P-8, the Deputy Excise and Taxation Commissioner, after enquiry, notice and hearing the company, came to the conclusion that the sales were not made by it in favour of the department of the Government, but to the Corporation and hence, was liable to sales tax at the rate of ten per cent and not at four per cent under Section 8 (1) of the Act, as found by the assessing authority. The assessing authority was directed to realise the tax and issue demand notices on the additional demands created as a result of the revisional proceedings.
(3.) VIDE annexure P-13 (A) dated 7th July, 1981 (in C. W. P. No. 4500 of 1981), the Assessing Authority, Bahadurgarh, assessed the company at the rate of ten per cent of these sales during the assessment year 1977-78 and issued demand notice, copy of which is exhibit P-13 (B) on 17th July, 1981. Notice of recovery, copy of which is annexure P-l to this petition, dated 10th September, 1981, for the recovery of Rs. 89,300 as sales tax for the year 1977-78 was issued. Notice of assessment and demand dated 21st September, 1981, copy of which is annexure P-2 was also issued.;