GOODYEAR INDIA LTD Vs. STATE OF HARYANA:GEDORE TOOLS P LTD

JUDGEMENT

(1.) EXCEPT Civil Appeals Nos. 41620-63 of 1988, in these appeals along with the special leave petitions and the writ petition, we are concerned with Sections 9(1) and 24(3) as well as the penalty proceedings initiated under Section 50 of the Haryana General Sales Tax Act, 1974 (hereinafter referred to as 'the Act'). So far as Civil Appeals Nos. 4162-63 of the 1988 are concerned, these involve the scope, effect and validity of Section 13AA of the Bombay Sales Tax Act, 1959 (hereinafter referred to as 'the Bombay Act) as introduced by the Maharashtra Act No. XXVIII of 1982. It will, therefore, be desirable first to deal with the question of the Act, and then with the provisions of the Bombay Act as mentioned hereinbefore.

(2.) THE appellant/ petitioner - Goodyear India Ltd., was engaged at all relevant times, inter alia, in the manufacture and sale of automobile tyres and tubes. It manufactured the said tyres and tubes at its factory at Ballabhagarh in the district of Faridabad in the State of Haryana. For the said manufacturing activity the appellant had, from time to time to purchase various kinds of raw materials both within the State and outside the State. It is stated that about 7 to 10% of the total needs of raw materials on an all India basis were locally procured by the appellant from Haryana itself. THE raw materials purchased in Haryana were: (1) pigments (partly), (ii) chemicals (partly), (iii) wires (partly), (iv) carbon black (partly), (v) rubber (partly); and (vi) fabric (partly). THE rest of the requirements were imported from other States. THE appellant had its depots at different places in the State of Haryana as well as in other States. After manufacturing the said tyres and tubes, about 10 to 12% of the total manufactured products used to be sold in the State of Haryana either locally or in the course of inter-State trade and commerce or in the course of export outside the country and also sold locally against Declaration Form No. ST-15. It was stated that at the relevant time the local sales including sales in the course of inter-State trade and commerce and in the course of export from the State of Haryana was about 30 to 35%. THE appellant was a registered dealer both under the Haryana Act and the Central Sales Tax Act, and had been submitting its quaterly returns and paying the sales-tax in accordance with law, according to the appellant. In 1979, the assessing authority, Faridabad, imposed upon the appellant the purchase tax under Section 9 of the Act for the assessment year 1973-74 and subsequently for the years 1974-75 and 1975-76 as well on the despatches made by the appellant on the manufactured goods to its various depots outside the State. Subsequently, the, relevant revenue authorities sought to impose purchase tax under Section 9(1) of the Act and imposed purchase tax on despatches of manufactured goods, namely, tyres and tubes, to its various depots in other States. This led to the filing of various writ petitions in the Punjab and Haryana High Court by the appellant/ petitioner.

(3.) THE High Court, as stated before, referred to Section 9 and held that the expression 'disposes of was not basically a term of legal art and, therefore, it was proper and necessary to first turn to its ordinary meaning in order to determine whether a mere despatch of goods by a dealer to himself would cannot disposal of such goods by him. THE High Court referred to the dictionary meaning of 'disposes of ' in Webster's Third New International Dictionary. Reference was also made to 27 Corpus Juris Secundum, p. 345, and ultimately it came to the conclusion that the phrase 'disposes of' or 'disposal' cannot be possibly equated with the mere despatch of goods by a dealer to himself. After referring to the relevant provisions with which this Court was concerned in Kandaswami's case (AIR 1975 SC 1872) (supra), the High Court held that that case was no warrant for construing the expression 'despatch' as synonyous to 'disposal'. On the other hand, the court held that the decision of this court emphasises that the expression 'disposal' of goods is separate and distinct from despatch thereof. According to the High Court, the same position was applicable to Ganesh Prasad Dixit's case (AIR 1969 SC 1276) (supra), and in those circumstances held that the term 'disposes of' cannot be synonymous with 'disposal', and once that is held then the notification mentioned above travelled far beyond what is provided in Section 9 of the Act, while the said provision provided only for levy of purchase tax on disposal of manufactured goods.