Asian Galven Towers Pvt. Ltd. vs State of Punjab and Others

G.C. Garg, J.—Petitioner, Asian Galven Towers Private Limited, has challenged the action of the respondents whereby its application for grant of sales tax exemption certificate was declined by order dated June 5, 1991, annexure P-6. The petitioner also challenged the orders dated January 22, 1991, annexures P-8 and P-9 passed by the sales tax authorities, imposing penalty. Certain other reliefs were also claimed. Petition was opposed by the respondents by filing written statement.

During the course of arguments, learned counsel for the petitioner placed on record a copy of the notification dated December 27, 1993. By the said notification, serial No. 43, in annexure II and the entry relating thereto, of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991, has been omitted with effect from the first day of April, 1989. It is thus, not considered necessary to notice in detail the facts or the contentions raised herein.

The Excise and Taxation Officer-cum-Assessing Authority, Ward No. 3, Faridkot, by order annexure P-5 recommended the case of the petitioner for exemption from payment of tax under the provisions of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991. The Assistant Excise and Taxation Commissioner, Faridkot, rejected the application of the petitioner for the grant of eligibility certificate primarily on the ground, rather on the only ground that the goods manufactured by the dealer did not qualify for exemption in view of item 43 of annexure II appended to the Rules ibid. This position has now ceased to exist in view of the notification referred to above. In the circumstances, order annexure P-6 has to be quashed. Order passed in appeal taken against order annexure P-6 has also to be quashed.

In the presence of the notification, the above position could not be disputed by the learned Assistant Advocate-General, Punjab. In the situation the aforesaid order annexure P-6 and the order passed in appeal taken against the order annexure P-6 are quashed, leaving it open to the Assistant Excise and Taxation Commissioner, Faridkot, to pass a fresh order according to law having regard to the recommendations contained in annexure P-5, the notification dated December 27, 1993 and/or any other Rules or instructions on the subject within four weeks after affording an opportunity of being heard to the petitioner, if need be. Necessary certificate shall be issued if the petitioner is found eligible for the same. The petitioner shall have a right to challenge the said order according to law in case it goes against him.

As a necessary consequence of the above, order of penalty u/s 10(6) of the Punjab General Sales Tax Act, 1948, annexure P-8 and the order passed in appeal which may have been taken against the order annexure P-8 have also to be quashed and the same are hereby quashed, leaving it open to the authorities to proceed afresh according to law after the passing of the order by the Assistant Excise and Taxation Commissioner as noticed in the foregoing paras.

Learned counsel for the petitioner submitted that order annexure P-9 passed u/s 9(2) of the Central Sales Tax Act, 1956, also deserves to be quashed. According to the learned counsel, the authorities may take imposition of penalty under the Central Sales Tax Act as a default under Rule 8 of the aforesaid Rules. This is indeed not so. Apparently, reference to the Act and the Rules made in Rule 8 of the Rules ibid is only confined to the Punjab General Sales Tax Act and the Rules framed thereunder, and not to the Central Sales Tax Act. Even otherwise, the "Act" has been defined in Clause (i) of Rule 2 of the Rules ibid to mean the Punjab General Sales Tax Act, 1948. The contention of the learned counsel is thus, unfounded. Appeal taken by the petitioner against the order, annexure P-9 was dismissed by the one word "dismissed". The matter is further pending before the Sales Tax Tribunal. Since the appeal was not disposed of on merits, the order passed in appeal is set aside with the direction to the appellate authority to re-admit the appeal and dispose of the same according to law by passing a speaking order and after affording an opportunity of being heard to the petitioner. The appeal pending before the Sales Tax Tribunal is consequently rendered infructuous and would be dismissed as such.

Resultantly, the writ petition is partly allowed. Orders annexures P-6 and P-8 as also the order passed in appeal against these two orders are quashed. -Appeal against the order, annexure P-9 shall be disposed of on its own merits according to law by the first appellate authority in the terms indicated above. The Assistant Excise and Taxation Commissioner, Faridkot, shall dispose of the request of the petitioner for grant of eligibility certificate within four weeks as indicated above. The parties are left to bear their own costs.