Kanahya Lal Krishan Baldev vs The Assessing Authority and Another

A.S. Bains, J.—The question involved in this petition under Articles 226 and 227 of the Constitution is whether the chillies and bardana (gunny bags), the sales whereof were taxed under the Punjab General Sales Tax Act and the Central Sales Tax Act are liable to tax or not ?

As regards the taxability of chillies, both the learned counsel for the parties agree that the matter is covered by the Supreme Court''s decision in Mangulu Sahu Ramahari Sahu Vs. The Sales Tax Officer, Ganjam, and a Division Bench decision of this Court reported as Tarsem Lal Sham Lal and Others Vs. The Assessing Authority and Others, wherein it is held that only the dry chillies can be taxed. From the assessment order dated 25th March, 1974, passed by the Assessing Authority, Patiala (respondent No. 1), it is not clear that the chillies were dry or green.

As regards the sale of bardana (gunny bags), the learned counsel for the parties also agree that the matter is covered by a judgment of this Court reported as Saddana Sugar Co., Ludhiana v. Assessing Authority, Ludhiana (see infra) 1976 RLR 109 '' wherein it was held that if the petitioner-company had really supplied the controlled sugar under the orders of a statutory authority to various retail dealers, the transaction could not be regarded as "sale" within the meaning of the Punjab General Sales Tax Act, 1948.

Both the counsel further state that the impugned order dated 25th March, 1974, be quashed and the case may be remanded to the Assessing Authority to make fresh assessment in the light of the authorities mentioned above. It is ordered accordingly and directed that the Assessing Authority shall reassess the sales keeping in view the principle of law as laid down in the aforesaid authorities. No costs.