Kitply Industries Limited vs State of Punjab and Others

The petitioner, who is registered dealer under the provisions of the Punjab General Sales Tax Act, 1948, inter alia, was dealing in plywood during the assessment year in question. The plywood was taxable at the last stage of sale.

On March 12, 1993, a notification was issued by the State Government making plywood taxable at first stage of sale with immediate effect. Subsequently, the said notification was superseded by notification dated May, 10 1993 to the effect that taxability of plywood at first stage of sale will be applicable with effect from July 1, 1993. The dispute arose with regard to the period from March 12, 1993 to May 9, 1993. During that period, the petitioner collected and paid tax at the first stage of sale, which was not liable to be paid in view of subsequent notification.

At the time of assessment for the year in question the claim of the petitioner regarding taxability of sale of plywood at last stage of sale was accepted for the period up to June 30, 1993 in view of notification dated May 10, 1993, however, the revisional authority took a different view and held that even if the notification dated March 12,1993 was superseded vide notification dated May 10, 1993 which subsequently mentioned that the plywood would be taxable at the first stage with effect from July 1, 1993, still for the period even prior to that, notification dated March 12, 1993 will remain operative and sale of plywood for the period between March 12, 1993 to May 9,1993 is also to be treated as taxable at first stage of sale and accordingly created demand against the petitioner. In appeal filed against the order of revisional authority before the Tribunal, the petitioner failed. Even rectification application was also rejected by the Tribunal.

At the time of hearing, learned Additional Advocate-General appearing for the State fairly stated that the interpretation so given by the authorities to the notification dated May 10, 1993 was not correct as the plywood became taxable at first stage of sale only with effect from July 1, 1993. However, he submitted that since the petitioner had already collected the tax during the period from April 1,1993 to May 9,1993 at first stage of sale of plywood, the petitioner is not entitled to retain the same on account of principles of unjust enrichment as per law laid down by the honourable Supreme Court of India in Mafatlal Industries Ltd. and Others Vs. Union of India (UOI) and Others, .

Even though a specific issue was raised by the petitioner on this account in its appeal before the Tribunal but still no finding had been recorded thereon. In the circumstances, we deem it appropriate to set aside the order passed by the Tribunal and remand the matter back to the Tribunal, to consider and decide this issue after affording due opportunity of hearing to the petitioner.

The petitioner will appear before the Tribunal on June 26, 2006.

Entitlement of refund of any amount, already paid by the petitioner, will be as per the decision taken by the Tribunal.

The writ petition is disposed of in the above terms.