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Judgment
Ritu Bahri, J.—Petitioner is seeking a writ in the nature of certiorari for amending/quashing of the order dated 18.07.2008 (Annexure P-5) passed by the Director Agriculture-cum Cane Commissioner-respondent No. 2, whereby part claim of the petitioner has been allowed amounting to Rs. 47,27,452.83. Petitioner has further sought a direction to the respondents to refund the amount of Rs. 1,55,86,119/- out of the total claim amounting to Rs. 2,03,14,572/-.
The petitioner-company is manufacturing white crystal sugar for the general public and also exporting the same to the other countries. The purchase and supply of sugarcane is regulated by the Punjab Sugarcane (Regulation of Purchase & Supply) Act, 1953 (for short ''the Act''). As per Section 17 of the Act, tax is imposed on the purchase of sugarcane by or on behalf of sugar factory in consultation with the Sugarcane Control Board. As per Section 17(A) of the Act, if the Government is satisfied that a factory has exported out of India any quantity of sugar manufactured by it, may refund to such factory, whether prospectively or retrospectively, the amount of tax imposed on and paid by it u/s 17 in respect of the cane purchased by it and utilized in manufacturing the quantity of sugar so exported. The petitioner exported huge quantity of sugar between 1990-91 to 2003-04. Purchase tax was paid by it as per Section 17 of the Act. Claim for refund of the purchase tax as per Section 17A of the Act was made to the respondents as per letter dated 13.01.2006 (Annexure P-1). Finally, vide letter dated 21.08.2008 (Annexure P-9), the Government decided to refund the cane purchase tax amounting to Rs. 47,28,452.83 for the period from 1990-91 to 1995-96. The petitioner was informed that refund of purchase tax from 1996-97 onwards cannot be granted as sugar export was de-canalized and Sugar Mills have directly exported sugar out of India.
On notice, reply has been filed by respondent Nos. 1 and 2. With reference to the provisions of Section 17A of the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953, it has been stated that it does not give any vested right to Sugar Mills to claim refund of cane purchase tax. It is open to the Government to allow refund of the cane purchase taxes prospectively or retrospectively. It has been further stated that it is not mandatory for the State Government to refund the purchase tax on account of sugarcane used for the production of sugar exported out of country, because on one side, the Sugar Mill gets foreign currency by exporting sugar and on the other side, it cause loss to the State exchequer for claim refund of tax. The refund of purchase tax had been rejected by the State Government from 1996-97 to 2003-04 with respect to other Sugar Mills also.
An affidavit dated 18.04.2012 was filed by the Additional Cane Commissioner, Haryana, stating that the Central Government, in exercise of powers conferred u/s 4 of the Sugar Export Promotion Act, 1958, used to fix the quantity of sugar for the purpose of export by issuing notification. Therefore, all the Sugar Mills were bound to comply with the notification and make necessary export out of India. However, the said Act has now been repealed w.e.f. 15.01.1997 and the export of sugar has now been decanalised. After repealing o the Act, the export of sugar has been made voluntary in the hands of Sugar Mills. After decanalisation of export of sugar, the Sugar Mills are not required to export as per the notification, issued by the Central Government. Now, in case, any Sugar Mill exports sugar, the Government will not be bound to compensate for the losses, if any. The Sugar Mills are not legally bound to export fixed quantity of sugar and they are free to sell sugar without any restriction.
As per Section 17A of the Act, the Government, after recording a satisfaction, could refund the purchase tax to any Sugar Mill on the quantity of sugar exported. This provision was made to give relief to the Sugar Industry, who could have suffered loss under the Sugar Export Promotion Act, 1958. After repealing of the said Act w.e.f. 15.01.1997, the petitioner-sugar mill is not bound to release a fixed percentage of sugar mandatorily for the purpose of export. Hence, it is not mandatory for the State Government to refund purchase tax on cane, utilize for manufacturing sugar, exported out of India u/s 17A of the Act.
In the reply dated 14.02.2013, filed by the Joint Director (Q.C.), Haryana, on behalf of respondent No. 1 and 2, it was further clarified that a public notice No. 398 (PN)/92-97, published in the Gazette of India dated 13.02.1997, it was revealed that the Sugar Mills were no longer forced to export certain fixed quantity of sugar as was prevailing earlier. The export of sugar was made voluntary in the hands of the Sugar Mills. As regards the payment of interest, there is no provision for grant of interest on the delay payment made to the petitioner. Moreover, as per instructions dated 28.11.1978 ( Annexure R-1), the State can claim interest at the rate of 15% per annum on the delayed payment of purchase tax.
In view of the written statement and the affidavit dated 18.04.2012, filed on behalf of the respondents, it is clear that the Sugar Export Promotion Act, 1958 has been repealed w.e.f. 15.01.1997. After repealing of the said Act, the Sugar Mills are free to export their sugar. They are not bound to export a fixed quantity of sugar by suffering loss on account of Government notifications. Hence, after 15.01.1997, all exports made by the Sugar Mills are voluntary. The prayer with regard to refund of purchase tax as per Section 17A of the Act, has been accepted from 1990-91 to 1995-96 and this benefit has not been extended after the Sugar Export Promotion Act, 1958, was repealed w.e.f. 15.01.1997 the sugar was decanalised.
Since no claim for refund of purchase tax can be made after 1997, therefore, the present petition is dismissed.