State of Haryana vs Bhagwati Cattle Feed Industries

M.M. Kumar, J.—The Haryana Tax Tribunal, Chandigarh (for brevity, "the Tribunal") entertained an application u/s 42(1) of the Haryana General Sales Tax Act, 1973 (for brevity, "the Act") filed by the Excise and Taxation Commissioner, Haryana, seeking reference of various questions of law alleged to have emerged from the order of the Tribunal, dated April 2, 2002. It is pertinent to mention that the "Tribunal" has allowed the appeal of the assessee-respondent by its order dated July 2, 1999 and the State had sought review of that order by moving an application u/s 41 of the Act. The application was dismissed vide order dated April 2, 2002. The Tribunal accepted the application u/s 42(1) of the Act and referred the following question of law for determination of this Court:

(i) Whether an ingredient (D.O.R.B.) independently, could be considered as ''cattle feed'', though entry No. 67 in Schedule B describes it as a mixture of rice polish, rice-bran de-oiled, gram churi, mustard extraction, molasses, barley sprout, salt, mineral mixture, urea and damaged wheat?

The Tribunal also observed that the aforesaid question emerged from the order of the Tribunal dated April 2, 2002. The statement of the case has been prepared and the matter has been referred to this Court.

At the outset, Mr. Avneesh Jhingan, learned Counsel for the dealer-assessee, has raised a preliminary issue that no question of law would emerge from the order dated April 2, 2002 because it is an order declining to review the original order dated July 2, 1999 passed in STA No. 539 of 1997-98. The review was filed u/s 41 of the Act and the same was declined on April 2, 2002. Mr. Jhingan has argued that a perusal of the order dated April 2, 2002 would show that the question as to whether D.O.R.B. as an independent ingredient could be considered as cattle feed has not been the subject-matter of debate in order dated April 2, 2002 though entry 67 in Schedule B describes it as a mixture of rice polish, rice-bran de-oiled, gram churi, mustard extraction, molasses, barley sprout, salt, mineral mixture, urea and damaged wheat. In support of his submission, learned Counsel has placed reliance on a judgment of the honourable Supreme Court in the case of Commissioner of Income Tax, Bombay Vs. Scindia Steam Navigation Co. Ltd., and has argued that the question referred must emerge from the order of the Tribunal. He has drawn our attention to the provisions of Section 42 of the Act, which uses the expression "any question of law arising out of such order". Learned Counsel has emphasised that on the basis of an order passed on a miscellaneous application, the Commissioner had referred a question of law to the jurisdictional High Court, i.e., the Madras High Court u/s 66(1), which is in pari materia to the provisions of Section 42(1) of the Act. The Madras High Court declined to answer the question on the ground that the order which was passed in appeal was not the basis of the reference and no reference was sought on that basis. The aforesaid decision of the Madras High Court was affirmed by the honourable Supreme Court in the case of Commissioner of Income Tax, Madras Vs. Mtt. Ar. S. Ar. Arunachalam Chettiar, . The judgment has been followed again in Commissioner of Income Tax, Bombay Vs. Scindia Steam Navigation Co. Ltd., .

Learned Counsel for the Revenue-applicant could not successfully meet the aforesaid preliminary objection raised by the learned Counsel for the assessee-respondent.

Having heard learned Counsel for the parties, we are of the considered view that the preliminary objection raised by Mr. Avneesh Jhingan is unexceptional and deserves to be accepted. The issue is squarely covered by the judgment of the honourable Supreme Court in the case of Commissioner of Income Tax, Bombay Vs. Scindia Steam Navigation Co. Ltd., . Accordingly, we decline the reference and sent back the same unanswered as it does not emerge from the order of the Tribunal dated April 2, 2002.