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1998 Supreme(Gau) 26
J.N. Sarma, J.
L. R. RICE MILLS PVT. LTD. AND ANOTHER
Versus
SUPERINTENDENT OF TAXES AND OTHERS.
Civil Rule No. 722 of 1995
Decided On: Decided On : 04-02-1998
G. K. Joshi, R. K. Joshi and Mrs. U. Chakraborty, for the petitioner.
K. H. Choudhury, Government Advocate, Assam, for the respondents.
Paddy purchased prior to June 30, 1993, but lying unmilled in the stock in the hands of the petitioner, was not liable to tax as it did not acquire the character of the last purchase.
Headnote:
PURCHASE TAX - ASSAM PURCHASE TAX ACT, 1967 - SECTION 3(2) - PADDY PURCHASED PRIOR TO JUNE 30, 1993 BUT LYING UNMILLED IN STOCK - NOT LIABLE TO TAX - NOT LAST PURCHASE.
Fact of the Case:
The petitioner, a rice milling company, challenged the legality and validity of an order of assessment dated February 7, 1994, passed by the Superintendent of Taxes, Nalbari, under section 8(3) of the Assam Purchase Tax Act, 1967. The order assessed to tax, amongst others, the paddy purchased prior to June 30, 1993, but lying unmilled in the stock in the hands of the petitioner. The petitioner contended that this assessment was made on extraneous consideration as the said stock did not acquire the character of the last purchase.
Finding of the Court:
The court held that the paddy purchased prior to June 30, 1993, but lying unmilled in the stock in the hands of the petitioner, was not liable to tax as it did not acquire the character of the last purchase. The court relied on the provisions of section 3(2) of the Assam Purchase Tax Act, 1967, and the Supreme Court decisions in State of Madras v. T. Narayanaswami Naidu and Deputy Commissioner of Sales Tax (Law). Board of Revenue (Taxes) v. Padinjarakara Agencies.
Issues: Whether the paddy purchased prior to June 30, 1993, but lying unmilled in the stock in the hands of the petitioner, was liable to tax under the Assam Purchase Tax Act, 1967.
Ratio Decidendi: The court held that the paddy purchased prior to June 30, 1993, but lying unmilled in the stock in the hands of the petitioner, was not liable to tax as it did not acquire the character of the last purchase. The court relied on the provisions of section 3(2) of the Assam Purchase Tax Act, 1967, and the Supreme Court decisions in State of Madras v. T. Narayanaswami Naidu and Deputy Commissioner of Sales Tax (Law). Board of Revenue (Taxes) v. Padinjarakara Agencies.
Final Decision: The court allowed the writ application and quashed the order of assessment and the revisional order.
J. N. SARMA, J. - This writ application has been filed challenging the legality and validity of the order of assessment dated February 7, 1994 passed by the Superintendent of Taxes, Nalbari, under section 8(3) of the Assam Purchase Tax Act, 1967 for the quarterly period ending June 30, 1993 assessing to tax, amongst others, the paddy purchased prior to June 30, 1993 but lying unmilled in the stock in the hands of the petitioner-company. It is urged that this assessment was made on extraneous consideration as the said stock did not acquire the character of the last purchase. The revisional order at annexure III against the order of assessment is also challenged.
2. By the impugned order of assessment a further demand to the tune of Rs. 16,706 being Rs. 15,072 on account of tax and Rs. 1,634 on account of interest was made in addition to the admitted tax already paid to the extent of Rs. 11,676.
3. There was a revision before the Joint Commissioner of Taxes, Assam and the Joint Commissioner by order dated October 23, 1994 rejected the revision. The order of assessment is annexure I to the writ application and the order of revision is annexure III to the writ application.
4. The brief facts are as follows :
The petitioner is a private company and it has place of business at Nalbari and it carries on business of rice milling. The petitioner is liable to pay tax under the provisions of Assam Purchase Tax Act, 1967 and the Rules, that is Assam Purchase Tax Rules framed thereunder. The petitioner is liable to pay tax on the amount of purchase of paddy at the last point of time under the provisions of the Act. It is further stated herein that the tax on the paddy was payable up to June 30, 1993 under the above Act of 1967. But that Act was repealed on July 1, 1993 after coming to force of the new consolidated Act, that is, Assam General Sales Tax Act with effect from July 1, 1993. Under the new Act the paddy is not subjected to tax with effect from July 1, 1993. That for the period ending March 30, 1993 the petitioner No. 1 submitted return showing the value of paddy purchased at Rs. 5,90,922 along with payment of admitted tax of Rs. 11,676. Thereafter a notice was issued by the authority for assessment and the petitioner appeared before the assessing authority produced the books of accounts, i.e., rokar, khata and stock register and they were verified by the authority. It was submitted before the authority that the paddy which was not milled remained in stock, it is not liable to tax as it did not acquire the quality of last purchase. The respondent No. 2 however, did not accept this contention and passed the order of assessment as indicated above under section 8(3) of the Act.
5. I have heard Shri G. K. Joshi, learned Advocate for the petitioner and Shri K. H. Choudhury, learned Advocate for the respondents. An affidavit-in-opposition has been filed on behalf of the respondents and an affidavit-in-reply has been filed on behalf of the petitioner. Shri Joshi contended as follows :
(1) Stock and purchase of paddy which did not acquire the character of last purchase and is not liable to be taxed under the provisions of section 3(A) of the Act. It cannot be deemed to be turnover.
(2) The question of onus which was raised in the order of revision was not considered by the assessment authority and the revisional authority unnecessarily considered the question of onus. Onus was duly discharged by disclosing the stock of unmilled paddy and that was not disputed.
6. In order to appreciate the contentions let us have a look at the Act, 1967. Section 3(2) is regarding the levy of tax. The entire section 3 is quoted below :
Section 3 : (1) Subject to the provisions of this Act, every dealer shall be liable to pay tax on his turnover at such rates as may be specified in the (Schedule).
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Provided (* * *) that the State Government may grant a rebate not exceeding one per centum of
