The main legal point established in the judgment is that the sale of stocks existing on the mid-night of June 25, 2001 in the State of Haryana shall not attract the levy of sales tax, as it would not be the first sale in the State of Haryana, following the amendment to the Haryana General Sales Tax Act, 1973.

Jawahar Lal Gupta, J.

1. The petitioners are engaged in the sale of liquor in the State of Haryana. They have licences for the wholesale and retail sale of Indian-made foreign liquor as well as for retail sale of country liquor. The vends were allotted to the petitioners in an open auction. It is alleged that at the time of auction, it was announced that "there would be no sales tax on the Indian-made foreign liquor".

2. In pursuance to the grant of licences, the petitioners had started the sale of liquor from April 1, 2001. On June 26, 2001, the State of Haryana issued a notification amending the provisions of the Haryana General Sales Tax Act, 1973 . By this notification, Schedule "B" which embodies the list of items exempted from the levy of sales tax was amended. Entry 24A relating to the sale of Indian-made foreign liquor was omitted. A corresponding entry was made in Schedule "C". A copy of this notification is at annexure P3 with the writ petition.

3. The wine contractors in the State of Haryana represented. Petitioner Nos. 1, 2, 3 and 5 also filed petitions to challenge the imposition of sales tax. The petitioners allege that during the pendency of the writ petitions, the State Government decided to reconsider the matter. Thus, they filed applications to withdraw the writ petitions. The prayer was allowed. The notification amending the Act was issued on October 15, 2001. A copy of this notification is at annexure P4 with the writ petition. However, the petitioners were told to pay tax for the period from June 26, 2001 to October 15, 2001.

4. The provisions of the Act having been amended on June 26, 2001, notices were issued to the wine contractors for deposit of tax. A notice dated July 19, 2001 was issued to petitioner No. 1 informing it of its "liability to pay tax... on the opening stock of June 26, 2001 of 1,01,556 bottles of IMFS and 1,04,844 bottles of beer....". It was further pointed out that it had "received 1,12,548 bottles of IMFS and 1,26,000 bottles of beer....from June 26, 2001 to June 30, 2001 without payment of sales tax at the stage of L-1B and L-1-B/1". On this basis, it was alleged that "the total stock of IMFS and beer....to be taxed comes to 2,14,104 bottles of IMFS and 2,30,844 bottles of beer". This stock was valued at Rs. 2,71,81,500. Tax at 25 per cent was demanded "in case of stock sold at Rs. 500 and more per quart and 20 per cent in case of stock sold below that rate". Directions for deposit of tax on the above-noted "stock by July 31, 2001" were thus, given.

5. The petitioners allege that the demand of tax on stocks is totally without authority of law. In fact, the collection of tax for the period from June 26, 2001 to October 15, 2001 is against the terms of the contract and thus untenable.

6. The petitioners have also raised issues regarding the enhancement and lowering of prices, the orders of cancellation of licences and the composition fee imposed by the authority. However, learned counsel for the petitioners has very clearly stated before us that he is not pressing the case in that behalf. Thus, we are not noticing the other facts as alleged in the petition. The challenge has been confined to the issue of levy of tax on goods which were in stock with the petitioners on the midnight of June 25, 2001.

7. A written statement has been filed on behalf of the respondents by the Deputy Excise and Taxation Commissioner (Headquarter), Haryana. It is maintained that the terms of auction have not been violated. The levy of tax is in strict conformity with the provisions of the Act. The notice issued to the petitioners for deposit of tax is legal and valid. The sale of IMFS and foreign liquor has been exempted from the levy of tax only when the price is less than Rs. 500 per quart. The action being in conformity with law, no ground for interference is made out. The petitioners have filed a replication.

8. Initially, during the course of hearing, various documents were produced however, in