The mere despatch of manufactured goods by a dealer to his branches outside the State of Haryana (whilst retaining both title and possession thereof) does not come within the ambit of the phrase "disposes of the manufactured goods in any manner otherwise than by way of sale" as employed in Section 9(1)(a)(ii) of the Haryana General Sales Tax Act, 1973.

S.S.Sandhawalia, J.

1. Whether the mere despatch of manufactured goods by a dealer to his branches outside the State of Haryana (whilst retaining both title and possession thereof) would come within the ambit of the phrase "disposes of the manufactured goods in any manner otherwise than by way of sale" as employed in Section 9(1)(a)(ii) of the Haryana General Sales Tax Act, 1973 , is the spinal question in this set of six civil writ petitions. In more specific terms, the validity of Notification No. S.O. 119/H.A. 20/73/Ss. 9 and 15/74 dated 19th July, 1974, issued under Section 9 (prior to its amendment by Act No. 11 of 1979) and Sub-section (1) of Section 15 of the Haryana General Sales Tax Act, 1973 , levying purchase tax on the despatch of such goods is strenuously challenged on the ground of the same being beyond the scope of the Act aforesaid.

2. Learned counsel for the parties agreed that the issues of law and fact being identical this judgment would govern all the six writ petitions. The factual matrix, which is broadly common may be taken from C.W.P. No. 1138 of 1982 (Messrs. Goodyear India Limited, Ballabgarh v. State of Haryana). The petitioner-company is a well-known concern engaged in the manufacture of various types of tyres and tubes at Ballabhgarh, within the State of Haryana and is registered as a dealer both under the Haryana General Sales Tax Act, 1973 (hereinafter called "the Act"), and the Central Sales Tax Act, 1956. On the basis of the return submitted by the petitioner-company, respondent No. 2, the Assessing Authority has passed the assessment order, annexure P-l, dated 20th January, 1982. Therein it has been found that the company has transferred goods worth Rs. 43,32,61,857.59 as per books to its own branches and sales depots outside the State of Haryana, which were found to be in order. Rejecting the petitioners claim that no tax was payable thereon the Assessing Authority took the view that under Section 9 of the State Act purchase tax is leviable on proportionate value of the goods utilised in the manufacture of goods and sent to branches as stock transfer for sale. This has been primarily so held on the basis of the impugned notification, annexure P-2. Consequently, an overall liability to the tune of Rs. 6,16,482.92 has been created against the petitioner-company. The firm stand of the writ petitioner is that under Section 9 of the Act, the transfer of stocks by the company to its own branches and sales depots outside the State of Haryana, does not amount to a disposal of the same and is consequently not exigible to tax under Section 9 of the Act. It is highlighted that both the title and the possession of goods have admittedly been retained by the petitioner-company and their mere despatch outside the State does not amount to "disposing of" the manufactured goods. On these premises the impugned notification, annexure P-2, is assailed, as wholly beyond the scope of the Act and therefore ultra vires of the same.

3. Inevitably, the controversy herein revolves closely around the relevant provisions of the unamended Section 9 of the Act and the terms of the impugned notification, annexure P-2, which may be quoted for facility of reference at the very outset:

9. Where a dealer liable to pay tax under this Act purchases goods other than those specified in Schedule B from any source in the State and- (a) uses them in the State in the manufacture of,- (i) goods specified in Schedule B or,-

(ii) any other goods and disposes of the manufactured goods in any manner otherwise than by way of sale whether within the State or in the course of inter-State trade or commerce or within the meaning of Sub-section (1) of Section 5 of the Central Sales Tax Act, 1956, in the course of export out of the territory of India,

(b) exports them, in the circumstances in which no tax is payable under any other provision of this Act, there shall be levied, subject to the provisions of Section 17, a tax on the purchase o