M/S. Shri Ram Enterprises, Hisar v. State Of Haryana

AJAY KUMAR MITTAL, J.

CM Nos. 14922-23-CII of 2014

After hearing learned counsel for the parties, the delay of 92 days in refiling and 754 days in filing the appeal is condoned.

CMs stand disposed of accordingly.

VATAP No. 95 of 2014

1. This order shall dispose of a bunch of three appeals bearing VATAP Nos. 95, 98 and 99 of 2014 as according to the learned counsel for the parties issues involved herein are identical. For brevity, the facts are being extracted from VATAP No. 95 of 2014.

2. This appeal has been filed by the assessee under Section 36 of the Haryana Value Added Tax Act, 2003 (hereinafter referred to as “the Act”) against the order dated 3.10.2011 (Annexure A-3) passed by the Haryana Tax Tribunal, Chandigarh (in short “the Tribunal”) in STA No. 829 of 2010-11, claiming the following substantial questions of law:-

(i) Whether in the facts and circumstances of the present case, HDPE/PP Woven Fabric is ‘Artificial Silk’ and therefore falls within the ambit of Entry 51 of Schedule B of the Haryana VAT Act, 2003 which is a para material to the Entry 14 of the HGST Act, 1973?

(ii) Whether in the facts and circumstances of the present case, the impugned order is against the legislative history as well as intent of Entry 51 of Schedule B of the Haryana VAT Act, 2003?

(iii) Whether in the facts and circumstances of the present case, the impugned order is contrary to decision of Hon'ble Supreme Court in the case of Porritt & Spencers case as well as the decision of the Hon'ble Madras and Allahabad High Court?

(iv) Whether the law is applicable on the day the taxable event occurs is the applicable law that governs the field?

(v) Whether the action of the State in taking different stand in different clarifications on the same issue is violative of Article 14 and Article 265 of the Constitution of India?

(vi) Whether in the facts and circumstances of the present case, under the scheme of the HVAT Act once the appellant is able to show that HDPE Fabric was purchased from within the State of Haryana from a registered dealer can the entire tax be recovered from the appellant leaving the earlier dealer?

(vii) Whether in the facts and circumstances of the present case, the charging and upholding of interest in the facts of the present case is sustainable in law?

3. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The appellant is engaged in the business of manufacturing of HDPE/PP Bag. It had been purchasing high-density polyethylene Fabric for making bags for selling the same. The assessee filed its return for the assessment year 2006-07 declaring the sale of HDPE fabric as tax free falling within Entry 51 to Schedule B appended to the Act. The Assessing Officer vide assessment order dated 30.3.2010 (Annexure A-1) taxed the sales of HDPE Fabric and created demand and charged interest. Tax was levied @ 12.5%. Feeling aggrieved, the assessee filed an appeal before the Joint Excise and Taxation Commissioner (Appeal) who vide order dated 13.12.2000 (Annexure A-2) partly allowed the appeal by taxing HDPE Woven Fabric @ 4% and recalculated the interest accordingly. Still not satisfied, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 3.10.2011 (Annexure A-3) disposed of the appeal in terms of judgment dated 27.6.2011 passed by the Tribunal in STA No. 684 of 2010-11 (Suraj Plastic Industries, Panipat v. State of Haryana). Thereafter, the assessee filed a review application which was allowed vide order dated 28.6.2012 (Annexure A-4). The revenue challenged the order dated 28.6.2012 (Annexure A-4) before this Court by way of VATAP No. 70 of 2013. This Court vide order dated 9.12.2013 (Annexure A-5) allowed the appeal and set aside the order (Annexure A-4). However, liberty was given to the assessee to file an appeal challenging the order dated 3.10.2011 (Annexure A-3). Hence, the present appeal.

4. We have heard learned counsel for the parties.

5. The primary question that arises in these appeals is whether in the facts and circumstances of the present case, HDPE/PP Woven Fabric is “Artificial Silk” and, therefore, falls within the ambit of Entry 51 of Schedule B of the Act.

6. Learned counsel for the parties are ad idem that the issue raised in these appeals is no longer res integra and stands concluded by the decision of the Division Bench of this Court in A.R Plastic Pvt. Ltd., Gurgaon Road, Jhajjar v. State of Haryana (2014) 48 PHT 350 (P&H), wherein it has been observed as under:-

“20. The clarification issued by the Financial Commissioner-cum-Principal Secretary, Government of Haryana, Excise and Taxation Department on 10.12.2009 that the products manufactured by similar manufacturers are not covered under entry 52 and 53 of Schedule B nor under Schedule C of the Act, therefore, an unclassified good is liable to be taxed at the rate of 12.5%. We find that such clarification runs counter to meaning of the expression “textile” including “artificial silk” given by Supreme Court. In view of the interpretation of the similar provision, in respect of the present assessee itself, we find that the clarification could not be issued against an order passed by the competent authority interpreting similar provision.

21. Consequently, in respect of question of law it is held that HDPE woven fabric falls within entry 51 of Schedule B of Haryana VAT Act, 2003 and is exempted from payment of tax.”

7. In view of the above, the present appeals are disposed of in the same terms as in A.R Plastic Pvt. Ltd., Gurgaon Road, Jhajjar's case (supra).