Haldi Ram Manufacturing Co. Pvt. Ltd. v. State Of Haryana And Another, Punjab & Haryana High Court, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

CWP No. 17463 of 2014 (O&M)

Advocates

Mr. Sandeep Goyal, Advocate
Ms. Mamta Singla Talwar, DAG, Haryana.

Judges

Rajesh Bindal
Amit Rawal, JJ.

Acts

Section 2(1)(zg) of the Haryana VAT Act, 2003.
Section 2(1)(zg) of the Haryana VAT Act.
Section 56(3) of the Haryana VAT Act

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Smart Summary

Factual and Procedural Background

The petitioner challenged the validity of the definition of “sale price” in Section 2(1)(zg) of the Haryana VAT Act, 2003, a Government of Haryana clarification dated 22.08.2013 treating the element of service tax as part of sale price for taxation, and a notice dated 08.08.2014 issued to the petitioner. The writ petition was entertained earlier because the Tribunal, which hears appeals against such clarifications, was not functional at that time. The Tribunal has since become functional, but a vacancy created by the retirement of the third Member has not been filled.

Legal Issues Presented

Whether the definition of “sale price” in Section 2(1)(zg) of the Haryana VAT Act, 2003 is valid (as challenged by the petitioner).
Whether the Government clarification dated 22.08.2013 (treating service tax element as part of sale price) is valid.
Whether the notice dated 08.08.2014 issued to the petitioner is maintainable.
Procedural: availability and adequacy of the remedy of appeal against the clarification before the Tribunal constituted under Section 56(3) of the Haryana VAT Act, including the requirement that such appeals be heard by a Bench of not less than three Members.
Whether interim relief (stay) previously granted by this Court should be continued pending determination by the Tribunal, given the vacancy of the third Member.

Arguments of the Parties

Petitioner's Arguments

When the writ petition was first entertained, the Tribunal was not functional, justifying direct relief from this Court.
During pendency of the writ petition, proceedings pursuant to the notice were stayed; petitioner requested continuation of that interim stay until the Tribunal decides the interim application filed in the appeal.

State's Arguments

After consultation with the Advocate General, the State's counsel submitted that the vacancy caused by the retirement of the third Member of the Tribunal would be filled within two months.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court noted that appeals against Government clarifications under Section 56(3) of the Haryana VAT Act must be heard by a Bench of not less than three Members. Although the Tribunal is now functional, the vacancy of the third Member remained unfilled; the State undertook to fill that vacancy within two months. Because the petitioner had an available remedy of appeal to the Tribunal, the Court relegated the petitioner to avail that remedy rather than decide the substantive challenges in this writ petition. To protect the petitioner's position given the Tribunal's incomplete constitution, the Court directed that if the petitioner files an appeal within 30 days, the appeal shall not be dismissed for delay and shall be considered on its merits. The Court also found it reasonable to continue the interim stay previously granted by this Court until the Tribunal decides the petitioner's application for interim relief, subject to the condition that the appeal and the stay application are filed within 30 days. The Court expressly stated that it did not examine the validity of Section 2(1)(zg) of the Haryana VAT Act in this proceeding.

Holding and Implications

Writ petition disposed of.

Direct consequences for the parties:

The petitioner is relegated to file an appeal against the Government clarification before the Tribunal; if filed within 30 days, the appeal will not be dismissed for delay and will be considered on merits.
The interim stay previously granted by this Court shall continue until the Tribunal decides the petitioner's interim relief application, provided the petitioner files the appeal and the stay application within 30 days.
The State is to fill the vacancy of the third Member of the Tribunal within two months.
The Court did not decide the substantive validity of Section 2(1)(zg); the petitioner remains at liberty to challenge it later.

No broader precedent was set by this opinion; its effect is limited to the procedural directions and relief specified above.

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Haldi Ram Manufacturing Co. Pvt. Ltd. v. State Of Haryana And Another

Rajesh Bindal, J.:— The present petition has been filed by the petitioner challenging the validity of definition of “sale price” as contained in Section 2(1)(zg) of the Haryana VAT Act, 2003. Further challenge has been made to the clarification issued by the Government of Haryana, Excise and Taxation Department dated 22.08.2013, which provides that element of service tax will be considered for the purpose of sale price and tax shall be levied on that. Challenge has also been made to the notice dated 08.08.2014 issued to the petitioner.

2. The writ petition was entertained noticing the arguments of learned counsel for the petitioner at that time that the Tribunal, where the appeal against clarification is maintainable, was not functional. However, the fact remains that now the Tribunal is functional but the vacancy created on retirement of third Member has not been filled up.

3. Appeal against any clarification issued by the Government in exercise of powers under Section 56(3) of the Haryana VAT Act is to be heard by a Bench consisting of not less than three Members.

4. Learned counsel for the State after consulting learned Advocate General submitted that vacancy created on retirement of third Member shall be filled up within two months.

5. It is not in dispute that the petitioner has remedy of appeal against the clarification issued by the Government, hence, we relegate the petitioner to avail its remedy of appeal before the Tribunal. As the writ petition remained pending in this Court, we direct that if the appeal is filed within 30 days, the same shall not be dismissed on account of delay and shall be considered on its merits.

6. At this stage, learned counsel appearing for the petitioner submitted that during the pendency of the writ petition before this Court, further proceedings in pursuance to notice issued were stayed. He prays that till such time application for interim relief is decided by the Tribunal in the appeal and the said application to be filed by the petitioner, interim stay already granted by this Court be continued, as the State is yet to appoint third Member of the Tribunal.

7. We find the prayer to be reasonable. Admittedly there is vacancy of third Member in the Tribunal and appeal can be heard only by a Bench of minimum three Members. Third Member is to be appointed within two months as stated by learned counsel for the State. We direct that till such time the application for interim relief filed by the petitioner along with the appeal is decided by the Tribunal, interim stay already granted by this Court shall continue. It is subject to the condition that appeal and stay application is filed by the petitioner within 30 days.

8. It is made clear that we have not examined the validity of Section 2(1)(zg) of the Haryana VAT Act. The petitioner shall be at liberty to challenge the same later, if necessary.

9. The writ petition stands disposed of accordingly.

Haldi Ram Manufacturing Co. Pvt. Ltd. v. State Of Haryana And Another

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments

State's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Haldi Ram Manufacturing Co. Pvt. Ltd. v. State Of Haryana And Another

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