Om Jee Snacks Pvt. Ltd. v. State Of Haryana And Another

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 and sought relief against a Government of Haryana, Excise and Taxation Department clarification dated 22.08.2013 which provided that the element of service tax would be included for the purpose of "sale price" and taxed. The writ petition was entertained initially because the Tribunal (before which an appeal against the clarification lies) was not functional. At the time of this decision the Tribunal had become functional but a vacancy arising from the retirement of the third Member had not been filled. Appeal against clarifications under Section 56(3) of the Haryana VAT Act is to be heard by a Bench of not less than three Members. The State's counsel (after consulting the Advocate General) stated that the vacancy would be filled within two months. The Court relegated the petitioner to pursue the remedy of appeal before the Tribunal and disposed of the writ petition.

Legal Issues Presented

1. Whether the definition of "sale price" contained in Section 2(1)(zg) of the Haryana VAT Act, 2003 is valid.
2. Whether the Government of Haryana's clarification dated 22.08.2013—which treats the element of service tax as part of the "sale price" for levy of tax—was validly issued and actionable.
3. Procedural: Whether the petitioner could be relegated to file an appeal before the Tribunal given earlier non‑functionality of the Tribunal and the existing vacancy in its membership.

Arguments of the Parties

Petitioner's Arguments

• The writ petition was filed to challenge the validity of Section 2(1)(zg) (definition of "sale price") and the Government clarification dated 22.08.2013 including service tax in sale price.
• At the time of initial filing, the Tribunal before which an appeal lies was not functional (argument advanced in support of entertaining the writ).

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 acknowledged that the writ petition had been entertained earlier because the Tribunal was not functional. It noted the Tribunal had become functional but that one vacancy (the third Member) remained unfilled. Noting 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, and relying on the State's undertaking that the vacancy would be filled within two months, the Court concluded the petitioner had an adequate alternative remedy of appeal before the Tribunal. Consequently, the Court relegated the petitioner to pursue that appellate remedy. To protect the petitioner's rights given the prior pendency in this Court, the Court directed that if the petitioner filed the appeal within 30 days it should not be dismissed for delay and must be considered on merits. The Court expressly did not examine the validity of Section 2(1)(zg) in this proceeding and left open the petitioner's liberty to challenge it later.

Holding and Implications

HOLDING: The writ petition is disposed of and the petitioner is relegated to file an appeal before the Tribunal; if the appeal is filed within 30 days it shall not be dismissed for delay and shall be considered on its merits.

Implications: The direct effect is that the petitioner must pursue the statutory appellate remedy before the Tribunal (which must sit as a three‑Member Bench). The Court did not decide on the substantive validity of Section 2(1)(zg) and set no precedent on that issue; the petitioner remains free to challenge that provision subsequently.