Chandigarh, February 25
Twenty years after the Punjab government issued a notification on tax on tyres
and tubes, the Punjab and Haryana High Court has quashed it.
Allowing
a petition filed by Birla Tyres, the Bench of Justice MM Kumar and Justice Ajay
Kumar Mittal ruled: "The notification cannot be held to be valid and is
hereby quashed. The respondents, State of Punjab and others, cannot be held
entitled to charge sales tax at 12 paise in a rupee on motor tyres and tubes
and at 8 paise in a rupee on tractor tyres and tubes from April 1, 1992 to
August 20, 1992".
Prior
to November 9, 1990, the rate of sales tax on motor tyres/tubes was 12 paise in
a rupee and 8 paise in a rupee on tractor tyres and tubes. With effect from
November 9, 1990, the Punjab government amended the notification dated December
2, 1982, and introduced a clause providing rate of tax on motor tyres and tubes
at nine paise in a rupee till March 31, 1992.
The
Bench asserted: "The respondents vide notification dated November 9, 1990,
had amended the notification dated December 2, 1982, reducing the rate from 12
paise to 9 paise in a rupee on motor tyres and tubes up to March 31, 1992, and
vide notification dated December 28, 1990, the rate of sales tax on tractor
tyres and tubes was reduced from 8 per cent to 6 per cent up to March 31, 1992,
which was later on continued up to March 31, 1994, vide notification dated
August 20, 1992.
"But,
vide notification dated December 1, 1992, the rate of 9 paise in a rupee on
motor tyres and tubes and 6 paise in a rupee on tractor tyres and tubes has
been made effective from August 20, 1992, instead of April 1, 1992, without
giving any reasonable ground for adopting such date…."
"In
view of the above, the writ petitions are allowed. It is held that the
petitioners shall be liable to pay sales tax for the period from 1.4.1992 to
20.8.1992 in accordance with the notification dated August 20, 1992, and the
assessing authority shall determine the liability, if any, accordingly".
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