G.S. Singhvi and B. Rai, JJ.
1. These petitions, in which orders passed by the Assessing Authority for assessment years 1973-74 to 1977-78 and the demand notices issued for recovery of purchase tax, constitute a part of the series of litigation between the parties.
2. In order to decide the legality of the impugned orders/demand notices, it is imperative to narrate facts which will give an over all picture of the historical perspective of the case. The petitioner No. 1 is engaged in, the manufacture and sale of automobile tyres and tubes in its factory at Ballabgarh, District Faridabad. The petitioner No. 1 purchases raw-material such as rubber and chemical headwares etc. either within the State of Haryana or from outside the State of Haryana for its manufacturing activities. Manufactured goods are despatched to the various depots of the petitioner situated within and outside the State of Haryana. It is registered under the Haryana General Sales Tax Act, 1973 (hereinafter referred to as 'the State Act') and the Central Sales Tax Act, 1956 (hereinafter referred to as 'the Central Act'). The levy of purchase tax on raw-materials purchased by the petitioner Was successfully challenged by it in this Court. By its judgment dated December 4, 1982 (Good-year India Limited v. State of Haryana, 153 STC 163) this Court declared the levy of purchase tax to be ultra vires to Section 9 of the State Act. This judgment relates to the assessment years 1976-77 and 1977-78. For the assessment years. 1973-74, 1974-75 and 1975-76 the challenge made by the petitioner was upheld in Bata India Limited v. State of Haryana and Anr., (1983) 54 STC 226. A Division Bench of this Court struck down the amendment made in the State Act by the Haryana General Sales Tax (Amendment & Validation) Act, 1983. The State of Haryana filed petitions for Special Leave to Appeal against the judgments in Good Year India Limited v. State of Haryana, 53 STC 163 and Bata India Limited v. State of Haryana, 54 STC
226. During the pendency of the Special Leave Petitions, the respondents issued notices to the petitioners Under Section 50 of the State Act. These were also challenged by the petitioners by filing writ petitions on the ground that the Government had no jurisdiction to take action Under Section 50 in the face of, the decisions of the High Court. Before these petitions could be decided by the High Court, the Governor of Haryana issued the Haryana General Sales Tax (Amendment and Validation) Act, 1984 (Act No. II of 1984). The petitioners amended the pending writ petitions and challenged the constitutional validity of the Amendment Ordinance No. 2 of 1984 and Amendment Act No. 11 of 1984. A learned single Judge (M.M Punchhi, J.) as he then was, who heard the writ petitions expressed serious doubts about the correctness of the view taken in Bata India Limited v. State of dlaryana, 54 STC 226. Therefore, the matter was placed before a Full Bench of this court. Vide its judgment in Desh Raj Pushap Kumar Gulati v. State of Punjab, (1985) 58 STC 393, the Full Bench overruled the judgment pf the Division Bench in Bata India Limited's case and upheld the validity of Section 9(1) of the State Act as well as the levy of purchase tax. The petitioner company preferred Special Leave Petitions against the judgment of the Full Bench.
3. On 21 st July, 1986, the respondent No. 2 passed assessment order for the years 1973-74 to 1977-78 and 1980-81 and directed the petitioners to pay Rs. 22,15,269/- as would appear from notice Annexure P-5 issued in form ST-28. On 10.9.1986 the Assessing Authority issued fresh notices for levy of purchase tax Under Section 9 of the State Act. The petitioners objected these notices by filing written reply dated 14.10.1986 wherein it referred to the two decisions of the High Court in Good-year India Limited v. State of Haryana, 53 STC 163 and Bata India Limited v. State of Haryana, 54 STC 226. The Assessing Authority rejected the objections raised by the petitioners by making reference to the judgment of the Full Bench in Desh Raj Pushap Kumar Gulati's case (supra) and levied purchase tax for the years 1973-74 to 1977-78 vide separate orders dated 20th October, 1986. Immediately thereafter demand notice dated 12.11.1986 came to be issued by the Assessing Authority under Form-28 requiring the petitioners to deposit the amount of tax.
4. Historical narration of the case would be incomplete without making reference to developments which have taken place during the pendency of these petitions. The appeals filed by the petitioner against the judgment of the Full Bench in Desh Raj Pushap Kumar Gulati v. State of Punjab, (supra) came to be considered by the Supreme Court alpngwith a batch of other appeals in Mis Good-year India Limited v. State of Haryana, AIR 1990 SC 781 which were filed by the other dealers of the State of Haryana. Their Lordships of the Supreme Court decided not only the appeals filed against the decision of the Full Bench but also similar appeals filed against the judgment of the Full Bench by other dealers, some writ petitions directly filed in the Supreme Cojurt challenging the validity of the Amendment Act No. 11 of 1984 and some appeals filed by the dealers against the decision of the Bombay High Court. A two Judges Bench of the Apex Court declared that taxes sought to be levied Under Section 9(l)(b)of the Haryana Act and Section 13-AA of the Bombay Sales Tax Act were taxes on consignment and, therefore, two provisions were beyond the legislative competence of the State. On that premise the judgment of the Full Bench of this Court and a judgment of the Bombay High Court in Wipro Products Limited v. State of Maharashtra, (1989) 72 STC 69, were reversed. The Supreme Court also upheld the judgments in Good-year India Limited v. State of Haryana, 53 STC 163 and Bata India Limited v. State of Haryana,2 54 STC 226.
5. In Mukerian Papers Ltd. v. State of Punjab, (1991) 81 STC 152, a three Judges Bench of the Supreme Court expressed its agreement with the view taken in Goodyear India Limited v. State of Haryana, AIR 1990 SC 781 and quashed the levy of purchase tax Under Section 4-B of the Punjab General Sales Tax Act, 1948. However, in Hotel Balaji and Ors. v. State of Andhra Pradesh and Ors., JT 1992(6) SC 182:(1993) 88 STC 98, a three Judges Bench of which S. Ranganathan, J. (who was also a member of the two Judges Bench in Good Year India's case) was a member affirmed the decision of the Andhra Pradesh High Court in Hindustan Milk Food Manufacturers Ltd. v. State of Andhra Pradesh, (1982) 51 STC 1, as well as the decision of the learned single Judge of Allahabad High Court in S.T.R. No. 323 of 1989 decided on 3.1.1991 and dissented from the decision of the two Judges Bench in Good-year India Limited v. State of Haryana (supra). Their Lordships considered the provisions of Section 3- AAAA of Andhra Pradesh General Sales Tax Act, 1957. Section 3-A and Section 2-A of the U.P. Sales Tax Act, 1948, Section 9 of the Haryana Act and Section 13-AA of the Bombay Act and held that these provisions were intra vires to the powers of the State Legislature because tax imposed by these sections was a tax levied on the price of raw-material purchased by a manufacturer and it was not a tax on the manufactured goods or consignment sale. The three Judges Bench referred to the decisions of this Court in Goodryear India Limited v. State of Haryana, 53 STC 163, Bata India Limited v. State of Haryana, 54 STC 226 and Desh Raj Pushap Kumar Gulati v. State of Punjab, 58 STC 393 and clearly disagreed with the views expressed by Sabyasachi Mukharji, J. (as he then was) in Good Year India's case. The three Judges Bench also held that Mukerian Papers Limited v. State of Punjab (supra) in which the Section 4-B of the Punjab General Sales Tax Act, 1948 came up for interpretation was decided simply on the basis of the decision in Good Year India's case and the decision rendered in State of Tamil Nadu v. Kandaswami, (1975) 36 STC 191 was not considered by the Supreme Court.
6. Validity of Section 4-B of the Punjab Act was again examined alongwith similar provisions of Tamil Nadu Sales Tax Act, Kerala Sales Tax Act and West Bengal Sales Tax Act in Devi Dass Gopal Krishan Pvt. Ltd. v. State of Punjab and Anr., JT 1994(3) S.C. 239. It was argued on behalf of the dealers that Hotel Balaji's case (supra) was not correctly decided and in view of the apparent conflict of opinion between Mukerian Papers Ltd. v. State of Punjab (supra) on the one hand and Hotel Balaji and Ors. v. State of Andhra Pradesh and Ors. (supra) on the other hand, the question should be referred to a larger bench. This plea was rejected by a Bench of three Judges which consisted of M.N. Venkatachaliah, C.J., A.M. Ahmadi and B.P. Jeevan Reddy, JJ., two of whom (M.N. Venkatachaliah, as he then was and A.M. Ahmadi, JJ.) were members of the Bench which decided Mukerian Papers' case. The Apex Court observed that correctness of Goodyear India's case was not questioned in Mukerian Papers' case and, therefore, there was no occasion for the Bench to affirm or dissent from the decision in Goodyear India's case. The Court proceeded to reiterate the views expressed in Hotel Balaji's case and held that the approach adopted in Goodyear India does not accord with the scheme, intendment and language of the relevant provisions of the Haryana and Bombay Acts and cannot be accepted. On the same very reasoning, the Apex Cou. upheld the validity of Section 4-B by observing that it is in substance similar to Section 9(l)(b) of the Haryana General Sales Tax Act. Similar provisions of Section 7-A of the Tamil Nadu, Act, Section 5-A of the Kerala Act and Section 4(6)(11) of the Bengal Finances (Sales Tax) Act, 1941 and Section 4(2)(I) of the West Bengal Sales Tax Act, 1954 have been held to be intra vires to the powers of the State Legislature.
7. Since the decision of Hotel Balaji v. State of Andhra Pradesh (supra) has been rendered after considering, almost all the earlier decisions rendered by the Apex Court and Ranganathan, J. was a member of the Bench which decided Goodyear India's case as well as Hotel Balaji's case, it will be useful to refer to the observations made by S. Ranganathan, J. in Hotel Balaji's case :-
"I am quite conscious that the conclusion I have expressed here as to the vires of the provisions impugned is contrary to the conclusion I reached in Goodyear (1990) 76 STC 71 (SC) (1990) 2 SCC 71 on somewhat analogous provisions. I need not, for the purposes of the present cases, express any final conclusion as to whether the conclusion in Goodyear (1990) 76 STC 71 (SC); (1990) 2 SCC 71 was rightly reached in the context of the provisions of the statutes there considered or would need a second look and fresh consideration in the context of what has been said here. But, I should not, I think, hesitate to accept the point of view now presented to us which appeals to me as more realistic, appropriate and preferable, particularly when I see that the view one way or the other would affect the validity of a large number of similar legislations all over India, merely because it may not be consistent with the view I took in Good-year (1990) 76 STC 71 (SC); (1990) 2 SCC 71. Consistency, for the mere sake of it, is no virtue. If precedent is needed to justify my change of mind, I may quote Bhagwati, J. (as he then was) in Distributors (Baroda) P. Ltd. v. Union of India (1985) 155ITR 120 (SC). We have given our most anxious consideration to this question, particularly since one of us, namely, P.N. Bhagwati, J., was a party to the decision in Cloth Trader's case (1979) 118 STR 243 (SC). But having, regard to the various considerations to which we shall advert in detail when we examine the arguments advanced on behalf of the parties, we are compelled to reach the conclusion that Cloth Trader's case (1979) 118 ITR 243 (SC) must be regarded as wrongly decided. The view taken in that case in regard to the construction of Section 80M must be held to be erroneous and it must be corrected. To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience. In this, we derive comfort and strength from the wise and inspiring words of Justice Bronson in Pierce v. Delameter (AMY at page 18); "a Judge ought to be wise enough to know that he is fallible and, therefore, ever ready to learn: great and honest enough to discard all mere pride of opinion and follow truth wherever it may lead: and courageous enough to acknowledge his errors."
For the reasons aforementioned, I agree with my learned brother and hold that the impugned provisions under all the three enactments are intra vires the powers of the concerned State Legislature."
8. The main judgment was written by B.P. Jeevan Reddy, J. with whom V. Ramaswami, J. agreed in the main judgment provisions relating to imposition of purchase tax in the Acts of Andhra Pradesh, Gujarat and Uttar Pradesh have been considered. Their Lordships referred to the Scheme of the three enactments in extenso and rejected all the grounds of challenge to the competence of the State Legislatures to enact those statutes for levy of purchase tax. In Part-V of the judgment correctness of the decision rendered in the Goodyear India's case was considered. Reference in the first instance was made to Section 9 of the State Act as it stood before being amended by the Haryana General Sales Tax Act (Amendment & Validation) Act, 1983 and as it stood after the amendment. Reference was also made to the three decisions of the High Court in Goodyear India Ltd. v. State of Haryana (supra), Bata India Limited v. State of Haryana (supra) and Desh Raj Pushap Kumar Gulati v. State of Punjab (supra). After noticing the arguments advanced on behalf of the various state counsel, the Court observed :-
"The crucial question, therefore, is what is the basis of taxation in either of the above provisions? In other words, the question is whether levy of tax is on the purchase of goods or upon the consignment of the manufactured goods? Let us first deal with section 9 of the Haryana Act (as amended in 1983). Properly analysed, the following are the ingredients of the section : (1) a dealer liable to pay tax under the Act purchases goods (other than those specified in Schedule B) from any source in the State and (ii) uses them in the State in the manufacture of any other goods and (iii) either disposes of the manufactured goods in any manner otherwise than by way of sale in the State or despatches the manufactured goods to a place outside the State in any manner otherwise than by way of sale in the course of a inter-State trade or commerce or in the course of export outside the territory of India within the meaning of Sub-section (1) of section 5 of the Central Sales Tax Act, 1956. If all the above three ingredients are satisfied, the dealer becomes liable to pay tax on the purchase of such goods at such rate, as may be noticed under section 15.
Now, what does the above analysis signify ? The section applies only in those cases where (a) the goods are purchased (for convenience sake, I may refer to them as raw material) by a dealer liable to pay tax under the Act in the State, (b) the goods so purchased cease to exist as such goods for the reason they are consumed in the manufacture of different commodities and (c) such manufactured commodities are either disposed of within the State otherwise than by way of sale or despatched to a place outside the State otherwise than by way of an inter-State sale or export sale. It is evident that if such manufactured goods are not sold within the State of Haryana, but yet disposed of within the State, no tax is payable on such disposition; similarly, where manufactured goods are despatched out of State as a result of an inter-State sale (sic) or export sale, no tax is payable on such sale. Similarly again where such manufactured goods are taken out of State to manufactures' own depots or to the depots of his agents, no tax is payable on such removal. Goodyear (1990) 76 STC 71 (SC); (1990) 2 SCC 71 takes only the last eventuality and holds that the taxable event is the removal of goods from the State and since such removal is to dealers' own depots/agents outside the State, it is consignment, which cannot be taxed by the State Legislature. With the greatest respect at our command, we beg to disagree. The levy created by the said provision is a levy on the purchase of raw material purchased within the State which is consumed in the manufacture of other goods within the State. If, however, the manufactured goods are sold within the State, no purchase tax is collected on the raw material, evidently because the State gets larger revenue by taxing the sale of such goods. (The value of manufactured goods is bound to be higher than the value of the raw material). The State Legislature does not wish to - in the interest of trade and general public tax - both the raw material and the finished (manufactured) product. This is a well-known policy in the field of taxation. But where the manufactured goods are not sold within the state but are yet disposed of or where the manufactured goods are sent outside the State (otherwise than by way of inter-state sale or export sale) the tax has to be paid on the purchase value of the raw material. The reason is simple: if the manufactured goods are disposed of otherwise than by sale within the State or are sent out of the State (i.e.- consigned to dealers' own depots or agents), the State does not get any revenuk because no sale of manufactured goods has taken place within Haryana. In such a situation the State says, it would retain, the levy and collect it since therqis no reason for waiving the purchase tax in these two situations. Now coming, to inter-State sale and export sale. It may be noticed that in the case of inter-State sale, the State of Haryana does get the tax revenue - may not be to the full extent. Though the Central sales tax is levied and collected by the Government of India, Article 269 of the Constitution provides for making over the tax collected to the States in accordance with certain principles. Where, of course, the sale is an export sale within the meaning of section 5(1) of the Central Sales Tax (export sale) the State may not get any revenue but larger national interest is served thereby. It is for these reasons that tax on the purchase of raw material is waived in these two situations. Thus, there is a very sound and consistent policy underlying the provision. The object is to tax the purchase by a manufacturer of goods whose existence as such goods is put an end to by him by using them in the manufacture of different goods in certain circumstances. The tax is levied upon the purchase price of raw material, not upon the sale price-or consignment value - of manufactured goods. Would it be right to say that the levy is upon consignment of manufactured goods in such a case? True it is that the levy materialises only when the purchased goods (raw materials) is consumed in the manufacture, of different goods and those goods are disposed of within the State otherwise than by way of sale or are consigned to the manufacturing dealer's depots/agents outside the State of Haryana. But does that change the nature and character of the levy? Does such postponement - if one can call it as such - convert what is avowedly a purchase tax which is on raw material (levied on the purchase price of such raw material) to a consignment tax on the manufactured goods? We think not. Saying otherwise would defeat the very object and purpose of section 9 and amount to its nullification in effect."
9. B.P. Jeevan Reddy, J. then examined the issue whether the nature of purchase tax would "change merely because the levy is on the happening or non-happening of subsequent event and proceeded to observe:-
"In several enactments, for instance, tax is levied at the last sale point or last purchase point, as the case may be. How does one determine the last purchase point in the State? Only when one knows that no purchase took place within the State thereafter. But that can only be known later. If there is a subsequent purchase within the State, the purchase in question ceases to be the last purchase. As pointed out pertinently by P.S. Poti, J. (as he then was) in Malabar Fruit Products Company v. Sales Tax Officer (1972) 30 S.T.C. 537, applying the logic of the dealers, it would not be possible to tax any goods at the last purchase point in the State, inasmuch as the last purchase point in regard to any goods could be determined only when the goods are sold later and not when the goods are purchased. In the said decision, the learned Judge was dealing with the validity and construction of section 5-A of the Kerala General Sales Tax Act, 1963, Sub-section (1) whereof read as follows:-
"5A. Levy of purchase tax : (1) Every dealer who in the course of his business purchases from a registered dealer or from any other persons any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 5, and either -
(a) consumes such goods in the manufacture of other goods for sale or otherwise; or
(b) disposes of such goods in any manner other than by way of sale in the State; or
(c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for that year at the rates mentioned in section 5".
One of the arguments urged against the validity of the said provision was that inasmuch as the tax is levied depending upon the mode in which the goods purchased are consumed, disposed of or despatched, the tax is really one in the nature of consumption tax or use tax, but not sales tax. This argument was answered by the learned Judge in the following words :
"According to me, this contention is based on a misconception of the scope of taxation on the sale of goods. It is true that sales tax is a tax imposed on the occasion of the sale of goods. But it has no reference to the point of time at which the sale or purchase takes place. It refers to the connection with the event of purchase or sale and not the point of time at which such purchase or sale takes place. To read it otherwise would render any retrospective imposition of sales tax invalid as, in every such case the tax would not be one which arises on the occasion of sale. By the same logic, it would not be possible to tax any goods at the last purchase point in the State, for the last purchase point in regard to any goods could be determined only when the goods are sold later and not when the goods are purchased. On the same reasoning as urged by counsel, one should say in such a case that since the goods are taxed only when the goods are sold outside the State or are despatched for such sale outside the State and so the last purchases are taxed not on the 'occasion' of the purchases and, consequently, it is beyond the competence of the Legislature. That certainly cannot be and the Supreme Court has held in the decision in State of Madras v. Narayanaswami Naidu (1968) 21 S.T.C. 1, that the goods are taxable in such cases in the financial year when they become the last purchases."
The decision of Poti, J. was affirmed by a Division Bench of the Kerala High Court in Yusuf Shabeer v. State of Kerala (1973) 32 S.T.C. 359. Both these, decisions were expressly referred to and approved by a three-Judge Bench of this Court in State of Tamil Nadu v. Kandaswami (1975) 36 S.T.C. 191. Kandaswami (1975) 36 S.T.C. 191 (SC) was concerned-with the construction of section 7-A of the Tamil Nadu General Sales Tax Act which too levied purchase tax and is couched in language similar to section 5-A of the Kerala Act. While dealing with the scheme of section 7-A, this Court quoted with approval certain passages from the judgment of Poti, J., including the following sentence.
"If the goods are not available in the State for subsequent taxation by reason of one or other of the circumstances mentioned in clauses (a), (b) and (c) of section 5A (1) of the Act then the purchaser is sought to be made liable under section 5-A."
This statement accords with our understanding of the scheme of section 9 of the Haryana Act as set out hereinabove. To repeat, the scheme of section 9 of the Haryana Act is to levy the tax on purchase of raw material and not to forego it where the goods manufactured out of them are disposed of (or despatched, as the case may be) in a manner not yielding any revenue to the State nor serving the interests of nation and its economy, as explained herein before. The purchased goods are put an end to by their consumption in manufacture of other goods and yet the manufactured goods are dealt with in a manner as to deprive the State of any revenue; in such cases, there is no reason why, the State should forego its tax revenue on purchase of raw material.
Another observation in Kandaswami (1975) 36 S.t.C. 191 (SC) relevant for the present purpose may also be noticed:
"It may be remembered that section 7-A is at once a charging as well as a remedial provision. Its main object is to plug leakage and prevent evasion of tax. In interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterated it from the statute book, should be eschewed. If more than one construction is possible, that which preserves its workability and efficacy is to be preferred to the one which would render it otiose or sterile. The view taken by the High Court is repugnant to this cardinal canon of interpretation."
In the light of the above scheme of section 9, it would not be right, in our respectful opinion, to say that the tax is not upon the purchase of raw material but on the consignment of the manufactured goods."
10. Expressing his disagreement with the reasoning of Mukharji, J. in Goodyear India's case, B.P Jeevan Reddy, J. observcd:-
"For the above reasons, we find it difficult to agree with the reasoning of Mukharji, J., in Goodyear (1990) 76 S.T.C. 71 (SC), (1990) 2 S.C.C. 71. It is also not possible to agree with the learned Judge when he says that "the two conditions specified, before the event of despatch outside the State as mentioned in section 9(1)(b), namely, (i) purchase of goods in the State and using them for the manufacture of any other goods in the State are only descriptive of the goods liable to tax under section 9(l)(b) in the event of despatch outside the State". When the tax is levied on the purchase of raw material, on the purchase price and not on the manufacture of goods or on the consignment value (such a concept is unknown to Haryana Act) or sale price of the manufactured goods - the above construction, in our respectful opinion, runs against the very grain of the provision and has the effect of nullifying the very provision. By placing the said interpretation, section 9 has been rendered nugatory; except for the two minor areas pointed out in Murli Manohar & Co. v. State of Haryana, (1991) 80 S.T.C. 79 (SC); (1991) 1 S.C.C. 377, the section - which has its parallels in all the State enactments - has practically become redundant. This was the main reason we undertook to reconsider the said decision which course we would not have ordinarily agreed to adopt. In our respectful opinion, the tax purports to be and is in truth a purchase tax levied on the purchase price of raw material purchased by a manufacturer. In certain situations (the three situations mentioned above, viz., sale of manufactured goods within the State, inter-State sale and export sale of manufactured goods) it is waived. In other cases, it is not."
11. While dealing with the argument that the issue should be referred to a larger bench in view of the apparent conflict of opinion expressed in Mukerian Papers Ltd.'s case on the one hand and Hotel Balaji's case on the other hand, their Lordships observed:-
"Mukerian Papers was decided by a Bench comprising Ranganath Misra, C.J., and two of us, M.N. Venkatachaliah, J. and A.M. Ahmadi, J. The only contention before the Bench was that the point arising therein was concluded by Goodyear and the Bench agreed with the said contention in the facts of that case. The correctness of Goodyear was not questioned before the Bench which fact was expressly recorded in the judgment. There was, therefore, no occasion for the Bench either to affirm or dissent from the decision in Goodyear. This aspect has been dealt with in para 101 of the decision in Hotel Balaji and we agree with it. Accordingly, we see no conflict between Hotel Balaji and Mukerian Papers.
Now coming to the merits of the contention, we are of the considered opinion that there is no reason to take a view different from the one taken in Hotel Balaji. All the contentions urged now have been considered and dealt with in the said decision. In our opinion, the approach adopted in Goodyear does not accord with the scheme, intendment and language of the relevant provisions of the Haryana and Bombay Act and cannot be accepted."
12. Although in the writ petitions the petitioners have challenged the vires of Haryana Act No. 1 of 1990, Haryana Act No. 4 of 1991 and Haryana Act No. 9 of 1993 by which State Act has been amended, at the time of hearing Shri R.R. Aggarwal confined his submission qua the challenge to the impugned notices and orders passed by the Assessing Authority. One of the contentions urged by Shri Aggarwal relates to the constitutional validity of purchase tax. Learned counsel argued that the levy of purchase tax interferes with the free trade and commerce and it is, therefore, ultra vires to the provisions of Article 301 of the Constitution. Shri Aggarwal submitted that the State of Haryana did not seek the sanction of the President as required by Article 304 (b) of the Constitution and, therefore, the levy of purchase tax is not saved by that Article. He relied on the decisions of the Supreme Court in Buxa Dooars Tea Company Limited v. State of West Bengal and Ors., (1989) 3 S.C.C. 211, Indian Cement and Ors. v. State of Andhra Pradesh and Ors., (1988) 1 S.C.C. 743, Weston Electronics and Anr v. State of Gujarat and Ors., (1988) 2S.C.C. 568, West Bengal Hosiery Association and Ors. v. State of Bihar and Anr., (1988) 71 S.T.C. 298 and Andhra Steel Corporation v. Commissioner of Commercial Taxes in Kamataka, A.I.R. 1990 S.C. 1912. The learned Advocate General, Haryana argued that this ground of challenge is no longer open to the petitioners because the same has been negatived in the decision rendered Goodyear India Limited v. State of Haryana and Anr., (1990) 2 S.C.C. 71.
13. In order to decide whether the levy of purchase tax under the State Act is ultra vires to the Article 301 of the Constitution and it is not saved by virtue of Article 304(b), we may reproduce Articles 301 and 304 of the Constitution, the same read as under: -
"301. Freedom of trade commerce and inter-course:- Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.
304. Restrictions on trade, commerce and intercourse among States:- Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law -
(a) impose on goods imported from other States (or the Union territories) any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and
(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:
Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President."
14. One of the earliest decisions of the Apex Court in which the provisions of Articles 301 to 304 were examined is Atiabari Tea Company Limited v. State of Assam, A.I.R. 1961 S.C. 232. By a majority decision a Constitution Bench of the Supreme Court held that Article 301 must be regarded as imposing constitutional limitation on the legislative powers of Parliament and the legislatures of the States. Their Lordships examined the provisions of Articles 255, 265, 297, 301 to 304 and held:-
"On a careful examination of the relevant provisions of Part XIII as a whole as well as the principle of economic unity which it is intended to safeguard by making the said provisions, the conclusion is inevitable that the content of freedom provided for by Article 301 was larger than the freedom contemplated by Section 297 of the Government India Act of 1935, and whatever else it may of may not include, it includes movement of trade which is of the very essence of all trade and is its integral part. If the transport or the movement of goods is taxed solely on the basis that the goods are thus carried or transported that directly affects the freedom of trade as contemplated by Article 301. But restrictions, freedom from which is guaranteed by Article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. In determining the limits of the width and amplitude of the freedom guaranteed by Article 301 a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its movement?"
15. The Apex Court went on to examine the constitutional authority of the Assam Taxation (on Goods carried by Roads or Inland Waterways) Act (13 of 1954) and held that the tax on goods solely on the ground that they are carried by road or by inland waterways within the area of the State impedes the freedom of trade and, therefore, it was ultra vires to Article 301 of the Constitution.
16. The question again fell for consideration Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan and Ors., A.I.R. 1962 S.C. 1406. By a majority judgment, the Supreme Court held that the regulatory measure or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and Such measures need not comply with the requirements of proviso to Article 304 (b) of the Constitution. The Supreme Court further held that the concept of freedom of trade, commerce and intercourse postulated by Article 301 must be understood in the context of an orderly society and as a part of the Constitution which envisages the distribution of powers between the states and the Union, and if so understood, the concept must recognise the need and the legitimacy of some degree of regulatory control, whether by the Union or the States. The Court further held :-
"It is not possible a priori to draw a dividing, line between that which would really be a charge for a facility provided and that which would really be a deterrent to a trade; but the distinction, if it has to be drawn, is real and clear. For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade. So long as a tax remains compensatory or regulatory it cannot operate as a hindrance."
17. In State of Kerala v. A.B. Abdul Kadir and Ors., A.I.R. 1970 S.C. 1912, a three Judges Bench of the Supreme Court held that before deciding whether an Act is saved by Article 304, it must be decided first whether the Act constitutes restriction directly or immediately hampering free flow of trade, commerce or intercourse. Their Lordships then examined the validity of the tax impdsed on Tobacco and other products under the Kerala Luxury Tax on Tobacco (Validation) Act, 1964 and held that such imposition did not obstruct the free flow Of trade and commerce. In taking this view the Supreme Court relied on the observations made in Atiabari Tea Company's case (supra), Andhra Sugars Ltd. v. State of Andhra Pradesh, A.I.R. 1968 S.C. 599 and State of Madras v. N.K. Nataraja Mudaliar, A.I.R. 1969 S.C. 147.
18. In State of Madras v. N.K. Nataraja Mudaliar, A.I.R. 1969 S.C. 147, the Constitution Bench considered the legality of the tax levied on the turnover of matches which were transferred to the assessee's depot at Ongole in the State of Andhra Pradesh from his place of business in the State of Madras. Majority judgment was delivered by J.C. Shah, J., as he then was. Two judges expressed their concurrence with the majority judgment. In the majority judgment scheme of the relevant provisions of the Central Sale Tax Act was discussed and reference was made to the decisions of the Supreme Court in Atiabari Tea Company Ltd. v. State of Assam (supra), Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan (supra), Andhra Sugar Limited v. State of Andhra Pradesh (supra) and it was then held :-
"An Act which is merely enacted for the purpose of imposing tax which is to be collected and to be retained by the State does not amount to law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, merely because of varying rates of tax prevailing in different States."
The Court further held:
"The Central Sales-Tax though levied for and collected in the name of the Central Government is a part of the sales-tax levy imposed for the benefit of the States. By leaving it to the States to levy sales-tax in respect of a commodity on intra-State transactions no discrimination is practised: and by authorising the State from which the movement of goods commences to levy on transactions of sale Central sales-tax, at rate prevailing in the State, subject to the limitation already set out, no discrimination can be deemed to be practised."
R. S. Bachawat, J., who recorded concurring opinion, held:
"On principle there is no distinction between a tax on intra-State and a tax on inter-State sales. An intra-State sale may occasion the movement of goods from one part of the State to another part of the same State. Indeed, normally, an intra-State sale would occasion such movement, because the purchaser has to move the goods from the seller's place to some other place. An intra-State sale may also be affected by a transfer of documents of title to the goods during their movement from one part of the State to another part of the same State. But, there can be no doubt that a tax on such sales would not normally offend Article 301. That Article manes no distinction between movement from one part of the State to another part of the same State and movement from one State to another. Now, if a tax on intra-State sale does not offend Article 301, logically, a tax on inter-State sale cannot also do so. Neither tax operate directly or immediately on the free flow of trade or the free movement of the transport of goods from one part of the country to the other. The tax is on the sale. The movement is incidental to and a consequence of the sale."
19. We may mention that the issue where levy of purchase tax is ultra vires to Article 301 of the Constitution was directly raised and decided in Goodyear India Limited v. State of Haryana (supra). In the appeals arising out of the decision of the Bombay High Court, one of the arguments advanced before the Apex Court was that the levy of purchase tax obstructs the free trade and commerce. While rejecting the challenge Supreme Court observed --
"It was further submitted by Dr. Pal that Section 13- AA of the Act is violative of Article 301 of the Constitution. It makes a discrimination between the dealer/manufacturer who despatches the goods outside the State and the other dealer/manufacturer. Both the dealer/manufacturers purchase the goods on payment of purchase tax and use them in the manufacture of taxable goods. The incidence of additional tax on the purchase of goods is attracted only when such manufactured goods are despatched outside the State. If a dealer/manufacturer has to despatch the goods outside the State, he has to pay a higher rate of tax and thus he is discriminated as compared to the other dealer/manufacturer who purchases the raw material on payment of 4 per cent purchase tax, but despatches the raw material straightaway outside the state and uses them in the manufacture of goods outside the State. The High Court held that there was no violation of Article 301 of the Constitution. Reference was made to the decision of this Court in Atiabari Tea Co. Ltd. v. State of Assam, A.I.R. 1961 S.C. 232, Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, A.I.R. 1962 S.C. 1406, Andhra Sugars Ltd. v. State of Andhra Pradesh, A.I.R. 1968 S.C. 599, State of Madras v. N.K. Nataraja Mudaliar, A.I.R. 1969 S.C. 147 and State of Kerala v. A.B. Abdul Kadir, A.I.R. 1970 S.C. 1912.
One has to determine : does the impugned provision amount to restriction directly and immediately on the trade or commerce movement? As was observed by this Court in Kalyani Stores v. State of Orissa, A.I.R. 1966 S.C. 1686, imposition of a duty or tax in every case would not tantamount per se to any infringement of Article 301 of the Constitution. Only such restrictions or impediments which directly or immediately impede free flow of trade, commerce and intercourse fall within the prohibition imposed by Article 301. A tax in certain cases may directly and immediately restrict or hamper the flow of trade, but every imposition of tax does not do so. Every case must be judged on its own facts and its own setting of time and circumstances. Unless the court first comes to the finding on the available material whether or not there is an infringement of the guarantee under Article 301 the further question as to whether the statute is saved under Article 304(b) does not arise. The goods taxed do not leave the State in the shape of raw material, which change their form in the State itself and there is no question of any direct, immediate or substantial hindrance to a free flow of trade. On the evidence adduced, we are in agreement with the High Court that the challenge to the imposition in the background of Article 301 cannot be sustained and, therefore no question whether such imposition is saved under Article 304(b) of the Constitution arises."
20. The principle of law which emerges from the aforementioned decision is that the tax imposed by the State would become ultra vires to Article 301 only if it directly impedes the free movement of goods within or outside the State. If the tax is on the sale of goods and the movement is only incidental or in consequence of sale the imposition of tax cannot be treated as ultra vires to Article 301 of the Constitution.
21. In the case in hand what is being charged from the petitioner No. 1 is the tax on the raw-material by it. The object of the impugned provisions is to tax the purchase of raw-material by the manufacturer which is used in the manufacture of goods. The law does not tax the sale of the manufactured goods or the despatch of the goods. It is, therefore, not possible to agree with Shri Aggarwal that the impugned levy impedes, hampers or obstructs the free flow of trade or commerce. The stage at which actual collection of tax is made may be postponed till the goods manufactured by the petitioner No. 1 are disposed of but that does not alter the nature of the tax. In fact the petitioners have not been able to show as to how such levy impedes the movement of goods manufactured by it and in the absence of any j evidence to show that the impugned levy affects the free flow of trade or business, it i cannot be held that Section 9 is violative of Article 301 of the Constitution. In our ' opinion, the principles enunciated by the Supreme Court in Andhra Sugar Limited's case (supra), State of Madras v. N.K Nataraja Mudaliar (supra) and the observations made by S. Mukharji, J. in Goodyear India Limited v. State of Haryana (which have been extracted above)fully apply to these cases. Therefore, levy of purchase tax cannot be dubbed as unconstitutional.
22. Now we shall refer to the decisions relied upon by Shri R.R. Aggarwal. Indian Cement and Ors. v. State of Andhra Pradesh and Ors., (1988) 1 S.C.C. 743 is a case in which preference given to the local manufacturers in the rate of sales tax was held to be contrary to the scheme of Part XIII of the Constitution on the ground that such preference affects the free trade and commerce. The Court held that the course of flow of trade is adversely affected by unfavourable treatment in the matter of taxation to those who were not local manufacturers.
23. In Weston Electronics and Anr. v. State of Gujarat and Ors., (1988) 2 S.C.C. 568, levy or lower rate of tax Under Section 49 of Gujarat Sales Tax Act on the goods manufactured locally and levy of higher rate of tax Under Section 7 of the Act on goods imported from outside the State was held to be discriminatory and violative of Articles 303 and 304 of the Constitution. The Apex Court rejected the argument that lower rate of tax was justifiable in view of Article 39(b) and (c). In West Bengal Hosiery Association and Ors. v. State of Bihar and Anr., (1988) 71 S.T.C. 298, the Apex Court struck down the notification issued by the Government of Bihar granting exemption from sales tax on hosiery goods manufactured within the State. The Apex Court held that such a discriminatory levy of sales tax was bound to affect the free flow of hosiery goods from outside States into the State of Bihar and would, therefore, amount to hampering the free flow of trade and commerce and, therefore, it was contrary to Article 301 read with Article 304 of the Constitution.
24. In Andhra Steel Corporation v. Commissioner of Commercial Taxes in Karnataka, A.I.R. 1990 S.C. 1912, Section 5(4) of the Karnataka Sales Tax Act, 1957 was partially declared violative of Article 304(a) because by that provision sale of finished goods manufactured out of imported raw-material was made taxable but the sale of finished goods manufactured out of locally purchased raw-material was exempted from tax. Their Lordships held that by adopting different yardsticks for taxing similar types of goods, the State created discrimination and, therefore, the provision was hit by Article 304(a).
25. In Buxa Dooars Tea Company Limited v. State of West Bengal and Ors., (1989) 3 S.C.C. 211, amendment made in the West Bengal Rural Employment and Production Act, 1976 whereby rural employment cess was sought to be levied on tea estates was challenged. Their Lordships held that rural employment cess ostensibly imposed in respect of tea estate was in fact a cess on the despatches of tea and as the same impeded the free movement of goods throughput the country, the amendment was violative of Article 301 and was not protected by Article 304(b): The Supreme Court held that the amended provision was beyond the legislative competence of the West Bengal Legislature. The Court further held that as the bill or amendment to the West Bengal Act had not been introduced or moved in the legislature of the State with the previous sanction of the President, the provisions of Article 304(b) were not attracted.
26. The aforementioned judgments relate to the cases in which different rates of tax were imposed on locally manufactured goods or locally purchased raw-material used in the manufacture of goods on the one hand and the imported goods/raw-material on the other hand or where the tax was on the despatch of consignment. Therefore, none of them has got any bearing on the point raised in these petitions. The argument of Shri Aggarwal that the observations made by the Supreme Court in Goodyear India Limited v. State of Haryana (supra) should be read as confined to the interpretation of Section 13-AA of the Bombay Sales Tax Act, 1957 is also unacceptable. The Supreme Court was dealing with the provisions contained in the Haryana Act as well as the Bombay Act regarding levy of purchase tax and, therefore, the conclusion recorded in the context of challenge to the imposition of purchase tax on the ground of violation of Article 301 squarely applies to the interpretation of the Haryana Act as well as the Bombay Act. We, therefore, do not find any merit in the challenge to the provisions of Section 9 on the ground of violation of Article 301 of the Constitution.
27. The other argument advanced by Shri Aggarwal is that the impugned notices and orders are void because the Assessing Authority had no jurisdiction to pass these orders after the expiry period of limitation specified in Section 31 of the Haryana Act. Shri Aggarwal produced a statement before us during the course of hearing to support his argument that the period of limitation enumerated in section 31 had expired long before the initiation of proceedings vide notices dated 21.7.1986. He forcefully argued that the Assessing Authority has acted illegally in passing the order of re-assessment without considering the objection of limitation raised before it on behalf of the petitioner. Shri Aggarwal further argued that the provisions of Section 32 cannot be invoked by the respondents to justify the order of re-assessment because the conditions specified for the exercise of power Under Section 32 do not exist in these cases. He relied on the following, decisions
(i) 5.5. Gadgil v. Messrs. Lal and Company, A.I.R. 1965 S.C. 171;
(iii) Commissioner of Income Tax, U.P. v. Mohd. Shakoor Mohd. Bashir, (1973) 89 I.T.R., 57; and
(iv) Rajinder Nath v. Commissioner of Income Tax, Delhi, (1979) 120 I.T.R. 14.
28. Learned Advocate General, Haryana argued that orders of assessment were quashed by the Court in Goodyear India Limited v. State of Haryana 53 S.T.C. 163 with liberty to the department to pass fresh orders and, therefore, the period of limitation specified in Section 31 cannot be applied qua the orders impugned in these writ petitions. He argued that re-assessment pre-supposes existence of an order of assessment validly passed and as the High Court and the Supreme Court quashed the assessment orders in these cases, the impugned orders cannot be treated as fresh orders of assessment. He further argued that the theory of relation back should be applied to the orders which have been passed keeping in view the fact that the earlier orders were quashed by the High Court and thereafter the legislature had amended the provisions of Section 9 which were upheld in Desh Raj Pushap Kumar Gulati's case (supra).
29. Before dealing with the rival contentions, it will be useful to take notice of the contents of one of the orders impugned in these petitions. Annexure P-9 which is subject matter of challenge in Civil Writ Petition No. 6646 of 1986 relates to the assessment year 1973-74. Perusal of this order shows that in the first place the Assess ing Authority has taken notice of the decision of the High Court; passed in Goodyear India Limited v. State of Haryana, 53 S.T.C. 163. It then referred to the provisions of section 9(1), along with the amendments made in it and the decision of the Full Bench in Desh Raj Pushap Kumar Gulati v. State of Punjab (supra) and observed that while allowing the writ petition in 53 S.T.C. 163, the High Court did not debar the State to levy purchase tax and rejected the argument raised on behalf of the petitioner that the levy was contrary to Section 9 or Section 15 of the Act. From this order, it is clear that the petitioner did not raise the plea of limitation before the Assessing Authority. However, in the writ petition one of the grounds raised by the petitioners for challenging the impugned order is that the same is barred by limitation specified in Section 31. Since the question of limitation has been raised in the writ petitions, we do not deem it proper to refuse adjudication of the point raised by the petitioners simply because such plea was not raised before the Assessing Authority.
30. We shall now refer to Sections 31 and 32 of the Haryana Act which read as wider:- Section 31 as it stood before its amendment vide Act No. 1 of 1988:-
"Re-assessment of tax: It in consequence of definite information which has come into his possession, the assessing authority discovers that the turnover of the business of a dealer has been under-assessed or has escaped assessment in any year, the assessing authority may, at any time within five years following the close of the year for which the turnover is proposed to be reassessed and after giving the dealer a reasonable opportunity, in the prescribed manner, of being heard, proceed to re-assess the tax payable on the turnover which has been under assessed or has escaped assessment.
Section 31 as it stands after amendment vide Act No. 1 of 1988 (effective from 1.1.1988):
Reassessment; If in consequence of definite information which has come into his possession, the assessing authority discovers that the turnover of the business of a dealer has been under assessed or has escaped assessment in any year, the assessing authority may, at any time within three years from the date of the final assessment order and after giving the dealer a reasonable opportunity in the prescribed manner, of being heard, proceed to reassess the tax payable on the turnover which has under-assessed or has escaped assessment.
Period of limitation for completion of Assessment or Re-assessment not to apply in certain cases: (1) Notwithstanding the provision relating to the period of limitation contained in Section 28, Section 29 or Section 31 or in any other provision of this Act assessment or re-assessment may be made at any time in consequence of, or to give effect to, any order made by any court or other authority under this Act.
(2) Where the assessment proceedings relating to any period, remained stayed under the orders of any court or other authority for any period, such period shall be excluded in computing the period of limitation for assessment or re-assessment specified in Sections 28 and 29 or Section 31 or in any other provision of this Act."
31. Section 31 as it stood upto 31.12.1987 empowered the Assessing Authority to re-assess the tax payable on the turnover of the assessee within five years following the close of the year for which the turnover is proposed to be re-assessed. After its amendment vide Act No. 1 of 1988, this power can be exercised by the Assessing Authority at any time within three years from the date of the final assessment order. However, for exercising the power Under Section 31, the following conditions must be satisfied :-
(a) The Assessing Authority, on the basis of definite information which has come into its possession, discovers that the turnover of the business of a dealer has been under assessed or has escaped assessment in any year ;
(b) Reasonable opportunity of being heard is given to the dealer in the prescribed manner.
32. Section 32 declares that notwithstanding the provision relating to the period of limitation contained in Sections 28,29 or 31 or any other provision of the Act, assessment or re-assessment may be made at any time in consequence of, or to give effect to any order made by the Court or other authority under this Act. Sub-section (2) of Section 32 further declares that the period during which assessment proceedings remained stayed under the orders of the Court or other authority shall be excluded in computing the period of limitation for assessment or re-assessment as specified in Sections 28, 29 or 31 or any other provision of the Act. The use of nonobstante clause in Section 32(1) unequivocally brings about the legislative intendment, namely, that there should be no period of limitation for assessment or re-assessment which is required to be made in consequence of or to give effect to any order made by any Court or by other authority under the provisions of the Act. A non-obstante clause is ordinarily appended to a section with a view to give the enacting part of the section overriding effect over the provisions mentioned in that section. It means that in respect of the provisions mentioned in the non-obstante clause, the enactment following it will have its full operation. However, sometimes the non-obstante clause has also been read as clarifying the whole provision and not cutting down the scope of other provision of the statutes.
33. In so far as these cases are concerned the non-obstante clause contained in Section 32(1) deserves to be given full effect because the very object of enacting Section 32(1) is to remove hurdle of limitation in the making of assessment or re-assessment which may be necessitated as a consequence of or with a view to give effect to any order made by the Court or other authority. In our opinion, Section 32(1) takes within its fold all those cases in which the assessment or re-assessment made by the competent authority is quashed by the Court on account of any illegality or irregularity or due to striking down the provision of law under which the assessment has been made. Therefore, in cases where the Court quashes the assessment or reassessment and does not restrain the competent authority framing fresh proceedings, the period of limitation specified in Section 31 does not apply. We, therefore, do not find any merit in the argument of Shri Aggarwal that the impugned assessments should be quashed on the ground that the same are barred by limitation. We are also of the opinion that provision of Section 31 cannot be invoked for challenging the impugned assessment because this is not a case in which the Assessing Authority has received certain information disclosing under-assessment of the turnover nor it is a case where the Assessing Authority has proceeded on the premise that the turnover of the assessee has escaped assessment. Rather these are cases in which the Assessing Authority has taken proceedings in accordance with the State Act and has passed orders for levy of purchase tax which were nullified at one stage by this Court. When the High Court quashed the assessment made by the competent authority, the order of assessment became non-existent and the Assessing Authority was within its jurisdiction to take "proceedings for passing fresh order of assessment keeping in view the amendment made in the State Act as well as the decision of the Full Bench in Desk Raj Pushap Kumar Gulati.
34. The decision of the Supreme Court in S.S. Gadgil's case (supra) relied upon by Shri Aggarwal relates to the interpretation of Section 34(1)(b) and proviso (iii) thereto and Section 18 of Finance Act, 1956. Their Lordships held the period prescribed by Section 34 for Assessment is not a period of limitation but it imposes a fetter upon the power of the Income Tax Officer to bring to tax escaped income.
35. In Income Tax Officer v. Induprasad (supra), the Apex Court interpreted the provision of Section 34 of the Income Tax Act, 1922 and Sections 297(2)(d)(ii) and 148 of the Income Tax Act, 1961. Their Lordships held that the assessment which has become time barred under the old Act cannot be revived Under Section 297(2)(d) of the new Act.
36. In Commissioner of Income Tax v. Mohd. Shakoor Mohd. Bashir (supra), their Lordships of the Supreme Court once again interpreted Section 34 of the Income Tax Act, 1922 and discussed the meaning of the expression 'finding' and 'direction' used in Section 34(3).
37. In Rajinder Nath v. Commissioner of Income Tax (supra) the Supreme Court also interpreted the provisions contained in Sections 147 and 15 3 which uses the words 'direction' and 'finding'.
38. In none of the aforementioned decisions their Lordships considered a provision parallel to Section 32 of the State Act and, therefore, the principles laid down in those cases while interpreting the provisions of the Income Tax Act, 1922 and Income Tax Act, 1961 do not have any bearing on the interpretation of Sections 31 and 32 of the Act nor can they be read as curtailing the scope of amended Section 9 of the Act. We, therefore, hold that the impugned orders cannot be quashed on the ground that they are barred by limitation.
39. Before concluding, we may mention that although the petitioners have challenged the vires of the amendment made in the Haryana Act no argument was advanced on that point during the course of hearing.
40. For the reasons mentioned above, the writ petitions are dismissed with costs of Rs. 10,000/- (each petition). The interim orders passed by this Court automatically stand vacated and respondents shall now recover the amount of tax alongwith interest from the petitioners.