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2006 DIGILAW 4047 (PNJ)

STATE OF PUNJAB v. HINDUSTAN PETROLEUM LTD.

2006-10-18

ADARSH KUMAR GOEL, RAJESH BINDAL

body2006
JUDGMENT Rajesh Bindal, J. - The following questions of law have been referred for opinion of this court by Sales Tax Tribunal, Punjab (for short, "the Tribunal") arising out of its common order dated May 29, 1996 passed in Appeal Nos. 4, 6, 7 and 8 of 1995-96 (relating to years 1986-87, 1988-89, 1991-92 and 1993-94) Misc. (Rect) Nos. 13, 15, 17 and 19 of 1995-96 (relating to assessment years 1987-88, 1989-90, 1990-91 and 1992-93), and Misc. (Rect) Nos. 236 and 237 of 1994-95 (relating to assessment years 1984-85 and 1985-86) : "(a) Whether the honourable Tribunal was correct in law in following the judgment of the honourable Supreme Court of India reported in State of Maharashtra v. Britannia Biscuits Company Limited [1995] 96 STC 642 and in creating distinction in judgment of the Supreme Court of India reported in Punjab Distilling Industries Ltd. v. Commissioner of Income-tax [1959] 35 ITR 519, wherein the transfer of bottles against security deposits has been held as transactions of sale ? On this anology, whether the transaction of supply of cylinder and pressure regulators against security to the consumer are covered by definition of 'sale' ? (b) Whether, on the facts and circumstances of the case, the General Sales Tax Reference No. 23 of 1985 of the Punjab and Haryana High Court (division Bench) in the case of Punjab Breweries Limited v. State of Punjab reported in [1993] 90 STC 211 is applicable in the instant case, holding that the present transaction in question amounts to sale ? (c) Whether the honourable Tribunal has correctly interpreted vide its order dated May 29, 1996, the provision of the Punjab General Sales Tax Act, 1948 read with section 19(1) and section 14(8) of the Sale of Goods Act, 1930 and the provision of Cylinder Rule 1981 and having regard to the terms and conditions of agreement between the respondent and customer ? (d) Whether the honourable Tribunal was correct in law in holding that the security deposit collected from the L.P.G. customers is not part of sale turnover and not exigible to levy of sales tax under the Punjab General Sales Tax Act, 1948 ? (d) Whether the honourable Tribunal was correct in law in holding that the security deposit collected from the L.P.G. customers is not part of sale turnover and not exigible to levy of sales tax under the Punjab General Sales Tax Act, 1948 ? (e) Whether the honourable Tribunal was correct in law in holding that the decision of the honourable Supreme Court reported as State of Maharashtra v. Britannia Biscuits Company Limited [1995] 96 STC 642 actually changed the situation and was sufficient ground for the rectification of mistake, when honourable Tribunal in order dated April 27, 1994 which now stands rectified, has already recorded specific finding that in view of the facts and circumstances of the case, the consumer was under no obligation to return the cylinder to the respondent because the agreement being relied by return of cylinder and pressure regulators and created no liability on the customer to return the same within a stipulated period ?" Brief facts as have been noticed in the statement of case are that the respondent - assessee, a registered dealer under sales tax laws, is a Central Government undertaking and engaged in the resale of petroleum products and insecticides/finits including L.P.G. cylinders marketed by it through various distributors. The Assessing Authority, Jalandhar framed assessments of the respondent - corporation for the years 1984-85, 1985-86, 1986-87 on September 20, 1989, January 9, 1990 and March 27, 1991 respectively and created additional demand of Rs. 8,52,128, Rs. 3,47,776 and Rs. 39,228 for the respective years. The Assessing Authority, Jalandhar, treated the supply of cylinders and pressure regulators as a sale. Against these orders, the respondent - assessee filed appeals before the Deputy Excise and Taxation Commissioner (A), Jalandhar, which were dismissed by him on October 13, 1993. Against the order of the Deputy Excise and Taxation Commissioner (A), the respondent - assessee filed appeals before the Tribunal which were dismissed by the Tribunal on April 27, 1994 relating to the assessment years 1984-85 and 1985-86. Rectification applications filed by the respondent - corporation for the years 1984-85 and 1985-86 were accepted by the Tribunal and earlier order for the years 1984-85 and 1985-86 were rectified and appeal for the year 1986-87, which was lying pending before the Tribunal, was accepted vide order dated May 29, 1996. Present proceedings arise out of orders of the Tribunal referred to above. Present proceedings arise out of orders of the Tribunal referred to above. The Tribunal has further referred to pendency of C.W.P. Nos. 8013 of 1995 and 7913 to 7916 of 1995 filed by Indian Oil Corporation involving similar issues while referring above questions of law for opinion of this court. It could not be disputed before us that the issue involved in the present reference has already been gone into by a division Bench of this court in Indian Oil Corporation Ltd. v. Excise and Taxation Officer, Ambala Cantt., Ambala [2000] 117 STC 333, wherein on a consideration of identical facts, it was held that no sales tax is exigible on the amount of refundable security deposits received from customers against cylinders/regulators at the time of release/sanction of connection as the sales are only a mode of carrying gas. The writ petitions in the case of Indian Oil Corporation, relying upon the pendency of which, questions of law were referred to this court for opinion, have also been decided by this court in favour of Indian Oil Corporation (Indian Oil Corporation Limited v. Excise and Taxation Officer-cum-Assessing Authority [1999] 114 STC 282 (P&H)) vide judgment dated January 8, 1999. For the reasons stated in Indian Oil Corporation's case [2000] 117 STC 333 (P&H), we answer the question against the Revenue and in favour of the assessee while holding that no sales tax is exigible on the amount of refundable security deposits received from customers against cylinders/regulators at the time of release/sanction of connection as the same are only a mode of carrying gas. The reference is disposed of accordingly.