K.B. HANDICRAFTS EMPORIUM AND ORS. ETC. versus STATE OF HARYANA AND ORS.

Citation: [1993] 3 S.C.R. 454 · Decided: 28-04-1993 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Disposed off
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Judgment (excerpt)

A 
K.B. HANDICRAFfS EMPORIUM AND ORS. ETC. 
v. 
STATEOFHARYANA AND ORS. 
APRIL 28, 1993 
B 
[B.P. JEEVAN REDDY AND N. VENKA TACHALA, JJ.] 
. Haryana General Sales Tax Ac~ 1973: 
Sections 9. 24 read with Rule 21, ST Form-15, the Haryana General Sales 
Tax Rules and read with Section 5 (1) of the Central Sales Tax Act and Form A of 
C 
the General Sales Tax Rules-Raw material purchased within Haryana-Sale of 
manufactured goods ow of such raw material to dealers at Delhi, who exports 
them-Purchase tax whether leviable. 
D 
E 
F 
Constitution of India. 1950: 
Article 32-Writ Petition-Whether a particular sale is intra-State sale; 
inter-State sale or export sale-Supreme Court cannot determine in writ jurisdic-
tion. 
W.P.(C) No. 983511983 
Petitioners-firms were registered sales tax dealers. They manufactured 
and sold·handicraft items. As they purchased raw material within the State 
against declaration forms ST-15 prescribed under Rule 21 of the Haryana 
General Sales Tax Rul~ read with Section 24 of the Haryana General Sales 
Tax Act, p~rchase tax was not paid. 
The petitioners sold the items of handicrafts to dealers in Delhi who 
exported the same out of India. As the Delhi dealers issued Form H, pre-
scribed under the Cectral Sales Tax Rules, they did not pay tax on the said 
sale/purchase. 
G 
Following the High court decision in M/s, Murli Manohar and Company, 
Panipat& ors. v.State o/Haryana& Ors. C.W. P. No.1227 of1980. The Sales 
Tax Authorities levied purchase tax u/s 9 of the Haryana General Sales Tax 
Act for the assessmment years in question on the purchase of raw material 
made by the petitioners, computing the tax with reference' to the purchase 
value of the goods exported against Form H. 
H 
Hence the present writ petition before this Court was filed challenging 
454 
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HANDICRAFfS EMPORIUM l'. STATEOFHARYANA 
iss 
the impugned order of levying purchase tax. 
Meanwhile this court allowed the appeals preferred against the decision 
of the High Court in Murli Manohar and Company's case, setting aside the 
judgment of the High Court. 
As a common question arose in this batch of writ petitions, all petitions 
heard together. 
The petitioners contended that in view of the decision of this Court in 
Murli Manohar 1991 [1] SCC 377, the writ petitions were to be allowed. 
Disposing of the writ petitions, this Court, 
. 
" 
HELD: 1.1 .. The decision in Murli Manohar says that there can be only 
three types of sales, namely, intra-State sales, inter~state sales and export 
sales and no other. A sale to an exporter would be either aQ, ilitra-state sale or 
an inter-state sale; in either case, the decision says, it does not attract the 
purchase tax (on raw material) under Section 9 of the Haryana General Sales 
Tax Act. However, in the light of the decision in Hotel Balaji, it must be held 
that there is one more category in addition to the three categories mentioned 
a hove. The fourth category is where a dealer in Haryana takes his goods out 
A 
B 
c 
D 
of' Haryana (without effecting a sale, within the State), and effects the sale in 
E 
the other State. According to Section 9 of the Hary:.ma Act, as explained in 
Hotel Balaji, purchase tax can be levied and collected on the raw material 
purchased by the manufacture within Haryana, . which was utilised for 
manufacturing the goods so sold in the other State. (458-D-F) 
Mur/i Manohar case. [1991) 1 S.C.C. 377, followed. 
Good year India l.Jd. and Ors. v. State of Haryana and Anr. (1990] 2 S.C.C. 
7l, referred to. 
· HotelBalajiandOrs. etc. etc. v.Stateof AndhraPradesh & ors. etc. etc.J.T. 
(1992) 6'S.C.182 explained 
2.1. In a petition under article 3'.2° of the Constitution it is not the 
province of the Supreme Court to go into facts. As repeatedly emphasised 
by this Court, the question whether a particular sale is an intra-State sale, 
an inter state sale, an export sale within the mealiing of Section 5(1) or a 
F 
G 
H 
456 
SUPREME COURT REPORTS 
(1993) 3 S.C.R. 
A 
penultimate sale within the meaning of section 5(3), or otherwise, is always a 
question of fact to be decided by the appropriate authority in the light of the 
principles enunciated by Courts. (459-C) 
2.2. In these circumstances, it is directed that the matters be disposed of 
by the authorities under the Act in the light of the law declared by this Court 
B 
in Murli Manohar, Hotel Balaji and in this judgment. (459-D) 
c 
ORIGINAL JURISDICTION: Writ Petition (c) Nos. 9835-38of198
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