M/S DEVI DASS GOPAL KRISHAN PVT. LTD. ETC. ETC. versus STATE OF PUNJAB AND ANR. ETC. ETC.

Citation: [1994] 3 S.C.R. 417 · Decided: 08-04-1994 · Supreme Court of India · Bench: M.N. VENKATACHALIAH · Disposal: Disposed off
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

MIS. DEVI DASS GOPAL KRISHAN PVT. LTD. ETC. ETC. 
A 
v. 
STATE OF PUNJAB AND ANR. ETC. ETC. 
APRIL 8, 1994 
B 
[M.N. VENKATACHALJAH, CJ. A.M. AHMADI AND B.P. 
JEEVAN REDDY, JJ.] 
Punjab General Sales Tax Act, 194&-Section 4B-Held valid. 
Tamil Nadu Sales Tax Act-Section ?A-Held Valid. 
Kera/a Sales Tax Act-Section SA-Held valid. 
West Bengal Sales Tax Act, 1941/1954-Sections 4(2)(i)/Section 
4(b )(ii )-Held valid. 
c 
Bombay Sales Tax Act, 1959/Act 2 of 1991>-Section 13AA-Held valid. D 
., 
Sales Tax-Levy of Purchase Tax by States on goods purchased by a 
1 , 
dealer for use within the State for manufacture of goods and disposing of such 
manufactured goods to a place outside the State in any manner otherwise 
than by way of sales in the course of inter-State trade or commerce or in the E 
course of export outside the tenitory of India-Held valid. 
The dealers from the States of Punjab, Kerala and Tamil Nadu 
challenged the validity of Sections 4B, 4(2)(i) and Section 7A respectively 
in their State Sales Tax Acts by which purchase tax was sought to be levied 
on purchases of any goods for being used as raw material in the manufac-
F 
ture of goods which were disposed of by the manufacturer in a manner 
other than by way of sale in the State or by way of sale or purchase in the 
course of inter-State trade or commerce, or in the course of export from 
India. 
Following the decision in Good Year's case 1990 (2) SCC 71, the West G 
Bengal Tribunal held that Section 4(6) (ii) and 4(2)(i) of the West Bengal 
Act were 
ultra vires. The State Legislature thereafter amended the 
provision 4(6)(ii) and snbstitnted clause (i) in Section 4(2). This amended 
provision was struck down by the High Court West Bengal following the 
judgment in Good Year. 
H 
417 
A 
B 
418 
SUPREME COURT REPORTS 
[1994] 3 S.C.R. 
Similarly, after the judgment in Good Year's case holding that 
Section 13AA of the Bombay Sales Tax Act, 1959, was beyond the com-
petence of the State Legislature, an Amendment Act was passed substitut-
ing Section 13AA. Writ Petitions filed by various dealers challenging the 
new provision were allowed by the High Court of Bombay. Hence appeals 
were filed by the States of West Bengal and Maharashtra. 
The dealers contended that the reasoning and approach adopted and 
conclusion arrived at in Good Year is the correct one that the decision in 
1 
Hotel Balaji needed re-consideration, that the decision in Hotel Baloji being 
in conflict with Mukerian papers, these matters should be placed before a 
C larger bench to resolve the conflict between Hotel Balaji and Mukerian 
Papers, that the text of taxable event adopted in Good Year is correct 
whereas the ratio in Hotel Balaji has the effect of taxing the despatch of 
manufactured goods though purporting to tax the purchase of raw 
material, that the nexus, if any, between the purchase of raw material and 
D the point of levy is absent where the tax is levied at the stage of despatch 
of mannfactured goods beyond the state and that there can be no levy on 
non-existent goods. 
E 
Dismissing the writ petition and appeals by the dealers and allowing 
I 
the appeals filed by the States, this Court 
HELD : 1. Section 4B of the Punjab Act is in substance similar to 
Section 9(1)(b) of Haryana Sales Tax Act. Validity of Section 4B of the 
Punjab Act is sustained. It cannot be said to be beyond the competence of 
the State Legislature. (423-D) 
F 
2. Section SB of the Kerala Act and Section 7 A(l) of the Tamil Nadn 
Act are similar to Section 6A of the A.P. Act which has been upheld in 
Hotel Balaji. Their validity is sustained. (424-CJ 
3. Section 4(2) (i) of the West Bengal Sales Tax Act, 1941 and section 
G 4(6) (ii) of the Amended Act of 1954 are valid. [ 425-C; 426-F) 
Rasoi Limited v. State of West Bengal and others, (1991) 80 STC 356, 
reversed. 
Chloride Industries Ltd. v. Commissioner of Commercial Taxes, 
H Government of West Bengal and others, overruled. 
·-?' 
• _,_ 
) 
1 
DEVIDASSGOPALKRISHANLTD. v.STATE[JEEVANREDDY,J.] 419 
4. Section 13AA as substituted by the Bombay Sales Tax (Amend-
A 
ment) Act 2 of 1990 is perfectly valid and competent piece oflegislation. 
[427-A-E] 
S. There is no conflict between Hotel Balaji and Mukerian Papers. The 
law laid down in Good Year does not represent the correct view oflaw. 
[426-FJ B 
Hotel Balaji & Ors. v. State of A.P. & Ors., (1993) 88 S.T.C. 981, relied 
on. 
Good Year India Ltd. v. State of Haryana, [1990] 2 S.C.C. 71, disa
Excerpt shown. Read the full judgment & AI analysis in Lexace.