LexM/S. JAY VEE RICE AND GENERAL MILLS versus STATE OF HARYANA AND ORS.
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I A B ··- ... .• ; .... -.·[2010) 1.1 S.C.R 1040 .. J ,. . . .·: J. ; .• ::.· - M/S. JAY VEEiRICEAND;GENERAL MILLS,.,.·:: - · -.:--.i:· ·,-:~>!··~ ;V.-:; ~ - . :,.:~;cc•::;_::;-:_,,"'.:-; .. ·.; 1 ~/' ! STATE OF HARYANA AND ORS. : (Civil Appeal No.823E)_of_2010) . ,', '' v '• '_:_, \;- '.._: •• •~ ' ',IJ ··~. t.·.: ~:·.'._i,;·_, ~ .. ; ! .~.- ..,: •. ;> ,,,;-;,·~.: SEPTEMBER 23, 20~0 ( .. [DR. MUKUNDAKAM SHARMA AND. ANIL . R. DAVE, JJ.] ' Tax/Taxation:. Unjust enrichment - Supply of rice - C Exemption granted to assessee-supplier from payment of sales tax :::. While supplying rice, assessee collected purchase tax .:.. Retention of purchase tax by the assessee - Permissibility - Held: Tax so collected is required to be deposited Jn the government treasury - Retention of such D purchase tax would amount to unjust enrichment which is not permissible - Haryana Sales Tax Rules, 1975 - r.28A -' ' , Haryana Government Notification dated 17. 10. 1996 - Haryana Rice Procurement Levy Order, 1985 - Clause 2(i); __ __ Schedule Ill, Note (i) - Haryana General Sales Tax Act, 1973. E Assessee~companies were engaged in the business of purchase of paddy and manufacture of rice therefrom. ·They were registered under the Haryana General Sales Tax Act,1 1973 and.were granted exemption from. the payment of sales tax under Rule 28A of the Haryara F General Sales Tax Rules, 1975_for a period of seven years with effect from 3.10.1995. By Haryana Government Notification dated 17.10.1996, an amendment was made in Schedule Ill to the Haryana Rice Procurement Levy ·-.... G H Order, 1985. By ,virtue of the said amendment, the appellants while supplying--rice to District Food and Supplies Controller (DFSC) received price of rice inclusive of_ purchase tax. The assessing authority completed assessment for the year 1996-97. While doing so, no purchase tax was levied since assessee were 1040 • JAY VEE RICE AND GENERAL MILLS v.STATE OF 1041 HARYANA AND ORS. granted exemption but· in the assessment order, it was, A held that since they had collected purchase tax on paddy -· from DFSC as part of procurement price, they were -· ., --.. : "' , •, . i - . - - required to deposit the tax so collected in the government treasury. _The order of assessment was upheld by the first appellate authority and the tribunal. The assessees' filed ·s writ petitions before' ttie High c·ourt \vhich were dismissed. Aggrieved, the assessees filed the. instant appeals.·· - .. - .. ~.--::.,:.-:·.\ ;''!·-~·~--< - ~- ~- :-,:.';~.'/'. Dismissing th7_ ;;ippe~l~~,t~e Court --..________ C . ' . ' i ! . .: .. _ ' . ,.· . ' -. t .- • ' • • -. • •• • • HELD: 1. Note (i) in the Schedule Ill to"the Notification • dated 17.10.1996 makes it clear that the assessees while supplying rice. to' DFSC collected purchase tax amongst other things by way of the procurement price; Since the assessees had collected the purchase fax whiie D supplying rice to DFSC, they were required to deposit the same in the government exchequer and there could be no justification _for them to_ retain the purcha~e 1tax and appropriate the same to their own use. Retention _of such purchase tax collected by the appellants would amount E to unjust enrichment which· is not 'permissfble.· Even when the· legality of a tax is challenged successfully; · t_here_can be no ques_tion of the said tax being retained by the dealer/manufacturer; notwithstanding its illegality. In the facts and circumstances of the instant case, the · F court is not. required to go into the other issue as to whether or not there ·c'ould have been levy of purchase tax on .tti_e purchase· of. paddy in case of exempted· units. The question_ is kept open to be decided in an appropriate cas'e)[Paras 17, 18, 25, 26][1046-H; 1047~A~8;"1'65o~c-E] G r . . ~ .... Mafatlal Industries Ltd.· and Others v. Union of India and Ors. (1997) 5 SCC 536; Sahakari Khand Udyog Manda/ Ltd. v. CCE & Customs (2005) 3 SCC 738; Orient Paper Mills Ltd. v. State ofOrissa & Ors. 'AIR.1961SC1438; GodfreyPhillips H 1042 SUPREME COURT REPORTS [2010] 11 S.C.R. A India Ltd. & Anr. v. State of U. P & Ors. (2005) 2 SCC 515 - relied on. B c Case Law Reference: (1997) 5 sec 536 relied on Paras18, 21 (2005) 3 sec 738 relied on Para 19 AIR 1961 SC 1438 relied on Paras 20, 21 (2005) 2 sec 515 relied on Paras 22, 25 CIVIL APPELLATE JURISDICTION : Civil Appe
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