Ms Ajay Pal Singh vs. Appellate Authority

Held

The Court held that the Himachal Pradesh Tax Tribunal had no authority or jurisdiction to make a reference to the High Court under Section 33(1) of the HPGST Act, 1968, when the issues raised were already covered by previous decisions of the High Court and the Supreme Court. Specifically, the issue of whether Khair wood falls within the definition of timber or converted timber had been decided by a Division Bench of the Himachal Pradesh High Court in *Kartar Singh Versus State of H.P. and Others*, following the judgment of the Punjab & Haryana High Court in *Panwar Timbers Versus State of Punjab*. The Court also noted that the issues were subject matter of Supreme Court cases *Mukesh Kumar Aggarwal & Co. Versus State of M.P. & Others* and *State of Himachal Pradesh Versus Ganesh Wood Products*. Consequently, the references were rejected. The Court directed the Tribunal to re-consider the matters in light of the cited decisions and pass appropriate orders. For STR No. 1 of 2012, the Court directed the Tribunal to decide the question regarding the 30-day grace period under section 4(2) of the HP GST Act, 1968, in accordance with law, as this question was within the Tribunal's jurisdiction.

Facts

These are two appeals before the Himachal Pradesh High Court, arising from references made by the Himachal Pradesh Tax Tribunal. STR No. 4001 of 2013 concerns M/s Subhash Chand Gian Chand, and STR No. 1 of 2012 concerns M/s Ajay Pal Singh. The core issue revolves around the classification of 'Khair' wood under the Himachal Pradesh General Sales Tax (HPGST) Act, 1968, specifically whether it constitutes 'timber' or 'converted timber' and its taxability. The Tribunal referred several questions of law to the High Court, including the definition of timber, classification of Khair wood as raw material for katha manufacturing, and entitlement to claim sale at a reduced rate. The appeals were filed by the respective appellants against the Appellate Authority-cum-Dy. Excise & Taxation Commissioner and another respondent.

Key Issues

1. Whether 'Khair' wood falls under the definition of 'Timber' as defined under section 2(II) (Explanation 3) of the HP GST Act, 1968, and is liable for taxation at 30% as per section 6(1)(b) and Schedule ‘C’ of the HP GST Act, 1968, in light of Supreme Court judgments in *Mukesh Kumar Aggarwal & Co. v/s State of M.P. & Other* and *State of Himachal Pradesh v/s Ganesh Wood Products*? 2. Whether Khair wood, as a raw material for katha manufacturing, can be classified as converted timber as per a notification dated 07-02-1992, and liable for tax at 12% as per Schedule ‘A’ of the HP GST Act, 1968, entries No. 34 and 35? 3. Whether 'Khair wood' falls within the definition of 'Timber' or 'converted Timber' under section 2(ii) (Explanation 3) of the HP GST Act, 1968, considering differing findings by the Financial Commissioner (Appeals)? 4. Whether the applicant is entitled to claim sale at 1% of Khair wood against RM-1, as per Notification No.EXN-F(9)2/99(ii) dated 23-07-1999, which exempts goods other than timber from tax when sold to industrial units for use as raw material? 5. Whether a 30-day grace period is available to the applicant under section 4(2) of the HP GST Act, 1968? Petitioner's arguments: The appellants, through their counsel, relied on the aforementioned Supreme Court and High Court judgments to argue for a specific classification of Khair wood and its tax implications. They also relied on specific notifications for reduced tax rates. Revenue's arguments: The respondents, represented by the Advocate General, argued that the matter was already covered by previous judicial pronouncements.