Punjab government's entry tax on sugar hits legal hurdles | chandigarh | Hindustan Times
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Punjab government's entry tax on sugar hits legal hurdles

A key ordinance promulgated by the Punjab government in May to charge 11% entry tax on sugar has turned out to be legally not sustainable.

chandigarh Updated: Aug 13, 2015 23:51 IST
Pawan Sharma

A key ordinance promulgated by the Punjab government in May to charge 11% entry tax on sugar has turned out to be legally not sustainable.

Even as the ordinance was signed by governor Kaptan Singh Solanki, this new law was not notified under the governor's signatures and seal. Instead, the notification was issued wrongly in the name of the principal secretary for industries and commerce. The embarrassing error occurred in spite of the industries department's following the due procedure of routing the file through office of legal remembrancer HPS Mahal for vetting before publishing the notice, say sources in the government.

It is unclear at what level this goof-up took place, but indirect blame is being passed on to the LR's office. The government's argument is that the buck stops with the office that vets the file.

The LR was unavailable for comments, as he refused to meet the HT reporter on Thursday, directing him through his staff officer to first seek formal appointment. When contacted over his office telephone again, his staff said the LR had gone to the high court.

In a one-page note to the government on August 12 (HT has a copy), the LR wrote that the ordinance in question "is required to be repealed". In the note, he refuses to accept the government's proposition of issuing a corrigendum to rectify the mistake, whether printing or clerical.

Another legal lacuna in this ordinance, source say, is that even as the governor had signed it, no schedule was appended to it. On this issue, the LR has told the government: "A perusal of the file reveals that the intention of the AD (administrative department) is to get signed schedule from the governor retrospectively or issue a corrigendum to achieve the purpose." In this regard, he pointed out that though a corrigendum can be issued to rectify "printing or clerical mistake" even retrospectively, "this department (of legal and legislative affairs) is of the view that (in the present case) this was neither a clerical error nor a printing mistake".

In a clear indication of a full blown inter-departmental cold war brewing, the LR reiterated referring to an earlier communication that a "new ordinance" was needed to be promulgated to achieve the purpose by repealing the existing ordinance.

The LR pointed out that this ordinance had also been challenged in the Punjab and Haryana high court on the grounds that the schedule was notified by the principal secretary on May 29. "However, if need be, fresh ordinance can be promulgated to achieve the purpose as advised earlier," the LR has stated in the communication.


HC orders against coercive recovery


Meanwhile, the high court division bench led by acting chief justice SJ Vazifdar has directed the state government to take no coercive action till further orders for the recovery of tax under this ordinance. The petition will come up for resumed hearing on September 8.


A key ordinance promulgated by the Punjab government in May to charge 11% entry tax on sugar has turned out to be legally not sustainable.

Even as the ordinance was signed by governor Kaptan Singh Solanki, this new law was not notified under the governor's signatures and seal. Instead, the notification was issued wrongly in the name of the principal secretary for industries and commerce. The embarrassing error occurred in spite of the industries department's following the due procedure of routing the file through office of legal remembrancer HPS Mahal for vetting before publishing the notice, say sources in the government.