Public Notice for exporters of paddy/rice-is it contempt of court?

Excise & Taxation Department, Punjab has issued a public notice for Exporters of Paddy/Basmati Paddy/Rice directing them to pay the purchase tax on purchase of paddy even if the rice manufactured out of it is exported. 

It has been further directed in the public notice that dealers exporting rice/paddy should pay purhase tax on the paddy and then they may claim refund afterwards of such purchase tax paid when rice are exported.

It is to be noted hereby that as per section 15(ca) of CST Act, 1956 If paddy is purchased on payment of tax on its sale or purchase and rice procured out of it is exported, the paddy and rice will be treated as same goods for the purpose of section 5(3) of CST Act. Thus paddy can be purchased without payment of tax, if rice made from such paddy is exported.

However the Public notice is asking dealers to deposit purchase tax against the provisions of CST Act, 1956. A similar notice of Excise & taxation Department, Punjab earlier also was quashed by Punjab & Haryana High Court in KRBL Limited vs State of Punjab CWP 19355 of 2010 and wherein it was held that recovery can be effected only if it is within the competence of the State Legislature. It cannot be recovered initially providing the remedy of refund later on.  

The question is why do Department issues such notices again and again when it is already quashed by High Court, whether it amounts to disrespecting the decision of the High Court? Whether issuance of again such notice amounts to contempt of court? 

The full Public Notice is as follows

Government of Punjab
Excise and Taxation Department
Attention: Exporters of Paddy/Basmati Paddy/Rice
1.0 As per section 19 of Punjab VAT Act, 2005, paddy is specified as schedule "H" item. Therefore, when any taxable person purchases paddy within the state, he becomes liable to pay purchase tax immediately [section 6(3) (a) (iii)]
2.0 It has come to the notice of the Department that some of the dealers, who are exporting Paddy/Basmati Paddy/Rice to other states/out of India, are not paying due and complete purchase tax on paddy on the pretext of exporting rice. Such dealers are advised to deposit the tax at the time of purchase of paddy. They can claim refund as per rule 52 of the Punjab VAT Rules, after they export rice procured out of this paddy.
3.0 It has also been observed that some Rice Sheller owners purchase paddy/Basmati paddy from within the State, transfer the paddy to other State & after milling export rice. These sales made by such dealers do not qualify to be penultimate sales.
4.0 It has now been decided that the Rice Sheller owners shall use the Department's website( to give information at the time of purchase of paddy and at the time of transferring paddy/basmati paddy/rice from Punjab to other States or out of India.
5.0 Rice Sheller owners are advised to fill the e-TRIP form at the time of purchase of paddy/basmati paddy and for movement of paddy/basmati paddy/rice within the State of Punjab. Further, they shall fill e-ICC form, while transporting paddy to other states or exporting the basmati paddy/rice to other states or out of India. Filling the e-TRIP & e-ICC forms shall enable the Rice Sheller owners in faster processing at the ICCs(barriers) & in case of  inspection of their goods by Departmental officers within the State of Punjab.This shall ultimately result in quicker movement of their stock/goods out of Punjab.
6.0 Any contravention of this advisory will make the millers liable for penalty under section 52 of the Punjab VAT Act, 2005, in addition to interest.
7.0 Any suggestions/queries/doubts/observations in this regard may be sent to the undersigned.Similarly, any information regarding illegal purchases of paddy/basmati paddy being made without paying purchase tax/I.D cess can be informed to the department on email id: or For further details and clarifications, please contact the office of the concerned Asstt. Excise & Taxation Commissioner (In-charge of the District) and for more information please visit us at
                                                                    A. Venu Prasad, IAS
                                                                     Excise & Taxation Commissioner


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