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TMI Blog1995 (9) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... er furnish form III-Kha or if it cannot do so, it shall reimburse the respondents-writ petitioners in full for the difference amount of tax which the respondents were made to pay to the State on account of the appellant's failure to furnish declaration forms to the respondents in that behalf. But so far as the orders placed or supplies made prior to April 23, 1984 is concerned, the appellant-corporation is not liable either to furnish the declaration forms to the respondents-writ petitioners or to reimburse them in any manner. - Civil Appeal No. 8198-8203 of 1995, & 8205 of 1995, W.P. Nos. 32, 33, 140, 924 of 1990, 323, 503 of 1987, 1877(T) of 1988 - - - Dated:- 7-9-1995 - JEEVAN REDDY B.P. AND MUKHERJEE M.K. JJ. R.F. Nariman, Senior Advocate (D.N. Misra, Advocate for J.B. Dadachanji Co., with him), for the appellant. M.C. Dhingra, R.A. Mishra and K.S. Rana, Advocates, for respondents Nos. 2, 3 and 4. Prashant Kumar, Sunil Ambwani and Ashok K. Srivastava, Advocates, for respondent No. 5. -------------------------------------------------- The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.- Leave granted. These appeals are pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified goods, he shall, if he wishes to avail of the concession referred to therein, furnish to the selling dealer a certificate in form III-B (hereinafter called a 'declaration form')". The rule provides that any dealer holding a recognition certificate and wishing to avail of the concession referred to in section 4-B(1)(b) shall apply to the appropriate Sales Tax Officer for declaration forms and the said officer shall issue the same on being satisfied about the relevant particulars. Ganesh Flour Mills, while under the management of the Central Government, was granted a recognition under section 4-B(2). The appellant- corporation has also been granted a recognition certificate under the said provision. The Ganesh Flour Mills, prior to its vesting in the appellant-corporation (the date of vesting of the undertakings of the Ganesh Flour Mills in the appellant- corporation, as stated above, is April 23, 1984) and the appellant-corporation after such vesting has been placing orders on certain dealers including respondent Nos. 1 to 5 for supply of tins of specified size and quality representing that it is a recognised dealer and that the said supplies shall be made to it against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or at a later point of time. [According to the rules, the selling dealer could produce these declaration forms before the assessing authority "up to the date on which he is required to furnish his accounts for final assessment in respect of the year to which the claim pertains " vide sub-rule (5) of rule 25-B.] Ganesh Flour Mills prior to its vesting in the appellant-corporation and the appellant-corporation after the said date of vesting were engaged not only in manufacturing vanaspati by themselves but were also undertaking job-works on behalf of other parties. Even the vanaspati manufactured by them was not sold entirely within the State or in the course of inter-State trade or commerce or in the course of export out of India, as contemplated by sub-section (2) of section 4-B. Part of it was sent to other States on consignment basis without effecting sale thereof within the State of Uttar Pradesh. According to the provisions of section 4-B, it may be reiterated, the facility of recognition certificate is confined only to cases where a manufacturer purchases raw material for manufacturing notified goods (or for packing such notified goods manufactured or processed by him) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied interest under the provisions of the Uttar Pradesh Sales Tax Act. The respondents complain that even penalty proceedings were initiated against them for the said failure. It is then that they approached the Allahabad High Court by way of writ petitions from which these appeals arise. The principal relief sought in the writ petitions was for issuance of a writ of mandamus directing the appellant-corporation to furnish to the writ petitioners declaration forms (form III-Kha) prescribed under the Uttar Pradesh Sales Tax Rules in respect of that quantity of tin containers which were supplied by the writ petitioners to the appellant-corporation on the strength of recognition certificate and against the undertaking to furnish the declaration forms (form III-Kha). The claim of the writ petitioners pertained both to the period anterior to April 23, 1984 (the date of vesting of the undertakings of Ganesh Flour Mills in the appellant-corporation) and also for the period subsequent to the said date. The Union of India was also impleaded as a respondent to the writ petitions. The appellant-corporation denied any responsibility or liability to issue the declaration forms (form III-Kha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od prior to April 23, 1984. Section 6(1) of the Acquisition Act does not relieve the appellant- corporation of the said obligation and liability. (iv) The writ petitioners are not seeking to enforce any contractual obligation by means of the said writ petitions but were only seeking to enforce the statutory obligation placed upon the appellant-corporation. Even otherwise, the corporation being a "State" within the meaning of article 12 is bound to act fairly and hence amenable to writ jurisdiction. (v) It appears from the record placed before the court that the appellant- corporation has been picking and choosing dealers in the matter of issuance of declaration forms (form III-Kha). To some they have issued the forms and to others they have refused. The plea of the corporation that such forms were issued to some dealers under a mistake is not acceptable. (vi) The plea of the appellant-corporation that issuance of such declaration forms (form III-Kha) would expose it to penalties under the Uttar Pradesh Sales Tax Act is also not acceptable. [The court, however, declined to express any opinion on the question whether in fact the corporation would become liable for penalties if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Uttar Pradesh Sales Tax Rules: "4-B. Special relief to certain manufacturers.-(1) Notwithstanding anything contained in sections 3, 3-A, 3-AAAA and 3-D: (a) Where any goods liable to tax under sub-section (1) of section 3-D are purchased by a dealer who is liable to tax on the turnover of first purchases under that sub-section or where any goods are purchased by any dealer in circumstances in which such dealer is liable to purchase tax in respect thereof under section 3-AAAA and the dealer holds a recognition certificate issued under sub-section (2) in respect thereof, he shall be liable in respect of those goods to tax at such concessional rate, or be wholly or partly exempt from tax, whether unconditionally or subject to the conditions and restrictions specified in that behalf, as may be notified in the Gazette by the State Government in that behalf; (a-1) Where any declared goods liable to tax under sub-section (1) of section 3-D are sold or supplied by a dealer, who is the first purchaser thereof, to another dealer, holding a valid recognition certificate issued under sub-section (2) in respect thereof, the dealer who made the first purchase shall in respect of such pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and not more than double the amount of such tax, less any amount which he may have actually paid as tax on the purchase of such goods. 25-B. Authority from which declaration forms may be obtained for use; custody and maintenance of records of such forms and matters incidental thereto.- (1) Where a dealer holding a recognition certificate purchases any goods referred to in clause (c) of sub-section (1) of section 4-B, for use as raw material for the purpose of manufacture of any notified goods, he shall, if he wishes to avail of the concession referred to therein, furnish to the selling dealer a certificate in form III-B (hereinafter called a 'declaration form')." It would equally be appropriate to set out at this stage the relevant provisions of the Acquisition Act. The preamble to the Act recites that for sustaining and strengthening the nucleus of public owned or controlled units required for ensuring supply of wholesome vanaspati and refined edible oils, etc., to the public at reasonable prices and for giving effect to the State policy specified in clauses (b) and (c) of article 39 of the Constitution, it has been decided to acquire the undertakings of the Ganesh Fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, be the liability of the Central Government and shall be discharged by the Central Government or, for and on behalf of that Government, by the Government company as and when repayment of such amount becomes due and as and when such wages, salaries and other dues become due and payable. (3) For the removal of doubts, it is hereby declared that- (a) save as otherwise expressly provided in this section or in any other section of this Act, no liability, other than the liability specified in sub-section (2), of the company in relation to the Ganesh Flour Mills, in respect of a period prior to the appointed day shall be enforceable against the Central Government or the Government company, as the case may be; (b) no award, decree or order of any court, Tribunal or other authority in relation to the Ganesh Flour Mills, passed after the appointed day, in respect of any matter, claim or dispute in relation to any matter, not being a matter referred to in sub-section (2), which arose before that day shall be enforceable against the Central Government or the Government company, as the case may be; (c) no liability incurred by the company before the appointed day, for the contraventi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court cannot, therefore, be held to be in error in issuing the direction which it did. We, however, wish to provide a modification to the direction issued by the High Court in view of the provisions of sub-section (6) of section 4-B of the Uttar Pradesh Act and particularly in view of the time-lapse since the controversy has arisen. In all likelihood, the assessments of the respondents under the Uttar Pradesh Act must have been completed long ago and the question of filing the declaration forms now, by the respondents, appears to be an impracticable thing. The modification is this: if the appellant is not in a position to issue the declaration forms, it may not issue them but in such a case it shall reimburse the respondents-selling dealers in full for the difference amount of tax which the respondents were made to pay on account of the appellant's failure to furnish the said declaration forms and also in respect of interest or the penalties, if any, imposed in that behalf and paid by them. We cannot appreciate the argument of Sri Nariman that the appellant- corporation should be made liable only for reimbursing the difference of tax amount but not the interest. We see no ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government or the Government company, as the case may be". Clause (b) of sub-section (3) says that no award, decree or order of any court, tribunal or other authority in relation to Ganesh Flour Mills with respect to any matter, claim or dispute not being a matter referred to in sub-section (2) and which arose before the date of vesting shall be enforceable either against the Central Government or against the Government company, as the case may be. Similarly, clause (c) of sub-section (3) states that "no liability incurred by the company before the appointed day, for the contravention, in relation to the Ganesh Flour Mills of any provision of law for the time being in force shall be enforceable against the Central Government or the Government company, as the case may be". ["Company" is defined in clause (c) of section 2, as stated above, to mean the Ganesh Flour Mills Co. Ltd., Delhi, a company within the meaning of Companies Act, 1956 and having its registered office at Subzi Mandi, Delhi.] The provisions in section 6 thus make it clear beyond any doubt that any liability of Ganesh Flour Mills prior to the date of vesting in the Central Government (January 28, 1984) shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills for supply of any goods prior to its vesting in the Central Government. With respect, we are unable to agree. A reading of section 22 shows that unless ratified in writing within thirty days of the appointed day, no contract entered into by Ganesh Flour Mills prior to January 28, 1984 (appointed day) shall be binding upon the Central Government/Government company. The proviso, no doubt, states that the Central Government/appellant-corporation shall not omit to ratify a contract and shall not effect any alteration or modification therein unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to their interest which satisfaction has to be arrived at after hearing the parties to the contract; the reasons for such action are also required to be recorded in writing. But this only means that if a particular contract is refused to be ratified or is altered or modified in any particular manner, the affected party (i.e., party to such contract) shall be entitled to question the same in accordance with law. But the writ petitions-from which these appeals arise were not such proceedings. These were not the writ petitions que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner of the Ganesh Flour Mills by virtue of the vesting provided by section 3 of the Acquisition Act and the Central Government which was in management of the said company by virtue of the notification under section 18-AA of the Industries (Development and Regulation) Act. Be that as it may, we need not pursue this line of thought inasmuch as these appeals are filed only by the appellant-corporation and not by the Central Government. Accordingly, we confine ourselves to the liability of the appellant-corporation alone. The appeals are accordingly allowed in part. It is declared that in respect of the contracts entered into and supplies received by the appellant-corporation on or after April 23, 1984, the appellant-corporation shall either furnish form III-Kha or if it cannot do so, it shall reimburse the respondents-writ petitioners in full for the difference amount of tax which the respondents were made to pay to the State on account of the appellant's failure to furnish declaration forms to the respondents in that behalf. But so far as the orders placed or supplies made prior to April 23, 1984 is concerned, the appellant-corporation is not liable either to furnish the decl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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