The Commissioner, Commercial ... vs S/S Kishan Lal Ashok Kumar
2013 Latest Caselaw 6054 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A F R
 
Court No. - 10
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 354 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Kishan Lal Ashok Kumar
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 415 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P. Lucknow
 
Opposite Party :- S/S Yadav Rice Project
 
Counsel for Applicant :- S.C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 416 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P. Lucknow
 
Opposite Party :- S/S Yadav Rice Mill
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 350 of 2009
 
Applicant :- The Commissioner Commercial Tax Up Lucknow
 
Opposite Party :- S/S Guru Prasad Raj Kumar
 
Counsel for Applicant :- S. C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 355 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Jagannath Ashok Kumar Rice Mill, Etawah
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 384 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Nihal Chand Jagannath
 
Counsel for Applicant :- S. C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 391 of 2009
 
Applicant :- The Commissioner,Commercial Tax,U.P.
 
Opposite Party :- S/S Mata Deen Bal Mukund,Rice Mill,Etawah
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 392 of 2009
 
Applicant :- The Commissioner,Commercial Tax,U.P.
 
Opposite Party :- S/S Nihal Chand Jagannath,Rice Mill ,Itawah
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 393 of 2009
 
Applicant :- The Commissioner,Commercial Tax,U.P.
 
Opposite Party :- S/S Matadeen Balmukund,Rice,Mill,Etawah
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 406 of 2009
 
Applicant :- The Commissioner, Commercial Tax,U.P.
 
Opposite Party :- S/S Madan Lal Harish Kumar,Rice Mill
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 407 of 2009
 
Applicant :- The Commissioner, Commercial Tax,U.P.
 
Opposite Party :- S/S Kishan Lal Ashok Kumar, Rice Mill
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 408 of 2009
 
Applicant :- The Commissioner, Commercial Tax,U.P.
 
Opposite Party :- S/S Jamuna Prasad Guru Prasad
 
Counsel for Applicant :- S.C.
 
With
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 417 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Chambamal Harjeet Singh Rice Mill
 
Counsel for Applicant :- S. C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 419 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Madan Lal Harish Kumar Rice Mill
 
Counsel for Applicant :- S. C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 461 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Balak Ram Om Prakash Rice Mill
 
Counsel for Applicant :- S. C.
 
with
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 479 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Harish Kumar Murti Lal
 
Counsel for Applicant :- S. C.
 
and
 
Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 489 of 2009
 
Applicant :- The Commissioner, Commercial Tax, U.P., Lucknow
 
Opposite Party :- S/S Yadav Rice Mill
 
Counsel for Applicant :- S. C.
 

 

 
Hon'ble Arun Tandon,J.

The short issue involved in all these 16 Tax Revisions is as to whether the liability of interest for late payment of tax in the facts of these cases would be attracted from the date the tax was payable or from the date the writ petitions filed by the assessee alongwith bunch of similar writ petitions was dismissed by the High Court.

Learned counsel for the department with reference to the judgment of the Apex Court in the case of Calcutta Jute Manufacturing Company and Another Vs The Commercial Tax Commissioner and others reported in AIR 1997 SC 2920 submitted that from the facts on record it is established that the petitioner had taken his chance by litigating and he was successful in obtaining an interim order during the pendency of the writ petition. Now when his writ petition has been dismissed under the judgment of the High Court dated 17.01.1996, it is to be presumed that there was no interim order at any point of time in favour of the assessee and even otherwise, any benefits drawn by the assessee because of the interim order must be eased out and must be restored as if there was no interim order in favour of the assessee. He submits that the controversy stands settled under the judgment of the Apex Court in the case of Calcutta Jute Manufacturing Company (supra) referred to above against the assessee.

Sri Ashok Kumar, learned counsel for the assessee submitted before this Court that large number of writ petitions had been filed before the Hon'ble High Court challenging the Notification dated 21.05.1994. The very competence of the State to levy tax @ 2 % on purchase of paddy even on the holders of recognition certificate was under challenge. The assessee was granted an interim stay order. Therefore, the assessee had a bonafide to believe that he is not liable to pay tax on the paddy purchased by him, being a holder of recognition certificate in the relevant year and his bonafide belief was strong thereof by the interim order of the High Court. He explains that under the Trade Tax Act, it is only the admitted amount of the tax, which is required to be deposited up to the date of filing of the return. Since the assessee did not admit his liability in respect of the tax on paddy purchased by him in terms of the Notification dated 21.05.1994, it cannot be said that he had not paid the admitted amount. It is only from the date when the assessment order was issued fixing his liability after dismissal of the writ petition that he can be asked to pay interest on the tax, so determined. Therefore, the order of the Tribunal according to Sri Ashok Kumar does not warrant any interference. In support of his case he refers to the judgment of Constitutional Bench of the Apex Court in the case of J. K. Synthetics Ltd Vs The Commercial Taxes Officer reported in 1994 U. P. T. C. 893, specially to paragraphs 16 & 17 as well as to the judgment of the Division Bench of the High Court in the case of M/s Annapurna Biscuit Company Vs State and Others reported in 1980 U.P.T.C. 1320 and the judgments of the Hon'ble Single Judge in the case of Commissioner of Trade Tax Vs M/s Mentha and Allied Products, Rampur reported in 1997 U.P.T.C. 1118.

Learned counsel for the assessee explains that Mentha and Allied Products Ltd was also one of the petitioners in the bunch of petitions challenging Notification dated 21.05.1994. The said bunch of petitions was decided by the High Court on 17.01.1996 reported in 1996 NTN 376 (supra). Against Mentha and Allied Products, interest was demanded by the tax authorities from the date tax was payable in respect of purchase of paddy. The Tribunal in that case held that interest on tax would be payable only from the date the writ petitions were dismissed by the High Court i.e. 17.01.1996 only. The department filed Revision before the HighCourt, which was dismissed. This Judgment is reported in 1597 U.P.T.C 1118. He, therefore, submits that the same principle, as have been applied in respect of one of the petitioners of the same bunch of petitions in the matter of demand of interest on the delayed payment of tax, should be applied in the case of the petitioner, who is also similarly related.

In the alternative, he submitted that if this Court is not in agreement with the judgment of the Single Judge in the case of Commissioner of Trade Tax Vs M/s Mentha and Allied Products, Rampur reported in 1997 U.P.T.C. 1118, then the matter may be referred for consideration to a larger bench.

I have heard counsel for the parties and examined the records of the present revision.

This Court may record that the law applicable in the matter of reference to a large bench is well settled. The Apex Court has laid down that if a judgment is delivered by the High Court in ignorance of the law laid down on the subject by the Apex Court, then the question of referring the matter does not arise in as much as, the law laid down by the Apex Court is binding upon all the Courts in view of Article 141 of the Constitution of India and that the concept of per incuriam could come into play, reference AIR 2005 S.C.498. Similarly, if the law has been explained in a subsequent decision of the Apex Court, then also the latter law as laid down by the Apex Court will prevail over the judgment of the Hon'ble Single Judge and in that circumstance also, no reference is required to be made.

Lastly, the Apex Court in the case of Bhavnagar University Vs Palitana Sugar Mills (Pvt.) Ltd & Ors, reported in 2003 (2) SCC 111, has held as follows :

"It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision."

The said judgment has been followed by the Apex Court in the case of Dr. Rajbir Singh Dalal Vs. Chaudhary Devi Lal University, Sirsa & Anr., reported in AIR 2008 SCW 5817.

In the aforesaid legal background this Court may notice peculiar facts of the case in hand.

From the order of assessment, which is part of the present revision, it is apparent that after the issuance of Notification dated 21.05.1994, the assessee had infact made payment of tax on paddy purchased by him @ 2 % while depositing the tax on 28.05.1994, 27.06.1994, 27.07.1994, 12.08.1994, 20.09.1994, 20.10.1994 and 30.01.1995. It appears that thereafter, the assessee filed a writ petition challenging Notification dated 21.05.1994, which was clubbed with other writ petitions, which were filed against the same notification leading case being W.P no.645 of 1994 filed by M/s Mentha and Allied Products Ltd. In his writ petition the revisionist was also granted similar interim order as in the other connected matters.

It is apparent from the record that the assessee has only joined in the litigation after an interim order was passed by High Court in bunch of writ petitions, the leading being Writ Petition no.645 of 1994.

For a period of nearly eight months after the issuance of Notification dated 21.05.1994, the assessee had admittedly deposited the tax on paddy purchased by him @ 2 %. Such payment of tax on the paddy purchased by the assessee was stopped only after he succeeded in obtaining an interim order from the Hon'ble High Court, when his writ petition was clubbed with that of M/s Mentha and Allied Products Ltd filed in the year 1994.

The aforesaid facts lead to one simple conclusion namely that the assessee did not have any bonafide doubt in respect of the paymnet of tax @ 2 % on paddy purchased by him at least for a period of eight months subsequent to the issuance of Notification dated 21.05.1994. He took his chance by filing a writ petition before the High Court challenging the notification dated 21.05.1994 and on succeeding in obtaining an interim order from the High Court, he stopped the payment of tax on the paddy purchased by him.

The assessee having taken the benefit of an interim order passed by the High Court and having failed finally in the writ petition, must balance the equity and must recoup the benefits, which he had drawn under the interim order. It is needless to emphasize that the Apex Court in the case of Chamundi Mopeds Ltd. Vs Church of South India Trust Association SSI Cinod Secretariat Madras reported in (1992) 3 SCC 01 has laid down that once a writ petition is dismissed, the logical consequence is that :

it is to be presumed as if no interim order was ever granted in favour of the petitioner, in as much as, all interim orders merge in the final order; and

all benefits drawn by the petitioner under the interim order must be balanced out once the writ petition is dismissed.

Retention of any benefit by a petitioner obtained under an interim order even after, his writ petition is dismissed would be totally illegal and would result in a situation whereby merely litigating, although ultimately it is found that the challenge had no merit a party could draw illegal mileage.

This Court may record that the in judgment of the Apex Court, relied upon by the learned counsel for the department, in the case of Calcutta Jute Manufacturing Company & Another Vs The Commercial Tax Officer & Others reported in AIR 1997 SC 2920, the judgment of the Constitution Bench in the case of J. K. Synthetics (supra) relied upon by the petitioner has been taken note of in paragraph 16. In the facts of the case, the Apex Court has gone on to hold in paragraph 17 as follows :

"17. The tax amount which they should have paid as per Section 6-B remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should necessarily have gone, was not able to utilize it for public purposes. When appellants had the advantage of keeping the amount of tax without paying it to the State exchequer only because the High Court granted orders restraining the State from recovering that amount from the assessee, no act of the Court shall cause prejudice to any party. The pristine doctrine couched in the maxim 'actus curiae neminem gravabit' has ever remained a salutary and guiding principle."

In view of the proposition laid down and explained by the Apex Court in the aforesaid case, there is no room of doubt that merely because an interim order was granted in favour of the petitioner during the pendency of the writ petition filed by him, it will not mean that the State was deprived of its statutory right to interest provided under the Act for the period the interim order was in operation.

Since the Apex Court itself in the judgment of Calcutta Jute Manufacturing Company (supra) has taken note of the Constitution Bench judgment in the case of J. K. Synthetics (supra), which is sheet anchor of the argument of the petitioner, distinguishing the same on facts, nothing more is required to be added by this Court.

This Court finds that the petitioner himself had deposited tax for eight months after issuance of Notification dated 21.05.1994 and it is only because of the interim order, which he succeeded in obtaining sometimes in 2005, he stopped the payment of tax on purchase of paddy. This Court further finds that such facts are completely absent in the case of Commissioner of Trade Tax Vs M/s Mentha and Allied Products Ltd. Therefore, the said judgment is clearly distinguishable.

This Court may record that there was no bonafide dispute in the mind of the petitioner on the issuance of Notification dated 21.05.1994 qua his liability to make the payment of tax on purchase of paddy. The payment of tax was stopped by him only after he succeeded in obtaining an interim order in his writ petition after more than of the date of the notification.

So far as the Division Bench Judgment of High Court in the case of Annapurna Biscuit Company (supra) is concerned, suffice is to record that the Division Bench has specially noticed in para 4 of its judgment that at the time the return and the tax payable was calculated by the assessee, there was a decision of the competent authority/Court in his favour and it was on that basis the quantification of tax was made, which orders/judgment were subsequently upturned. The Court, therefore, proceeded to hold that there was bonafide basis for the assessee to have believed that no tax was payable as per the earlier orders.

The judgment in the case of Annapurna Biscuit Company (supra) is also clearly distinguishable in the facts of the present case.

The Tribunal has lost sight of the facts of this case, which have been noticed herein above and has wrongly presumed that merely because an interim order was granted in favour of the assessse, the statutory right of the State to interest was lost.

The Tribunal has also failed to take note of the judgment of the Apex Court in the case of Calcutta Jute Manufacturing Company (supra) while passing the order impugned, specially paragraph 4 quoted above. Therefore, the order cannot be legally sustained and it is hereby quashed.

Revision is allowed.

Order Date : 25.09.2013

M. Himwan

In Revision nos.415/09 & 416/09

Sri Ashok Kumar, learned counsel for the assessee made an attempt to draw a distinction in the facts of the present revisions by suggesting that in this case all the tax for the assessment year 1995-96 was deposited on purchase of paddy was deposited subsequent to the judgment of the High Court in the case of M/s Mentha and Allied Products Ltd. Dated 17.01.1996 and, therefore, this case be decided following the law in the case of M/s Metha and Allied Products (supra).

This Court made a pointed out querry as to what was the position qua the deposit of tax on purchase of paddy by the assessee in the assessment year 1994-95, in as much as, that was the crucial period for considering the bonafide belief of the petitioner qua his liability to pay tax after issuance of the Notification dated 21.05.1994. The assessment year 1995-96 commenced subsequently to the obtaining of the interim order from the High Court.

Sri Ashok Kumar, Advocate in reply submits that he has no knowledge of the aforesaid facts.

In view of the aforesaid, this Court finds no good reason to accept the plea that the assessee had a bonafide belief that he was not liable to pay tax on purchase of paddy in terms of the Notification dated 21.05.1994.

For the said reasons, this Court finds no good ground to take any different view in these revisions also. All the revisions filed by the Department are allowed. The order of the Trade tax Tribunal impugned in these Revisions are hereby set aside.

Order Date : 25.09.2013

M. Himwan