M/S S.N.Enterprise vs P.K.Tripathi & Anr.
2010 Latest Caselaw 1019 Del

                     * IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                      Date of Reserve: 14th January, 2010
                                                       Date of Order: 22nd February, 2010

Cont. Cas. (C) No. 70/2000 & CM Appl. No. 11259/2004 & 16398/2005
%                                                                 22.2.2010

           M/s S.N.Enterprise                                 ... Petitioner
                                  Through: Mr. Rajesh Mahna, Mr. Ramanand Roy,
                                  Mr. Navneet Dhillon & Mr. Nasir Aziz, Advocates

                   Versus

           P.K.Tripathi & Anr.                                 ... Respondents
                                  Through: Mr. Parag P. Tripathi, ASG with
                                  Ms. Arti Gupta, Mr. H.C.Bhatia &
                                  Mr. H.R.Taneja, Advocates

JUSTICE SHIV NARAYAN DHINGRA

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

The petitioner has filed this contempt petition alleging non compliance of an order of this Court passed on 19th January, 2000 in CW No. 3918/98. The order reads as under:

Counsel for respondents no.1 to 3 submits that in view of the decision of this Court dated 30th November, 2008 in Civil Writ Petition No. 3304/97 (M/s Shri Krishna Engineering Co. v. CST Delhi), the said respondents will not withhold any forms on the basis of Rule 8(4)(c)(ii) of the Delhi Sales Tax Rules. The challenge in the present writ petition is mainly to the said Rule. Therefore, in view of the statement made by the learned Counsel for respondents no. 1 to 3, nothing survives in this petition. The petition stands disposed of.

2. The facts relevant for the purpose of deciding this petition are that the petitioner had filed aforesaid Writ Petition challenging the Rule 8(4)(c)(ii) of Delhi Sales Tax Rules which provided that ST-1 forms shall not be issued to a party who had defaulted in making the payment of amount of tax assessed or penalty imposed by an appropriate Assessing authority which the applicant admits due from him and which is not in dispute. While the petition was pending, this High Court had delivered

a judgment in case of Shri Krishna Engineering Company v. Commissioner of Sales Tax and declared the aforesaid rule as ultra vires. After the judgment of Shri Krishna Engineering Company an amendment was made to proviso of Section 4(2)(a)(v) of Sales Tax Act and sub-clause (ii) in Rule 8(4)(c) was re-inserted. This re-inserted rule was again challenged by a batch of petitions in the High Court and Delhi High Court in case of Prince Plastic & Chemical Industries v. C.S.T (2003) 131 STC 372 (Delhi) and in S.N.E (India) Private Limited v. Commissioner of Sales Tax (2003) 13 STC 417(Del.) upheld the validity of the Rule. The matter was carried up to Supreme Court and judgment of Delhi High Court in Prince Plastic was upheld and the judgment in Shri Krishna Engineering Company was overruled by Supreme Court vide its judgment in Commissioner of Sales Tax, Delhi & Ors. v. Shri Krishna Engineering Company & Ors. (2005) 139STC 457 (SC)

3. In view of the fact that the petitioner herein had not cleared the huge sales tax demand and there were outstanding tax payments, ST-1 Forms were not issued to the petitioner. The petitioner has come up with the present contempt petition on the ground of statement made by the Counsel for Commissioner of Sales Tax in CW No. 3895/1998.

4. It is not disputed that the statement was made by Counsel for the Commissioner of Sales Tax because of the judgment of this Court in M/s Krishna Engineering Company v. C.S.T Delhi. Thus, the statement was an effect of the relevant provision having been held ultra vires by this Court. This judgment of the High Court was set aside and the Rule was held not to be ultra vires by the Supreme Court. The effect would be that this Rule was in existence from the very beginning and the operation of the Rule did not come to an end even during the period when the judgment of High Court had not been set aside.

5. I consider that the denial of the form to the petitioner was in accordance with the law laid down by Supreme Court. Merely because a statement was made by the Counsel in view of decision of Shri Krishna Engineering Company's case of this Court, which was later found to be a bad law, Contempt would not lie against the respondents. This petition has no force and is hereby dismissed.

February 22, 2010                                SHIV NARAYAN DHINGRA, J.
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