Madras High Court
M/S.Hyundai Motor India Limited vs M/S.A-1 Auto Pvt Ltd on 30 April, 2021
C.S.No.408 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 30.04.2021
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
C.S.No.408 of 2015
M/s.Hyundai Motor India Limited,
rep. By its Authorized Signatory,
Mr.M.Sagadevan, Assistang General
Manager – Legal & Secretarial,
South Regional Office at Hyundai Motor Plaza,
NP 54, Developed Plot,
Thiru-Vi-Ka Industrial Estate,
Ekkaduthangal, Guindy, Chennai – 600 032. ...Plaintiff
Vs..
1.M/s.A-1 Auto Pvt Ltd.,
3,4,5 Town Centre, Andheri Kurla Road,
Sakinaka, Andheri East,
Mumbai – 600 059.
2.Mr.Manpreet Singh Amrik Singh Vijan,
Director M/s. A-1 Auto Pvt. Ltd.,
Flat No.51/52, 5th Floor,
New Samir Apartments Socy (Society),
50, Pali Hill Road, Bandra,
(West) Mumbai – 400 050.
3.Mr.Pradeep Lalichand Tilani
Director M/s. A-1 Auto Pvt. Ltd.,
8, Bamboo House, Saraswati Road,
Santacruz (w), Mumbai – 400 0544.
1/9
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C.S.No.408 of 2015
4.Mr.Mehmood Khan,
Additional Director M/s.A-1 Auto Pvt. Ltd.,
RM 9, Papadwala Chawl 44,
Masan Road, Kasai Wada, Kurla,
Mumbai – 400 070.
5.Mr.Manmohan Durgadas Sharma,
Additional Director M/s. A-1 Auto Pvt Ltd.,
Flat No.E/522, Bhoomi Hills,
Thakur Village, Kandivali (East)
Mumbai – 400 101
6.The Deputy Commissioner,
(Commercial Taxes) – IV, Large Tax Payer Unit,
Durga tower, 5th Floor, Egmore, Chennai – 600008. ...Defendants
Prayer: Plaint filed under Order IV Rule (1) of the Original Side rules r/w
Order VII Rule 1 and 2 of C.P.C., praying to direct the defendants 1 to 5 to
pay to the plaintiff the sum of Rs.5,43,04,069/- (Rupees five crores forty
three lakhs four thousand and sixty nine only) together with interest @ 18%
p.a on the said sum of Rs.5,43,04,069/- from this date till date of realisation
and to pay the plaintiff the costs of the suit.
For Plaintiff : Mr.A.R.Karunakaran
For Defendants : No Appearance
JUDGMENT
This suit has been filed for recovery of a sum of Rs.5,43,04,069/-
being the excess tax amount paid by the plaintiff due to the failure of the
defendant in furnishing 'C' forms.
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C.S.No.408 of 2015
2.The plaintiff is a leading car manufacturer and the 1st defendant
was appointed as a dealer of the plaintiff. The defendants 2 to 5 are the
Directors of the 1st defendant Company. As per Section 8(1) of the Central
Sales Act, the rate of sales tax / VAT for the Cars and their spare parts in the
course of Inter-State Trade or Commerce in respect of sales made to
registered dealers of other states is 2%. The said concessional rate of 2% is
applicable to inter-state or commerce only if the selling dealer furnishes
particulars of sale to the prescribed authority in a particular manner in a
particular form, which is generally called as 'C' form within the prescribed
time. If the 'C' forms are not furnished within the prescribed time, the sales
made even to a registered dealer will also be deemed as a sale made to an
unregistered dealer or a Local Sales and the highest rate of tax will be
imposed according to the Local Sales Tax Act, wherein the tax of the sale of
cars / spare parts is 12.50% as against 2% under CST Act.
3.As per the memorandum of understanding dated 18.07.1996 and
22.01.2008 between the plaintiff and the Government of Tamil Nadu, the
plaintiff was given a concessional rate of tax at 1% instead of 2%. Pursuant
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C.S.No.408 of 2015
to the memorandum of understanding, Government Orders have been issued
in G.OMs.225 dated 29.09.1998 and G.O.Ms.No.101 dated 23.04.2008.
4.As per the Central Sales Tax Act and Rules, the purchasing
dealer is obliged to obtain form 'C' from the local sales tax office and submit
the same to the selling dealer to enable them to file the same to the local
sales tax authorities within the stipulated time. The plaintiff would claim
that the 1st defendant who was appointed as a dealer of the plaintiff under a
dealership agreement dated 11.09.2008 failed to furnish 'C' forms as
required under the Act and therefore, the plaintiff was compelled to pay the
suit claim as additional sales tax. The differential sales tax comes to
Rs.5,43,04,069/-.
5.According to the plaintiff, the liability for payment of excess
sales tax arose due to the failure on the part of the 1st defendant to furnish
'C' forms with the stipulated time and therefore, the defendant is liable to
pay dues. On the strength of the above pleadings, the plaintiff had sought
for a decree for recovery of the said sum of Rs.5,43,04,069/- along with
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C.S.No.408 of 2015
interest at 18% per annum on the said sum from the date of plaint till date of
realization.
6.Despite service, the defendants have not chosen to enter
appearance to defend the suit. The plaintiff has let in evidence and One
Mr.Sahadevan, Deputy General Manager (Legal & Secretarial) has
examined as P.W.1. He has filed his proof affidavit and has also produced
Exs.P1 to P21. The evidence on record clearly demonstrates that the
additional liability for a payment of sales tax arose solely on the ground of
the failure of the 1st defendant to produce 'C' forms within the stipulated
time. Therefore, the 1st defendant is liable to compensate the plaintiff for
the additional tax paid by the plaintiff.
7.Hence, the suit is decreed as prayed for with costs.
30.04.2021
kkn
Internet:Yes
Index:No
Speaking
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C.S.No.408 of 2015
List of witness marked on the side of the plaintiff :
P.W.1 – M.Sagadevan
List of documents marked on the side of the plaintiff:
S.No Exihibits. Documents marked
No
1 Ex.P1 The Original Board Resolution authorizing Mr.M.Sagadevan dated
30.06.2014.
2 Ex.P2 The Original Dealership Agreement between plaintiff and the 1st
defendant dated 11.09.2008.
3 Ex.P3 The Photo copy of the plaintiff letter to 1st defendant for non-
submission of Form-C for the period October 2007 to November
2009 dated 18.12.2009.
4 Ex.P4 The photo copy of the 1st defendant letter to the plaintiff's Regional
Manager, Mumbai Zonal Office with respect to payment of tax to
sales tax department and obtaining Form-C from Sales Tax Office
dated 18.05.2020.
5 Ex.P5 The photo copy of the Assistant Commissioner of Sales
Tax(Investigation) 18, Mumbai letter to the plaintiff regarding non-
payment of the tax by the 1st Defendant dated 14.12.2010.
6 Ex.P6 The photo copy of Assistant Commissioner of Sales Tax
(Investigation) 18, Mumbai letter to the plaintiff regarding non-
payment of tax by the 1st defendant.
7 Ex.P7 The original annual return in Form No.1 for the Financial Year
2009-10 of the plaintiff with respect to Inter-State sales.
8 Ex.P8 The photo copy of List of Invoice Numbers and value of sales made
to the 1st defendant by the plaintiff.
9 Ex.P9 The original letter with referene no.723823/2009-10 sent by the
Deputy Commissioner (CT), Enforcement (North) with respect to
CST assessment for the financial year 2009-10 dated 06.02.2014.
10 Ex.P10 The original letter with reference no.723823/2010-11 sent by the
Deputy Commissioner (CT), Enforcement (North) with respect to
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C.S.No.408 of 2015
S.No Exihibits. Documents marked
No
CST assessment for the financial year 2010-11 dated 06.02.2014.
11 Ex.P11 The original reply filed by the plaintiff for the letter with reference
no.723823/2009-10 dated 24.02.2014.
12 Ex.P12 The original reply filed by the plaintiff for the letter with reference
no.723823/2010-11 dated 24.02.2014.
13 Ex.P13 The original order passed by the Deputy Commissioner (CT),
Enforcement (North) for the financial year 2009-2010 for a demand
of Rs.5,25,23,516/- dated 15.03.2014.
14 Ex.P14 The original order passed by the Deputy Commissioner (CT),
Enforcement (North) for the financial year 2010-11 for a demand of
Rs.21,92,709/- dated 15.03.2014.
15 Ex.P15 The original plaintiff reply to Assessment Order dated 15.03.2014
Assessment Year 2009-10 informing the payment plan under
protest, dated 09.04.2014.
16 Ex.P16 The original plaintiff reply Assessment Order dated 15.03.2014
Assessment Year 2010-11 informing the payment plan under
protest dated 09.04.2014.
17 Ex.P17 The original notice sent by the Deputy Commissioner (CT)-IV.
Large Taxpayer Unit for demand Rs.22,95,11,731/- for the financial
years 2006-07 to 2010-11 dated 16.04.2014.
18 Ex.P18 The original plaintiff letter to the Deputy Commissioner (CT)-IV
large Taxpayer Unit for payment of the demand amount under
protest dated 17.04.2014.
19 Ex.P19 The original plaintiff letter to the Deputy Commissioner (CT)-IV
large Taxpayer Unit for payment of the demand amount for the
financial year 2009-10 under protest dated 12.05.2014.
20 Ex.P20 The original plaintiff letter to the Deputy Commissioner (CT)-IV
large Taxpayer Unit for payment of the demand amount for the
financial year 2010-11 under protest dated 12.05.2014.
21 Ex.P21 The original Legal Notice issued to the defendants – returned
unserved dated 12.07.2014.
List of witness and documents filed on the side of the defendants:
Nil
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C.S.No.408 of 2015
30.04.2021
kkn
R.SUBRAMANIAN, J.
KKN
C.S.No.408 of 2015
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C.S.No.408 of 2015
30.04.2021
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