9911796707
TMI Blog1995 (9) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, under an order dated November 3, 1972. In the year 1984, the Parliament enacted the Ganesh Flour Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1984, providing for the acquisition and transfer of the right, title and interest of certain undertakings of the Ganesh Flour Mills Co. Ltd. The Act came into force on January 28, 1984. By a notification dated April 23, 1984, issued under section 5 of the Act, the said undertakings were vested in the Hindustan Vegetable Oils Corporation Ltd., the appellant herein. Section 4-B(2) of the Uttar Pradesh Sales Tax Act provides that; (a) where a dealer requires any goods, referred to in sub-section (1), for use in the manufacture by him, in the State of any notified goods, or in the packing of such notified goods manufactured or processed by him and (b) such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, (c) he may apply to the assessing authority, in such form and manner and within such period as may be prescribed for the grant of a recognition certificate in respect thereof. The sub- section provides that if the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... URCHASE ORDER Grams: 'GANESHMILL' Sales Tax Regd. No. KR 4938 Tele: 21071, 21021, 21191, C.S.T. No. KR-3, dated May 22, 1957 21178 No. 163 558 Telex KP 354 To M/s. Tracto Auto Industries PB No. 32.4, Kalpi Road 12 P&T, Factory Area Kanpur- 208 012. Kanpur- 208 012. Dated: April 10, 1982. April 26, 1982. Dear Sirs, Sub: Supply of new empty tins of 18 litre capacity. -------------- We are pleased to place an order on you for 12,500 (twelve and half thousand only) of 18 litre capacity with newman bung hole and newman ticklies as per standard size at Rs. 13.50 per tin against 3 Kha form delivered at our works. The rates are f.o.r. Kanpur. 2.. It has been mutually agreed that payment will be made to you within seven days of testing of each lot and submission of bills. 3.. This order is effective from April 10, 1982.......Supplies should be completed within 4 weeks. 4......... 5.......... 11.. You will submit separate bill for each challan. Please mention order No. on challan as well as bill. 12........ Please confirm your acceptance of order includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured on account of third parties (this is the common case of the parties before us) or for storing the vanaspati which was sent to other States on consignment basis otherwise than by effecting the sale within the State or in the course of inter-State trade or commerce or in the course of export out of India. It follows from the above that the recognised dealer (appellant herein) was not entitled to rely upon his recognition certificate or to issue declaration forms (form III-Kha) to such selling dealers in respect of tins purchased by it but intended for the above purposes [purposes other than those mentioned in sub-section (2) of section 4-B]. But what happened in this case is this: Ganesh Flour Mills while under Central Government management and the appellant-corporation, after the date of vesting aforesaid, have been purchasing tins from the respondents undertaking to supply declaration forms (form III-Kha) in that behalf and on the basis of such representation, the selling dealers charged sales tax at the concessional rate of one per cent instead of the normal four per cent. Having so purchased the tins and having used part thereof in connection with job-works and/or for stori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as "the Acquisition Act"). So far as the period subsequent to April 23, 1984 is concerned, the appellant-corporation submitted that in view of the fact that the said tins were used for purposes other than those specified in section 4-B(2), they could not have issued declaration forms (form III-Kha) in respect of those purchases inasmuch as issuance of such forms would have exposed them to penalties under sub-section (6) of section 4-B. They expressed their readiness to pay the difference of sales tax which was levied upon and collected by the State from the selling dealers (writ petitioners). They submitted that no writ can be issued to them compelling them to do an act prohibited by law and which would expose them to penalties under the provisions of the Uttar Pradesh Sales Tax Act. The High Court has allowed the writ petitions on the following findings: (i) Where the purchasing dealer wishes to avail himself of the concession referred to in section 4-B(1)(b), as in the present cases, it is not competent for the purchasing dealer to withhold the declaration form (form III-Kha) from the selling dealer. If the purchasing dealer wishes to avail of the concession provided by se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporation, submitted that inasmuch as issuance of declaration forms in form III-Kha in respect of tins which were utilised for purposes other than those specified in section 4-B(2) would expose the corporation to penalties under the provisions of the Uttar Pradesh Sales Tax Act, no mandamus ought to have been issued by the High Court compelling the appellant-corporation to issue such declaration forms. The proper course would have been to direct the corporation to pay over to the respondents-dealers (writ petitioners) the difference of tax which they were made to pay to the State on account of the appellant- corporation's failure to furnish the declaration forms to them. The corporation should not, however, be made liable to reimburse the respondents in respect of the interest amount, if any, levied by the State upon the selling dealers on account of or as a result of their failure to produce the declaration forms (form III-Kha) in their assessments. The learned counsel further contended that so far as the period prior to April 23, 1984, is concerned, the appellant-corporation can in no event be held liable for issuing the said forms. The provisions of the Acquisition Act are cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where any goods liable to tax under any other provision of this Act are sold by a dealer to another dealer and such other dealer furnishes to the selling dealer in the prescribed form and manner a certificate to the effect that he holds a recognition certificate issued under sub-section (2) in respect thereof, the selling dealer 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. .................. (2) Where a dealer requires any goods, referred to in sub-section (1) for use in the manufacture by him, in the State of any notified goods, or in the packing of such notified goods manufactured or processed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof; and if the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company in relation to the Ganesh Flour Mills, shall, by virtue of this Act, stand transferred to, and shall vest in, the Central Government". Section 4 sets out the consequences of such vesting. Section 5 provides that notwithstanding anything contained in sections 3 and 4, if the Central Government is satisfied that a Government company is willing to comply with or has complied with such terms and conditions as the Government may think fit to impose, the Ganesh Flour Mills and the right, title and interest of the company in relation thereof which is vested in the Central Government can be vested in turn in such Government company under a notification issued by the Central Government. Sub-section (2) of section 5 says that where such further vesting takes place "the Government company shall, on or from the date of such vesting, be deemed to have become the owner of the Ganesh Flour Mills" and all the rights and liabilities of the Central Government in relation to the Ganesh Flour Mills shall become the rights and liabilities of such Government company on and from the date of such vesting. It is in pursuance of section 5 that Ganesh Flour Mills was vested by the Central Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be appropriate to set out the said section as well: "22. Every contract, entered into by the company in relation to the Ganesh Flour Mills which has vested in the Central Government under section 3, for any service, sale or supply and in force immediately before the appointed day, shall, on or before the expiry of a period of thirty days from the appointed day, cease to have effect unless such contract is, before the expiry of that period, ratified, in writing, by the Central Government or the Government company and in ratifying such contract the Central Government or the Government company may make such alteration or modification therein as it may think fit: Provided that the Central Government or the Government company shall not omit to ratify a contract and shall not make any alteration or modification in a contract- (a) unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to the interests of the Central Government or the Government company; and (b) except after giving the parties to the contract a reasonable opportunity of being heard and except after recording in writing its reasons for refusal to rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant-corporation shall equally be liable to reimburse the selling dealers in that behalf as well. We may now take up the main question urged before us, viz., the liability, if any, of the appellant-corporation to issue declaration forms or to reimburse the selling dealers (as directed hereinabove) in respect of the period prior to April 23, 1984. This calls for an examination of the relevant provisions of the Acquisition Act, which we have set out hereinabove. Section 5(2), the relevant portion whereof has already been extracted hereinabove, says that with effect from the date of vesting of the Ganesh Flour Mills in the corporation, the corporation shall take over the rights and liabilities of the said Government company (Ganesh Flour Mills, which had become the Government company on its statutory vesting in the Central Government on January 28, 1984). Sub- section (1) of section 6 clearly states that "every liability other than the liabilities specified under sub-section (2) of the company in relation to the Ganesh Flour Mills in respect of any period prior to the appointed day shall be the liability of the company and shall be enforceable against it and not against Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or whether it makes the appellant-corporation liable to issue declaration forms for purchases made prior to April 23, 1984. The first thing to be noticed is that section 22 and section 6 being provisions of the same enactment have to be construed harmoniously; the effort should be to give effect to both. Be that as it may, let us see what does section 22 say. It says that a contract entered into by Ganesh Flour Mills Co. Ltd., with respect to the said mills, for any service, sale or supply and which was in force immediately before the appointed day (January 28, 1984) shall on and from the expiry of a period of thirty days from the appointed day cease to have effect unless such contract is, before the expiry of the said period, ratified in writing by the Central Government or the Government company (appellant-corporation), as the case may be. Even where the Central Government or the appellant-corporation ratifies such contract, it is open to them to make such alterations or modifications therein as they may think fit. The proviso to section 22 says that the Central Government or the appellant-corporation shall not omit to ratify a contract and shall not make any alteration or modif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the supply orders issued by the Ganesh Flour Mills (prior to its vesting under section 3 of the Acquisition Act). The period subsequent to vesting in appellant-corporation was not in dispute as explained above. Whereas the vesting in Central Government-as also in the appellant-corporation-was in the year 1984, the present writ petitions were filed in 1987 (one writ petition) and in 1990 (the rest). If the petitioners wanted to question the non-ratification of any particular contract within thirty days of the date of vesting, they should have come to court soon after the expiry of the said thirty days from the date of vesting. If they had done so, the question would then have arisen whether section 22 is attracted to such a contract, whether the contract which they were seeking to enforce was "a contract.........for any service, sale or supply and in force immediately before the appointed day" and so on. Such a writ petition would also have given an opportunity to the Central Government and the appellant-corporation to explain and put forward their reasons for not ratifying the contract. We are of the opinion that having regard to the pleadings in the present writ petitions and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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