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TMI Blog1989 (4) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... under the control of the Union. The first respondent-Board was constituted to achieve that object. Coffee cultivation is carried on in India in the States of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka. Every owner of land planted with coffee plants, has to get himself registered as an owner in respect of his estate, with the registering officer appointed in that behalf by the State Government (vide section 14). Section 28 requires every establishment for curing coffee to obtain a licence from the Board to operate as such. The control of the sale, export and re-import of coffee is regulated by the provisions contained in sections 16 and 26 of the Act. Section 16 enables the Central Government by notification in the Official Gazette, to fix the price or prices at which coffee may be sold, wholesale or retail, in the Indian market. No registered owner or licensed curer or dealer shall sell coffee, wholesale or retail, in the market at a price higher than that fixed under the section. Section 17 provides that no registered owner shall sell or contract to sell in the Indian market, coffee from any registered estate, if by such sale, the internal sale quota allotted to that estat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses for which the general fund is to be applied are specified in sub-section (2), namely to meet the expenses of the Board, and others. Section 32 speaks of the pool fund to which shall be credited all sums realised by the Board by sales of coffee from the surplus pool. The pool fund is to be applied only for the purposes specified in sub-section (2), namely, to make payments to registered owners of the value of the coffee which they have delivered for inclusion in the surplus pool, the cost of storing, curing and marketing coffee, deposited in, and of administering, the surplus pool, and for the purchase of coffee not delivered for inclusion in the surplus pool. The proviso to which reference was made earlier while referring to section 31, stipulates that if there is any excess after meeting the requirements mentioned in sub-section (2), the Board may, with the previous sanction of the Central Government, transfer the whole or any part of such excess to the credit of the general fund. 5.. Section 34 is also relevant, in that it requires the Board at such times as it thinks fit, to make payment to the registered owners who have delivered coffee for inclusion in the surplus pool, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board v. Commissioner of Commercial Taxes [1985] 60 STC 142 (Kar). §Judgment delivered by the Supreme Court on May 11, 1988 reported as Coffee Board v. Commissioner of Commercial Taxes [1988] 70 STC 162 (SC). payment of the purchase tax, in case it was held payable by the High Court of Karnataka in the pending writ petition. The Board therefore issued a communication to the pool agents, directing them to collect from the pool sale dealers like the petitioner, an amount equivalent to the purchase tax liability of the Board, as contingency deposits. This was in addition to the auction price, and was to be collected at the time the coffee was delivered to the dealers by the pool agents. A copy of this communication dated May 17, 1984 is exhibit P1. This direction from the Board obliged the petitioner and other dealers to make payment, by way of contingency deposit, of the amount mentioned in exhibit P1 at the time the coffee was delivered to them by the pool agents pursuant to the auctions. The petitioner has set forth in the statement, exhibit P2, the details of the contingency deposits made by him during the years 1984-85 and 1985-86. I must also note here that even though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal against the judgment of the High Court of Karnataka. The finance of the Board has to be managed as set out in the Act. The Board has to pay the value of the coffee pooled to the growers. No portion of the proceeds realised by the sale of the pooled coffee is retained by the Board. The entire amount is paid to the growers in instalments after meeting the expenses, and paying the "taxes". It is not open to the Board to pay the tax from out of the funds that may come into their hands in later years, as those funds will be held by them in trust for the growers, who have pooled the coffee in those years. Therefore, there will be no funds left with the Board for payment of the purchase tax levied, if ultimately their liability was upheld. In the circumstances, the Board decided to provide for the contingency of payment of purchase tax, and for that purpose to increase the reserve price so as to include the purchase tax element as well. The pool sale dealers objected to this course of action, and actually boycotted the auction fixed on May 3, 1984. (The figure "87" appearing in paragraph 9 of the counter-affidavit is a mistake for "84", as stated in the additional counter-affidavit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer for the purchase of the coffee. 17.. The facts, and the contentions, in all the other writ petitions are admitted to be similar except for minor variations, which I shall mention. In O.P. No. 10294 of 1985, this Court had issued an interim direction to the respondents not to collect the contingency deposit, and therefore, no further amount was paid in that case. In all the other cases, the contingency deposit demanded has been paid. So also, in relation to sales tax, some amount has been collected in all the cases except from the petitioners in O.P. Nos. 4804, 4822, 4953 and 4978 of 1987. 18.. The primary contention of the petitioners is that the Board is not entitled to collect contingency deposit and constitute a fund, which is not provided for in sections 30, 31 and 32 of the Act. Section 30 contemplates only two categories of funds, namely, the general fund and the pool fund, comprising the sums specified in sections 31 and 32, respectively, and therefore creation of a third category of fund consisting of the contingency deposit, is outside the purview of the Act. 19.. After hearing counsel for the petitioners, I do not find any substance in this contention. It is tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30, 31 and 32 has therefore to fail. 20.. The contingency fund was created under certain extraordinary circumstances, and in view of the dispute raised regarding the liability for payment of purchase tax. That question was in issue before the courts. The Karnataka High Court had held against the Board. The matter was pending in the Supreme Court. The Board then did what it would normally have done, namely, to fix the minimum reserve price at an amount inclusive of the purchase tax as well. But this procedure, of fixing a higher minimum reserve price for the auction on May 3, 1984, met with resistance and opposition from the pool sale dealers. They boycotted the auctions on that day. Though counsel for the petitioners denied this boycott, I am not inclined to accept their case, in the light of the subsequent events and the documents produced in the case. The Board, therefore, discussed the matter with the dealers, and also considered their representation dated May 10, 1984. If the Board did not raise the minimum reserve price, and if ultimately the liability for the tax was upheld, the amount of tax would have had to be paid out of the pool fund available for payment to the grower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese deposits without any objection, obviously because they knew full well that it was necessary in their own interests. It is only after about two years after the deposit was introduced that the notice, exhibit P4, was issued for the first time. I am therefore, inclined to infer acquiescence in the deposit on the part of the petitioners. 23.. The Board's definite case is one of provision for the deposit at the instance, and at the request of the dealers. That appears to be so, as stated earlier. If so, and if the Board has acted in accordance with the said agreement, the collection made by the Board is not open to challenge under article 226. Even if it is an unauthorised collection, it is not collection of any illegal tax, for which proceedings for refund will lie under article 226 read with article 265. It is an amount deposited in the interests of the dealers themselves, and at their instance and request. The whole thing is consensual. 24. In any case, refund of the amounts so paid cannot be had in these proceedings under article 226 because the whole thing lies in the realms of agreement and acquiescence. The petitioners' entitlement to the refund will depend upon investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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