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TMI Blog2007 (10) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner that as per the condition No. 12(i)(ii)(iii) of the sandal wood sales notice in C. No. 2860/99/S dated March 21, 1999, an amount of Rs. 11,36,500 already paid by the petitioner on April 28, 1999 be lapsed to the Government and 15 metric tonnes of sandal wood purchased by the petitioner on April 28, 1999 in lot Nos. 14, 38 and 40C, be resold at the petitioner's risk in public auction. Writ Appeal Nos. 412 to 414 of 2003 are filed against the order dated October 25, 2002 allowing Writ Petition Nos. 7499, 7500 and 8359 of 2000 filed by the respondents herein seeking for the relief of writ of certiorarified mandamus calling for the records of the second respondent, the District Forest Officer culminating in its communications dated April 1, 2000, January 23, 2000 and November 20, 1999, respectively, and to quash the same and consequently forbear the respondents from making any claim or demand from the petitioner for payment of sales tax, demurrage charges or penal interest in respect of purchase of sandal wood made by the petitioner in the auction conducted and confirmed on November 20, 1999, and February 2, 1999. Writ Appeal No. 3513 of 2004 was filed against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for exemption could be considered by the District Forest Officer on merits and in accordance with law within a period of one month from the date of receipt of a copy of the order. Even though the abovesaid order was passed after hearing the Special Government Pleader on September 15, 1999, on the very next day, the second respondent called upon the petitioner to settle the amounts within seven days indicating that on failure, action would be taken to forfeit the amount already deposited. Subsequently, a telegram was also issued by the second respondent, the District Forest Officer. On receipt of such a telegram, the petitioner gave a reply telegram by which the attention of the second respondent was drawn to the order passed by this court dated September 14, 1999 and requested to consider its request regarding exemption of sales tax as directed by this court. On September 29, 1999 the second respondent passed an order directing the petitioner to pay the balance sale amount, penal interest, demurrages, etc., as per the sale condition by referring to the order impugned in Writ Petition No. 15094 of 1999. By that letter, the petitioner was further directed to produce foreign b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent should not claim any demurrage or penalty. 5.. The petitioner is required to establish before the concerned authority that it is not liable to pay sales tax under section 5(3) of the Central Sales Tax Act with respect to the sandal wood purchased pursuant to the auction dated April 28, 1999. This should be done within a period of five months from today. If the petitioner is not able to establish that it is entitled to the benefit of exemption from sales tax, the respondent may enforce the bank guarantee and realise the amount after the lapse of the aforesaid period of five months. On the other hand, if the petitioner is able to establish its case that it is not liable to pay the sales tax, the bank guarantee should be returned to the petitioner. Subject to the above conditions, the writ petition was allowed." Aggrieved by this order of the learned single judge, Writ Appeal No. 405 of 2003 is filed by the respondent-department. The learned Additional Advocate-General, though originally submitted before this court that the issue in these cases is covered by the decision of the Supreme Court in Civil Appeal Nos. 826 and 829 of 2001 made on May 2, 2006, subsequently, took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the petitioner and the other contention that the petitioner is liable to pay penal, demurrage charges has to be rejected as the petitioner was ready to comply with the directions given by the learned single judge following the judgment of the Division Bench referred to supra. It was further stated before this court that the Division Bench judgment in Writ Appeal Nos. 94 to 96 of 2000(1) was taken to the Supreme Court by the department in Civil Appeal Nos. 826 and 829 of 2001(2). In the meantime, the petitioner and the respondent complied with the directions and the Supreme Court taking note of the fact that the department itself found that the purchase was made pursuant to the prior foreign order, granted the relief to the auction purchaser and accepted the view taken by this court. He prayed for dismissal of the appeal. Heard the learned counsel on either side and perused the materials available on record. (1)Lavanya Enterprises v. Secretary to Government of Tamil Nadu [2006 145 STC 442 (Mad.) (2)See at page 122 infra. There is no dispute that the petitioner was the successful bidder and paid the earnest money deposit and 20 per cent of the bid amount as requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racted in paragraph 4 of the order of the learned single judge and for the sake of convenience the same is reproduced here: ". . . In respect of the claim of exemption under section 5(3) that claim has to be made by the forest department in the A10 returns filed enclosing documentary evidence. As a precaution, the forest department may accept bank guarantee at the time of auction sale from the successful bidders who claim that the purchase was for the purpose of fulfilling prior agreement from the foreign buyer. A timelimit of three months may be fixed by the forest department to get documentary evidence from the buyer that the goods were actually exported along with form 'H'. When such form 'H' and other documents were presented to the assessing officer by the forest department and are found to be in order by the assessing officer, exemption can be granted on such transactions and the forest department may return the bank guarantee. Wherever there is no proof to claim the exemption provided under section 5(3) of the Central Sales Tax Act, the forest department may encash the bank guarantee and remit the amount to the Commercial Tax Department . . ." When such cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has come forward with the plea that the purchase of sandal wood by it in the public auction was in pursuance of an agreement with the foreign buyers, the objection raised by the department that the purchaser has not produced any document at the time of conclusion of sale and so they could not claim any benefit under section 5(3) of the said Act, in view of the condition No. 27 of the sale notice, could not be countenanced. Having held so, the Division Bench also observed that in view of the ratio laid down by the Supreme Court in the judgments referred to supra, the purchaser was entitled to the benefit under section 5(3) of the Act. The other contention raised that the purchaser has accepted the terms and conditions and participated in the auction and purchased sandal wood and cannot thereafter wriggle out and dispute the terms under article 226 of the Constitution has been answered in para 16 of the judgment which was to the effect that it was not in dispute that if the purchaser satisfied the requirement of section 5(3) of the Act he was entitled to the benefit under the said provision. The contract could not stand in the way of the purchaser getting the statutory benefit. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent from bringing the sandal wood for auction without effecting delivery to the petitioner of the quantity of the goods for which the petitioner has become that successful bidder. In those writ petitions, originally interim orders were granted in favour of the petitioner. The respondent-department filed a counter and an application to vacate the interim order. In that affidavit, in paragraph 5, the respondent has in unequivocal terms stated as follows: ". . . In any event, if ultimately the writ petitioner succeeds in the appeal, then it is the duty of the State to effect delivery of sandal wood for which purpose, there is sandalwood and the apprehension that sandalwood will be vanished is untenable. I state that if ultimately, it is found that the petitioner is entitled to delivery of sandalwood it will be definitely delivered to him." The Division Bench by its order dated March 27, 2003 accepting the undertaking and recording the above extracted portion of the affidavit, vacated the interim order. Thus, in a solemn affidavit the respondent having accepted and agreed to deliver the goods if the petitioner succeeded in the appeal, it is not open to them to contend that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold to him within 75 days from the date of receipt of confirmation order. If he fails to take delivery of woods after all the amounts due on such wood are paid within the voidah, the wood would be kept in double lock or single lock as the case may be until such time as agreed to take delivery thereof and he shall be liable to pay a demurrage of Rs. 30 per tonne per day for each day the wood so kept in double lock or single lock beyond 75 days. On a reading of the above condition it is clear that on payment of the entire amount by the successful bidder and on handing over of the goods to the purchaser, if the purchaser failed to take delivery within the voidah date, the woods would have to be kept in double or single lock as the case may be until such time as agreed to take delivery thereof and the purchaser shall be liable to pay a demurrage of Rs. 30 per tonne per day for each day the wood kept in double or single lock beyond 75 days from the date of confirmation. In this case, except the payment of earnest money deposit and 20 per cent of the bid amount, the other amounts are yet to be paid and are in dispute. Even the other amounts paid pursuant to the direction issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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