TMI Blog2010 (1) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... er under the Tamil Nadu General Sales Tax Act or under the Central Sales Tax Act. Therefore, necessarily, the transaction has to be treated as one of loan or barter and not sale. W.P. No. 9356 of 1998 is dismissed as infructuous. W.P. No. 9357 of 1998 is allowed. There will be a writ of declaration declaring the transaction in the name and style of "procedure for loan transactions of crude oil between the oil companies" pursuant to the procedure adopted by the Oil Co-ordination Committee as a simple barter or loan transaction without the element of sale. - W.P. Nos. 9356, 9357 of 1998 - - - Dated:- 22-1-2010 - SASIDHARAN K.K. , J. ORDER:- K.K. SASIDHARAN J. The dispute relating to the taxability of the transaction regarding import of crude oil and the related loan transactions by a public sector organization as per the directions of the Oil Co-ordination Committee is the issue involved in this writ petition. W.P. No. 9356 of 1998 W.P. No. 9356 of 1998 is directed against the proceedings of the Assistant Commissioner, Central Assessment Circle IV, Chennai, in CST 2087/92-93 dated March 30, 1998, levying sales tax on the loan transaction involving the petitioner-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdination Committee from time to time. Some times, it would so happen that the entire cargo would be allotted to the bill of lading holder or in part to the bill of lading holder with the remainder being allotted to some other oil company or in the alternative the entire cargo may at times be allocated to any other oil company as per the direction of the Oil Co-ordination Committee. After such import, the bill of lading company has to pay the f.o.b. value in Indian currency to the canalizing agent, viz., the Indian Oil Corporation Ltd. within thirty days from the bill of lading and the said period is known as the due date . In the event the cargo was received in part or in full, by or allocated to an oil company other than the bill of lading holder, the said oil company would be required to deposit with the bill of lading holder company an amount equivalent to the value of cargo received by them. This transaction partakes of the character of a loan of crude oil against a security deposit from the bill of lading holder to the actual receiver/allottee of the crude oil. The cargo so received by the allottee oil company is thereafter returned to the bill of lading holder once a fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92-93, the assessing officer passed an order of assessment on March 30, 1998 by treating the alleged crude oil loan transactions of the petitioners, totalling Rs. 14,08,90,30,185 as inter-State taxable sales not covered by C forms, and levied tax at eight per cent and penalty at 150 per cent under section 9(2A) of the Central Sales Tax Act, 1956 read with section 12(5)(iii) of the TNGST Act, 1959. (b) The petitioner has filed the instant writ petitions during July 1998. However, even before initiating the writ proceedings they have filed a statutory appeal on April 30, 1998 itself before the Deputy Commissioner (CT), Appeals. The appellate authority as per order dated March 30, 2000, remanded the matter to the first respondent for fresh consideration and to decide the taxability of the loan transactions. (c) Since the petitioner has already availed of the alternative remedy provided under statute, W.P. No. 9356 of 1998 is not maintainable. Since the assessment order has already been set aside and the matter was remanded to the assessing authority, the very writ petition in W.P. No. 9356 of 1998 has become infructuous. (d) There is no case made out for a writ of prohibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the allottee refinery to the lending refinery. Allotments and diversions by way of loan were made by the Oil Co-ordination Committee exercising statutory power. (d) Every month, a crude slate meeting would take place at the office of the Oil Co-ordination Committee, Bombay. In the crude slate meeting, the total requirement of crude for each and every refinery for the ensuing month would be ascertained after taking into account the stock of crude with each refinery at the beginning of the month and production for that month. Most of the crude requirement of the country is procured under term contract entered into by the Government of India on Government to Government basis. The rest of the crude requirement of the country is procured on spot purchase basis. Under the term contract basis, crude is uniformly supplied by the foreign supplier to various refineries located in India as decided by the Oil Co-ordination Committee at the crude slate meetings. (e) The Oil Co-ordination Committee would enter into an agreement called Contract of Affreightment (COA) with the Shipping Corporation of India under which all the oil tankers of the Shipping Corporation of India would be char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made at the crude slate meeting. There are cases where the entire crude load was received by another oil company instead of the bill of lading holder in which case the oil tanker would not touch the bill of lading holder port at all. This would still be treated as loan from the bill of lading holder to the receiving company. (h) The Oil Co-ordination Committee has formulated the scheme in such a way that the transactions would be adjusted subsequently whenever fresh allotment was made to a particular oil company. Therefore, the transaction was devised only in public interest and there was no allotment of sale in the said transaction warranting imposition of local as well as Central sales tax. Views of the Government of India The Government of India through the Ministry of Petroleum and Natural Gas filed a detailed counter-affidavit indicating the reasons for creating a body in the name and style of Oil Co-ordination Committee and the nature of transactions relating to import of crude oil. The counter-affidavit reads thus: (a) The Oil Co-ordination Committee was constituted by the Government of India as per resolution dated July 14, 1975. Consequent to the dismantl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantity to quantity basis irrespective of the value or the type of crude oil given or taken on loan basis. The principal accounts were (i) crude oil received on loan account and its return, and (ii) an account for security deposit and operation of a pool account. Variations in values, including differential in f. o. b. and freight, were adjusted as per the norms in the Crude Oil Price Equalization Account (COPE) and C F pool account, respectively, maintained by the Oil Co-ordination Committee. (f) The transactions were neither sale within the meaning of local Sales Tax Act nor an inter-State sale within the meaning of the Central Sales Tax Act. The allocations were made beyond the customs barrier and there was no occasion for the vessels to touch the Tamil Nadu port so as to tax the transaction, treating it as a local sale or a sale in the course of interState trade. (g) Individual oil companies had no say in these transactions and the loan transactions were in vogue for nearly two decades up to March 1998. Oil companies acted only as per the direction of the Oil Co-ordination Committee. The main purpose underlying the Co-ordination of the import of crude oil was to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no question of treating the transaction as a sale in the State of Tamil Nadu. (iii) The sale is also not liable under the Central sales tax, treating it as an inter-State sale. The allocation and re-allocation by way of loan transactions were all done and materialized beyond the customs barrier and as such, there was no element of inter-State sale. The learned senior counsel appearing for respondents Nos. 5 to 8 supported the case of the petitioner. According to the learned senior counsel, both under common law and statute law, to constitute a transaction of sale there should be an agreement, express or implied, relating to goods to be completed by passing of title in those goods. The transaction in question has no characteristics of a sale and in fact, it was a simple loan transaction between two oil companies and that too as per the direction of the statutory body appointed by the Government of India. The transaction was not between two private companies. It was only the Oil Co-ordination Committee who decides at all point of time to allocate and re-allocate the crude oil to the oil refineries. Therefore, it was not possible for one refinery to give crude oil to anothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) The first respondent was exercising statutory functions as assessing authority under the Tamil Nadu General Sales Tax Act as well as under the Central Sales Tax Act, and as such, he was having jurisdiction to consider the assessment and to decide the nature of transaction. Therefore, the question of granting a writ of prohibition does not arise. (ii) The petitioner has got an appeal remedy by way of filing an appeal in case the original authority negatives the plea regarding the nature of transaction. Therefore, the writ petition is clearly not maintainable. (iii) The petitioner has suppressed the fact that they have already filed a writ petition before this court in W.P. No. 11301 of 2008 wherein the learned judge was pleased to direct the assessing authority to go ahead with the assessment proceedings. In such circumstances, it was not proper on their part to prosecute this writ petition. (iv) The assessment order challenged in W.P. No. 9356 of 1998 was set aside on appeal and the original authority was directed to decide the matter afresh. Therefore, it was open to the petitioner to produce all the documents before the assessing authority to substantiate their conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting was attended by the Secretary (Co-ordination), Cabinet Secretariat, Director of Petroleum and Natural Gas and other higher officials of the Ministry of Petroleum and Natural Gas, Cabinet Secretary as well as Additional Legal Adviser, Department of Legal Affairs. The Petroleum Corporations were represented by their managing director as well as officers in the level of general manager. In the said meeting, the Secretary to the Government, Commercial Taxes and Religious Endowments, Government of Tamil Nadu, submitted his views that the transaction was essentially a sale in view of the presence of essential ingredients for a sale like (i) a buyer and a seller; (ii) a commodity or goods; (iii) transfer of property in the good from the buyer to the seller under a contract; (iv) price or money as consideration for the transfer under a contract of sale or purchase. The Cabinet Secretary was of the view that the arrangement was essentially one of barter and it was not a sale. It was unanimously decided that the matter should be looked into afresh by the Commercial Taxes Department and to decide as to whether the transaction was one of sale or barter. The representatives of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficials of the Cabinet Secretariat. The meeting discussed the matter once again and ultimately the committee observed that there was no consensus among the parties as to whether the disputed transactions were loan or sale and as to whether endorsement of the bill of lading was necessary to claim exemption from levy of tax under section 5(2) of the Central Sales Tax Act and non-endorsement vitiated the legality of the transactions. Therefore, the parties were requested to inform the High Court so as to proceed further to decide the writ petition on the merits. Accordingly, the writ petition was taken up for hearing. Discussion The petitioner is a public sector oil refinery. Respondents Nos. 5 to 9 are also engaged in refining petroleum products as well as in the distribution of petroleum products throughout the territory of India. Petroleum is an essential commodity. The prices of all other commodities directly relate to the price of petroleum products. Any increase in the cost of petroleum would naturally increase the cost of other products. Therefore, the Government enacted the Petroleum Act, 1934 to consolidate and amend the law relating to the import, transport, storage, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure for loan transactions The Oil Co-ordination Committee followed a procedure known as procedure for loan transactions of crude oil between the oil companies . The salient features of the loan transactions of crude oil read thus: (i) When a full parcel of crude is loaned by one company to another, the receiving company will have to account for the full parcel against the bill of lading. The loaning company should advise the receiving company the full details as per the bill of lading. The receiving company should escalate the receipted quantity by 0.5 per cent and the remaining quantity as compared to the bill of lading quantity should be claimed from the carrier. (ii) When a part of cargo is received as loan from one company by another company against the bill of lading for the full parcel, the company receiving loan parcel should advise the actual receipted quantity as per their outturn to the last port of call and would apportion the net loss on the basis of the total receipt as per the outturns. The loss to be claimed on the carrier by the final port of discharge will be arrived at by escalating the outturns by 0.5 per cent and deducting this quantity from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it from the loaning company which was paid to them when the loan transaction took place. The deposit shall be returned on the loan repaying company on the date of their remittance to their supplies by bank transfers. The Oil Co-ordination Committee was monitoring the entire crude oil import. The various documents produced by the petitioner in the typed set of papers show the continuous monitoring by the Oil Co-ordination Committee. The pending stock position at different refineries was taken into consideration for the purpose of allotment and re-allotment. To take an illustration, the minutes of the meeting of Oil Co-ordination Committee dated April 29, 1987 show that the allocation made to some of the oil companies was cancelled and it was re-allocated to other oil companies depending upon their requirement. The core issue to be decided in this matter is as to whether the subject transaction was a loan transaction or a sale within the meaning of section 2(n) of the Tamil Nadu General Sales Tax Act and section 2(g) of the Central Sales Tax Act, 1956. Section 2(n) of the Tamil Nadu General Sales Tax Act defines sale thus: 'sale' with all its grammatical var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof for cash, deferred payment or other valuable consideration; (vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, but does not include a mortgage or hypothecation of or a charge or pledge on goods. The definition of sale under the Tamil Nadu General Sales Tax Act shows that for a transaction to attract or suffer tax under the Act, the transaction should fulfil the following criteria: (i) buyer and a seller; (ii) commodity or goods; (iii) transfer of property in the goods from the buyer to the seller under a contract; (iv) price or money as consideration for the transfer under a contract of sale or purchase. The question is as to whether the loan transaction contains any of the above elements of sale. In order to consider the issue as to whether the transaction was one of barter or sale, it is necessary to consider the nature of import involved in the matter. The Government of India constituted the Oil Co-ordination Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called loan transactions of crude oil was evolved by the Oil Co-ordination Committee. The allotment of crude oil and loan transactions were administered by none other than the Oil Co-ordination Committee. The Oil Co-ordination Committee adopted a prescribed procedure to operate the loan transaction and for continuous monitoring. The individual oil refineries have no independent role in the matter of allocation or re-allocation of crude oil. The quantity to be imported has to be only decided by the Oil Co-ordination Committee. It was only the process of import which would be done by the Indian Oil Corporation, viz., the canalizing agent. In the crude slate meeting convened in the office of the Oil Co-ordination Committee at Bombay every month, the total requirement of crude for each and every refinery for the ensuing month would be ascertained after taking into account the stock of crude with each refinery at the beginning of the month and production for that month. Most of the crude requirement of the country would be procured under term contracts entered into by the Government of India on Government to Government basis. It was only the rest of the crude that would be procured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill of lading holder company or to the bill of lading holder and the crude receiving companies where the crude was shared by more than one company besides bill of lading holder, as per the allocations made by the Oil Co-ordination Committee. It was open to the Oil Co-ordination Committee to change the allocation or to revise the same. In case the Oil Co-ordination Committee was of the view that there should be re-allocation of crude oil, in such cases, in respect of the bill of lading holder, the crude oil would be re-located to another refining company and in which event, the oil tanker would not even touch the port of discharge of the bill of lading holder. This transaction would be treated as loan to the receiving company. The details furnished in the counter-affidavit filed on behalf of Government of India also show that the very same oil tanker which discharged the crude at the port of the bill of lading holder company would not call at the port of the other receiving company but instead, the quantity allocated to the other receiving company would be transshipped to some other oil tankers in the mid sea which discharged the crude to the receiving company. The quantity so dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate mentioned in the invoice. The freight has to be paid only by the bill of lading holder on completion of discharge and on receipt from the Shipping Corporation of India. Since the transaction involves huge financial implications, the bill of lading holder would take security deposits towards f. o. b. and freight cost from the receiving companies in respect of the quantity loaned by them. The value of the crude given on loan would be shown in the books of the bill of lading holder as crude oil issued on loan account and corresponding security deposits given would be shown as deposits received from other oil companies . (ii) The crude given on loan would not form part of the crude oil stock in the books of the bill of lading holder. In the books of the receiving company, the value of the crude oil received on loan would be shown as crude oil received on loan account and corresponding security deposits given would be shown as deposits with other oil companies . When the other oil company was nominated as bill of lading holder and the earlier bill of lading holder nominated as the receiving company, the crude received on loan was either fully or partly returned, depending o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or type of crude oil. The shifting of place in the transaction by way of allocation and re-allocation was made only by the Oil Co-ordination Committee constituted by the Government of India. Shifting of place was not under the contract of sale. There was no money factor in the transaction. It was an occasional movement on the basis of the allocation and re-allocation made by the Oil Co-ordination Committee on account of the exigencies of maintaining refinery stocks. When the deposit was taken by the bill of lading company and crude oil was received by the borrower company, it was not purchase in the hands of the borrowing company. There was no question of local sale in the matter. Allocation and re-allocations were made by the Oil Co-ordination Committee and it would be effected even before the ship enters the territorial waters of India and in any case, it would be concluded before the ship enters the customs barrier. The transaction would not fall under the term sale within the purview of the Tamil Nadu General Sales Tax Act or under the Central Sales Tax Act. The loan received by the borrower company would at the most only be a purchase in the course of import. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It would also involve higher transportation cost. In case orders were placed by a canalizing agent for larger quantity, they would be in a position to bargain for a better price. Similarly, transportation cost also would be considerably reduced. The Central Government in their earnest efforts to maintain uniformity in the price of petroleum products evolved this unique scheme. There was also another advantage for this system as some ports in India like the port of Haldia and Cochin have no storage facility for storing such huge quantity of crude oil. Therefore, by way of monitored allocation, the demand of oil refineries in those places were also met. The petitioner or the other oil corporations have no option in this transaction. It was not possible for the oil corporations to engage in the sale or purchase of crude oil. The petitioner by giving loan of crude oil on deposit and by receiving crude deposit, was acting only as a post office. In fact, the role of a bill of lading holder in the matter of granting loan was only as an agent of the Oil Co-ordination Committee. Import was always made in the name of Indian Oil Corporation, being the canalizing agent. Authorities o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the sale made by MMTC in favour of SAIL was a sale in the course of import and therefore, not liable to sales tax either under the local tax or under the Central Sales Tax Act. The relevant observation would read thus (at page 438 of 111 STC): 11. The facts aforestated, based upon documents, show that the bill of lading had been endorsed in favour of SAIL while the consignment of the said coils was still upon the high seas. The sale, therefore, was a sale in the course of the import of the said coils into the territory of India; it was effected by transfer of the documents to the said coils before they had crossed the limits of the customs station at Paradeep port. The position would be the same in respect of the goods sold to Paradeep Phosphates Ltd. . . . 13.. The aforesaid sales being covered by the provisions of the latter part of section 5(2) read with section 2(ab) of the Central Sales Tax Act, they are sales in the course of import and not liable to sales tax. In Deputy Commissioner (C. T.), Coimbatore v. Lakshminarayana Textiles (P.) Ltd. [1971] 28 STC 288 (Mad), the issue before a Division Bench of this court was as to whether the cotton borrowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over to the total for the purpose of sales tax. When the matter was challenged before the High Court, it was held that the transaction was a clear case of deposit and it was not a sale. The Supreme Court confirmed the decision of the High Court by rejecting the contentions made on behalf of the State. The relevant paragraph reads thus (at page 176 of 105 STC): 7. If the State's contention is accepted that sale of bottles took place when the bottles with beer were supplied by the manufacturer to the wholesaler and again by the wholesaler to the consumers, then it will have to be held that sale of bottles also took place when the consumers returned the bottles to the dealers. Therefore, the consumers will be liable to pay sales tax when they return the bottles by taking back the deposits. This proposition was countered by arguing that there was a single point tax on sale of bottles. If that be so, then the charge of tax, if any, would fall on the first sale by the principal, i.e., United Breweries Company Limited. The assessee was a middleman and could not be made liable to pay sales tax on account of 'sale' of the bottles to the retailers or the consumers in any even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome other valuable consideration it may be an exchange or barter but not a sale. The facts demonstrated in this case clearly show that at no point of time, there was a sale or purchase within the territory of the State of Tamil Nadu. Transactions always represented goods in the high seas at the time of determination/designating the lending refinery. Similarly, transit directions were issued by the Oil Co-ordination Committee and its canalizing agent Indian Oil Corporation, when the vessels were afloat for discharging crude oil to refineries and as such, lending was made when the vessels were outside the State of Tamil Nadu. The crude oil delivered either by way of fresh loan or settlement of earlier loan was always by direct shipment from overseas countries into the refineries. There was no occasion to discharge the crude oil from the refinery of the petitioner at Chennai to different destinations in other States. Copies of the invoices and the bill of lading as found in the typed set of papers clearly show the allocation and re-allocation made by the Oil Co-ordination Committee. Invoices were raised only in the name of the Indian Oil Corporation Ltd. being the canalizing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, even if the transaction was taken as purchase by the loaning State, treating the bill of lading company as a seller, it would not enable the State to impose tax as it was only in the course of import. Whether the petitioner is entitled to a writ of prohibition? A writ of prohibition is a judicial writ, issued by a superior to an inferior court thereby preventing the inferior court from usurping jurisdiction with which it is not legally vested. This writ is issued primarily to compel the courts and quasi-judicial authorities to keep them within their limits of jurisdiction. The question is as to whether writ of prohibition could be issued by this court in the matter. It is trite that the assessing authority is a creature of the statute. The assessing authority is defined under section 2(c) of the Tamil Nadu General Sales Tax Act, as any person authorized by the Government or by an authority empowered by them, to make any assessment under the Tamil Nadu General Sales Tax Act. Section 12 of the Tamil Nadu General Sales Tax Act deals with the procedure to be followed by the assessing authority. The assessment in respect of a dealer shall be on the basis of the return rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the transaction was a sale or a loan was correct. Merely because the assessing authority has taken a decision to treat the transaction as sale, it cannot be said that he was not having the jurisdiction to take a decision in the matter. The correctness of the decision taken cannot be equated with absence of jurisdiction. In Arun Kumar v. Union of India [2006] 286 ITR 89; [2007] 1 SCC 732 the Supreme Court explained the concept of jurisdiction thus (at page 121 of 286 ITR): 84. From the above decisions, it is clear that existence of 'jurisdictional fact' is sine qua non for the exercise of power. If the jurisdictional fact exists, the authority can proceed with the case and take an appropriate decision in accordance with law. Once the authority has jurisdiction in the matter on existence of the 'jurisdictional fact', it can decide the 'fact in issue' or adjudicatory fact. A wrong decision on 'fact in issue' or on an 'adjudicatory fact' would not make the decision of the authority without jurisdiction or vulnerable provided essential or fundamental fact as to existence of jurisdiction is present. In Y. Narayana Chetty v. Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction. It is true that his finding on the issue as to whether the transaction was a sale or a loan was erroneous. However, it cannot be said that he proceeded to act without or in excess of jurisdiction. Similarly, it cannot be said that his act was beyond the provisions of the Tamil Nadu General Sales Tax Act or the Central Sales Tax Act. In case the assessing authority took a wrong decision or his finding was perverse, the remedy was not a writ of prohibition but it was only a writ of certiorari. Therefore, the petitioner is not entitled for a writ of prohibition. How to mould the relief Article 226 of the Constitution of India empowers the High Court to issue writ or direction or order in the nature of prohibition, quo warranto, mandamus or certiorari for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose. This article is couched in the widest possible terms inasmuch as the High Court is given jurisdiction to issue directions, orders or writs, including writs in the specified category. Therefore, the question is as to whether the High Court is empowered to issue an appropriate writ when it is found that the writ as pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given powers to issue not only the prerogative writs but also writs for any other purpose clearly shows that the jurisdiction is not confined to prerogative writs alone. It is true that there are certain self-imposed limitations on the powers of the High Court to issue writs. When a litigant approaches the High Court with a prayer to issue a particular writ and on an examination of the material facts, if it is found that he is not entitled for the said writ, it is open to the High Court to issue an appropriate writ. The attempt of the court in such cases should be to mould the relief rather than dismiss the writ petition on account of a formal defect in couching the prayer. Technicalities have no say in exercising the writ jurisdiction by the High Court. The courts are functioning only for rendering justice. It should be the attempt of the courts to avoid multiplicity of proceedings. To the extent possible, the litigant should not be driven to file another round of litigation which would involve delay and expense besides developing animosity to the very justice delivery system. The court should assist in resolving the disputes between the parties. It should also be the attempt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e committee in the matter of import of crude oil and the allocation and re-allocation on loan basis. There is also no question of relegating the parties to the appellate remedy or to approach the assessing authority once again to consider the matter afresh. As per the orders of this court, the Cabinet Secretary convened a meeting between the representatives of the petitioner-industry as well as the officials of the Government of Tamil Nadu. In the said meeting, the Secretary, Department of Commercial Taxes, Government of Tamil Nadu, categorically stated that the transaction was a sale. It was only in such circumstances, the attempt made by the Cabinet Secretary to settle the issue failed and the parties were directed to approach the High Court once again to resolve the issue. When the higher officials of the tax department have taken a concrete decision on the basis of the inputs received from the authorities of the Sales Tax Department, no officer in the hierarchy in the Department of Commercial Tax would take a decision contrary to the opinion expressed by the Secretary himself. In fact, the opinion expressed by the Secretary was not his personal opinion. It was the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The plaintiff then claimed in an action instituted by him a declaration that his purported dismissal was illegal, ultra vires, and invalid, and also damages for wrongful dismissal. The trial court granted the declaration, and also damages. The court of appeal set aside the declaration. The House of Lords restored the declaration, for in their view the purported dismissal was a nullity, since the local board had no power to delegate its disciplinary functions. Prima facie, jurisdiction of the court in an appropriate case to declare an order passed by a statutory body, even if the order relates to the termination of the employment of a servant of the body, may not be denied. 8.. The contention raised by counsel for the Board that a petition for a declaration that the employment of the appellant was not lawfully terminated and on that account the Board be commanded to treat the appellant as lawfully in service cannot be maintained, must be rejected. The jurisdiction to declare the decision of the Board as ultra vires exists, though it may be exercised only when the court is satisfied that departure is called for from the rule that a contract of service will not ordinarily be specif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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