TMI Blog2015 (2) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... nt bills of the contractor, and the contractor is entitled, thereafter, to claim refund. If a statute has conferred a power to do an act, and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any manner other than the one prescribed. Likewise KPCL/NECL cannot claim a legitimate expectation to be continued to be exempt from payment of sales tax, as the revised concession agreement itself provides for a change of law, and the steps required to be taken by the parties to the agreement in this regard. As grant of exemption is contrary to law (ie the A.P.VAT Act), KPCL cannot claim to have a legitimate expectation that GoAP would continue to grant it exemption. If a denial of legitimate expectation, in a given case, amounts to denial of a right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation, without anything more, cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Section 22(4) of the Andhra Pradesh Value Added Tax Act, 2005, is under challenge in this Writ Petition as being contrary to law, in violation of principles of natural justice, and as without jurisdiction. The petitioner herein, a public limited company, is engaged in the business of construction and development of the Krishnapatnam Deep Water Port in Nellore District, and in providing necessary infrastructural facilities for handling port operations thereat. It is the petitioners case that they were identified as being the most qualified to undertake construction and infrastructure activities of the port for, and on behalf of, the State of Andhra Pradesh; consequent thereto, a state concession contract was entered into by the State of Andhra Pradesh represented by its Principal Secretary, Roads and Buildings Department, with them on 17.09.2004; the said agreement which was to subsist for a period of 50 years inter alia, amongst other terms and conditions, provided for necessary fiscal incentives to them in respect of various fiscal levies imposed by the State in connection with the construction and development of the port project; in view of the state concession contract, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial evidence; without considering their reply, and without verifying the records, the 3rd respondent, relying on the material available with him, had passed the order dated 19.11.2013 directing them to remit ₹ 92,98,03,154/-; their account books make it clear that, in fact, no taxes were deducted by them; even otherwise, as per the concessionaire agreement dated 17.09.2004, the Government had exempted sales tax on all the inputs required for project construction; the petitioner is, therefore, not liable to deduct tax; the statutory auditors had clarified, by issuing certificates, that no deduction was made in respect of the EPC contract; only a provision, for works contract tax liability, was made in the accounts; this was disclosed as a statutory liability in the accounts; such disclosure is mandatory in order to meet the audit requirements, and cannot be construed as their having deducted tax; the 3rd respondent, in the impugned order, held that a limited review of their accounts revealed that they had deducted tax at source from September, 2007 to March, 2013; in their reply to the show-cause, KPCL had categorically stated that they were ready and willing to produce the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the respondents; the agreement contemplates exemption of all input taxes; the 1st respondent issued G.O.Ms.No.609 dated 29.05.2006 duly following the concession agreement, and directed the commercial tax department to refund the taxes paid by the petitioner; the petitioner has not deducted tax as alleged by the 3rd respondent; if the 3rd respondent is allowed to enforce the demand against the petitioner, the same would hamper progress of the project; and it would consequently affect not only the petitioners interest, but also larger public interest. In his counter-affidavit, the 1st respondent submits that the petitioner had filed the Writ Petition without exhausting the efficacious alternative remedy of an appeal under the AP VAT Act; the writ jurisdiction is not meant to short-circuit or circumvent the alternative remedies available under the Act; the petitioner has made false and incorrect statements on oath; in para 11 of their affidavit they stated that they did not recover any tax from the contractor, and the records maintained by them establish that, while clearing the running account (RA) bills, no amount was deducted from NECL; from the records submitted by the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the A.P. VAT Act; the understanding of the petitioner, regarding clause 3.16 of the concession agreement, is contrary to the provisions of the A.P. VAT Act; the State Government issued G.O.Ms.No.609 dated 29.05.2006 in terms of Section 15(1) of the AP VAT Act; the said notification came into force with effect from March, 2006, and was to remain in force till April, 2010 or the completion of project whichever was earlier; the said GO stipulated that the taxes paid by the petitioner, or their contractors or sub-contractors, shall be refunded within 30 days from the date of submission of their claims; in notification-II, annexed to the said GO, it was stated that the tax paid under Section 4(7) of the Act, for execution of the works contract relating to the project work of the petitioner, would be refunded on production of proof of remittance of the tax deducted at source in accordance with Section 22(4) of the Act; the State Government has not granted any exemption to the petitioner under the said G.O; the G.O. only enabled the contractor, who paid the tax on execution of the works contract, to obtain refund from the Government including the tax paid on purchase material used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards TDS; Section 22(3) of the Act mandated the petitioner to deduct and remit TDS from the amounts payable to the contractor for execution of the works contract; the petitioner is the contractee and has engaged NECL as the contractor for execution of the works contract of their port; the petitioner was, therefore, liable to deduct and remit amounts towards TDS; Section 22(4) mandates that, if the contractee does not deduct or deducts but does not remit TDS, such amounts are liable to be recovered from the contractee as unpaid tax; the petitioner is holding ₹ 92.98 Crores of government money deducted by them as TDS from the contractor; the petitioner cannot retain money due to the Government for its private purpose; and the Writ Petition is devoid of merits. In the affidavit filed in reply thereto, the petitioner reiterated that they did not recover any tax from the contractor; the records maintained by them establish that, while clearing the running account (RA) bills, no amount was deducted from NECL; the records submitted by them to the 1st respondent would show that they did not deduct amounts towards TDS on works contract in each of the running account (RA) bills; the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey as alleged; and they have built a modern port in the east coast of India investing huge amounts with the object of providing the country with a world class infrastructure project in the private public partnership. In the impugned proceedings dated 19.11.2013, the 1st respondent referred to his verification of the annual reports, his visit to Krishnapatnam port, to the non-payment of TDS under Section 22(4) by the petitioner, the notice of recovery dated 12.09.2013, and to the contents of the petitioners letter of objections dated 24.09.2013 and 08.11.2013, 30.11.2013 and 08.1.2013. The 1st respondent held that NECL could claim refund of the tax on the inputs used in the execution of works contract to KPCL; there was no express provision exempting the assessee from subjecting the payments, made to the contractor through R.A. bills, to TDS; the Commercial Tax Department was merely seeking remittance of the tax deducted at source as mirrored by the petitioners accounts, as it would otherwise amount to unjust enrichment; the contractor and the contractee are two separate assessable entities in the eye of law; as a contractee, the petitioner had rightly subjected the payments, mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forth his submissions, both oral and written, in support of the impugned order. It is convenient to examine the rival submissions under different heads. I. IS KPCL UNDER A STATUTORY OBLIGATION TO DEDUCT TDS FROM THE RUNNING ACCOUNT BILLS OF NECL, WHEN THE CONCESSION AGREEMENT EXEMPTS THEM FROM PAYMENT OF SALES TAX? Sri A.V. Krishna Koundinya, Learned Senior Counsel appearing on behalf of the petitioner, would submit that KPCL had entered into a revised concession agreement with the State of Andhra Pradesh on 17.09.2004 for construction of the Krishnapatnam Port on a Build, Own, Share and Transfer (BOST) basis; in terms thereof, they are not liable to pay sales tax on the inputs required for project construction; by clause 3.16 of the revised concession agreement, GoAP undertook to forego revenue streams in various forms as per the 2001 Act, more specifically exemption from sales tax on the inputs required for project construction; no restrictions were placed on such exemption; the counter-affidavit of the 3rd respondent merely supports his order, without dealing with the revised concession agreement dated 17.09.2004; for the period prior to April, 2010 (i.e., during Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Andhra Pradesh. Sri P. Balaji Varma, Learned Special Standing Counsel for Commercial Taxes, would submit that the 2001 Act, and the Concession Agreement dated 17.09.2004, are both prior in time to the AP VAT Act, 2005; the A.P. VAT Act and the Rules made thereunder fall within the meaning of change in Law in clause 2.3 of the Concession agreement; the A.P.VAT Act does not provide for exemption as was provided under the APGST Act; clause 2.3 also provides for a remedy in circumstances of a change in Law; G.O.Ms. No.609, by itself, falls within the meaning of changes in law; alternatively G.O.Ms. No.609 can be construed as remedying the situation arising from the enactment of the AP VAT Act; under clause 2.3, the GoAP has insulated itself from liabilities arising from a change in the tax laws; the petitioner was required to comply with the obligations under the changed tax law; in the light of clause 2.3 of the agreement, on the enactment of the AP VAT Act and issuance of GO.Ms. No.609, clause 3.16 stood replaced/overruled; Clause 2.3, 13.2 and 13.3 make clause 3.16 of the agreement subservient to the provisions of the new tax law in this case the AP VAT Act; the contention, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the notification. The Andhra Pradesh Infrastructure Development Enabling Act, 2001 (hereinafter called the 2001 Act), which came into force on 20.08.2001, was enacted during the APGST regime. The 2001 Act was made to provide for the rapid development of physical and social infrastructure in the State, and to attract private sector participation in the designing, financing, construction, operation and maintenance of infrastructure projects in the State, to provide a comprehensive legislation for reducing administrative and procedural delays, identifying generic project risks, detailing various incentives, detailing the project delivery process, and also to provide for other ancillary and incidental matters thereto, with a view to presenting bankable projects to the private sector, and to improve the level of infrastructure in the State of Andhra Pradesh. Section 1(3) of the 2001 Act made the Act applicable to all infrastructure projects implemented through a public private partnership in the sectors enumerated in Schedule III thereto, and to such other sectors as would be notified by the Government under the Act from time to time. Section 2(h) of the 2001 Act defines concession ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jects only if the sector policy specifically provided for the same. Among the support, to be provided by the State Government, included exemption of sales tax on all inputs required for project construction. Clause 3.16(a)(i) of the Revised Concession agreement, on which reliance is placed by Sri A.V. Krishna Koundinya, Learned Senior Counsel appearing on behalf of the petitioner, cannot be read in isolation and out of context, and should be read along with the other clauses of the agreement. It is a rule of construction, applicable to all written instruments, that the instrument must be construed as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause must be so interpreted as to bring them in harmony with the other provisions of the instrument, if that interpretation does no violence to the meaning of which they are naturally susceptible. The best construction of deeds is to make one part of the deed expound the other, and so to make all the parts agree. Effect must, as far as possible, be given to every word and every clause. Just as a document cannot be interpreted by picking out only a few clauses ignoring the other relevant on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt including extension of the concession period. It also provided for changes in tax laws and regulations and specifically provided that the concessionaire was not entitled to any compensation for any increase in indirect and/or direct tax, which the Concessionaire was liable to pay in respect of the port project. Clause 2.5 defined commencement date to mean the date of execution of the agreement. Clause 2.6 defined commercial operations date to mean the date on which KPCL was entitled to commence deep water operation of the Port in accordance with the provisions of the agreement. Clause 2.7 defined concession to mean the exclusive right and authority granted by GoAP to KPCL for designing, financing, building, owning, maintaining, operating and transferring an all weather, deep water, multi-purpose port at Krishnapatnam together with a right to levy, collect and retain appropriate port dues and tariffs for port services rendered to port users during the concession period. Clause 2.8 defined concessionaire to mean KPCL; and Clause 2.9 defined concession period to mean the period of concession as specified in Clause 3.3. Clause 2.44 defined Taxes and Duties to mean and include all ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax holiday or tax exemption on the date of commencement of the Act, to be treated as a unit availing tax deferment. Section 15(1) of the AP VAT Act merely enables the State Government, if it is necessary to do so in the public interest and subject to such conditions as it may impose, by a notification, to provide for grant of refund, of the tax paid, to any person on the purchases effected by him and specified in the said notification. Section 15(2) enables the Government to issue any notification under Section 15(1) so as to be retrospective from any day not earlier than the appointed day, and such notification would take effect from the date of its publication in the Gazette or such other earlier or later date as may be mentioned therein. Under Section 15(3), applications for refunds are required to be made in duplicate to the Commissioner within a period of six months from the date of purchase, or as the Government may prescribe in the notification, and must be accompanied by the purchase invoice in original. The power conferred on the State Government, under the AP VAT Act, is only to grant refund of the tax paid by the dealer, on the purchases effected by them, and not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement would survive as if the unenforceable clause (i.e., clause 3.16) was not a part of the agreement. Clause 13.2 of the revised concession agreement, under the head compliance with law required KPCL not only to comply with the existing laws but also future changes, if any, in the applicable laws, including taxation laws. KPCL was, therefore, obligated, in terms of clause 13.2 of the agreement, to comply with the provisions of the AP VAT Act including Section 22(3) thereof, and deduct works contract tax at source from the running bills of the contractor i.e., NECL. Further clause 13.3, under the head Taxes and Duties required KPCL to pay all taxes as defined earlier in the Agreement which, at any time, may be levied by any Government authority upon KPCLs interest in or activities covered by the Agreement. Reliance placed on behalf of KPCL, on clause 3.16 of the revised concession agreement, to contend that they are entitled for exemption from payment of value added tax till completion of the project, even after AP VAT Act came into force, is therefore misplaced. As shall be referred to in detail hereinafter, even during the period when G.O.Ms. No.609 dated 29.05.2006 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven when the income had no territorial nexus with India, or was not chargeable in India, the Government would nonetheless collect tax; Section 195(2) provided a remedy by which a person may seek a determination of the appropriate proportion of such sum so chargeable where a proportion of the sum so chargeable was liable to tax; the expression, sum chargeable under the provisions of the Act in Section 195(1), must be given weightage; further Section 195 used the word `payer', and not the word assessee ; the payer was not an assessee; the payer became an assessee-in-default only when he failed to fulfill the statutory obligation under Section 195(1); and if the payment did not contain the element of income, the payer cannot be made liable. The statutory obligation imposed by Section 22(3) of the A.P. VAT Act on KPCL, (a company registered under the Companies Act, 1956), is to deduct, from out of the amounts payable by them to NECL, in respect of the works contract executed for them, an amount calculated at the prescribed rate, and to remit such amount to the Government. It is not even the case of KPCL that the deemed sale of goods, involved in the execution of the works c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the assessment of such liability. If there is no liability to tax there cannot be any assessment either. Sales or purchases, in respect of which the statute does not impose any liability to tax, cannot be included in the calculation of turnover for the purpose of assessment, and the exact sum which the dealer is liable to pay must be ascertained without any reference thereto. There is a broad distinction between the provisions contained in the statute in regard to exemptions from tax or refund or rebate of tax on the one hand, and the non-liability to tax or non-imposition of tax on the other. In the former, but for the provisions as regards exemption or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are, prima facie, liable to tax and the only thing which the dealer is entitled to, in respect thereof, is the deduction from the gross turnover in order to arrive at the net turnover on which tax can be imposed. In the latter, the sales or purchases are exempt from taxation altogether. If they are thus not liable to tax, no tax can be levied or imposed on them, and they do not come within the purvie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013), shows the TDS amount, amount paid and balance; this statement establishes that KPCL has deducted TDS amounts; enclosed to the Annual report for the year 2009-10 is the Auditors report and, from clause ix(a) thereof, it is evident that (i) TDS of AP works contract Tax for ₹ 1794.93 lakhs is in arrears, (ii) the said amount in arrears is the crystallised liability, and as such is undisputed; similarly the Annual Report, for the years 2010-11, shows the amount in arrears as ₹ 4056.20 lakhs; the Annual Report for the year 2011- 12 discloses TDS arrears as ₹ 6101.04 lakhs; the ledger of NECL, in the books of KPCL, for the years 2009-10, 2010-2011 and 2011- 2012 show that KPCL had, in fact, deducted tax at source; and the Statements, for the years 2009-2010, 2010-11 and 2011-12, contain the following information (a) Date of running bill, (b) Value of the work, (c) Amount deducted and credited to Works Contract Account, (d) Amount credited to Income Tax TDS account, (e) balance credited to NECL, (f) the total amount of works contract tax deducted, remitted to the Government, and the balance tax payable, (g) the balance tax payable being carried forward, and (h) amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by the contractee, together with Form VAT 200, by the 20th of the month, following the month in which the payment was received. Rule 18(2) stipulates that any amount or any sum, deducted in accordance with the provisions of Section 22(3) and paid to the State Government, shall be treated as a payment of tax on behalf of the dealer executing the works contract; and credit shall be given to the said dealer, for the period for which the amount was so deducted, on production of the certificate furnished by the contractee. Rule 18(4) stipulates that, where the contractee fails to remit such tax deducted at source within 15 days of the date of payment to the contractor, the person, authorised to make payment and to deduct tax, shall be liable to pay interest, for the delayed payment, as may be applicable under the Act. In reply to the show cause notice issued by the 3rd respondent dated 12.09.2013, for the tax period from September, 2007 to March, 2013, the petitioner stated, in their letter dated 23.09.2013, that the records maintained by them categorically established that no amount was recovered while clearing the R.A. bills. Along with the said reply the petitioner filed two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Voucher type Debit Credit 21-9-2009 By (as per details) Capital work in progress TDS Payable Works Contract Tax (Being RA-6 received towards Phase II) Journal 125,08,13,800.00 Dr 2,83,43,440.00 Cr 5,00,32,552.00 Cr 1,17,24,37,808.00 5-11-2009 By (as per details) Capital work in progress TDS Payable Works Contract Tax (Being RA-7 received towards Phase-II) Journal 82,57,82,360.00 Dr 1,65,15,647.00 Cr 3,30,31,294.00 Cr 77,62,35,409.00 30-12-2009 By (as per details) Capital work in progress TDS Payable Works Contract Tax (Being RA-7 received towards Phase-I) Journal 38,66,33,250.00 Dr 77,32,665.00 Cr 1,54,65,330.00 Cr 36,34,35,255.00 5-2-2010 By (as per details) Capital work in progress TDS Payable Works Contract Tax (Being RA-7 received towards Phase-II) Journal 58,99,60,800 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar objection is to be found in the Auditors Report for the year 2010- 11 wherein the amount in arrears is shown as ₹ 4056.30 lakhs, and the Auditors Report for the year 2011-12 wherein the amount in arrears is shown as ₹ 6101.04 lakhs. Along with their counter-affidavit, the respondents have furnished a tabular statement of the ledger account of NECL, in the books of KPCL, for the years 2009-10, 2010-11, 2011-12 and 2012-13, wherein details of the running bills of NECL are furnished including (a) the date of the running bill; (b) the value of the work as per accounts; (c) amount credited to works contract tax (WCT) account; (d) amount credited to income tax TDS account; (e) balance amount credited to NECL; (f) the total amount of works contract tax due as shown in the annual report; and (g) the amount, shown in the statement filed by the petitioner along with their reply to the show- cause notice, in the remarks column. The figures in the tabular statement tally with the figures in the Auditors reports enclosed as part of the Annual reports of KPCL, and supports the submission of the respondents that KPCL had deducted tax at source towards works contract tax, and did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45,865,680 358,380,013 2012-13 79,188,260 -- 79,188,260 1,241,422,818 76,987,652 1,164,435,166 Rupees One hundred sixteen crores froty four lakhs thirty five thousand one hundred and sixty six only. Even from their own statement enclosed with their reply letter dated 23.09.2013, filed in reply to the show cause notice dated 12.09.2013, it is clear that KPCL had deducted tax at source from the running account bills of NECL, but did not pay the entire amount, representing the tax deducted at source, to the Government. While KPCL had deducted TDS, and claim to have paid the entire deducted tax to the Government for the period from September, 2007 to March, 2008, even, on their own admission, they had deducted TDS for the subsequent years 2008-09 to 2011- 12, but had only paid a part thereof to the Government. While TDS, for ₹ 5,86,57,970/-, was admittedly deducted for the year 2012-13, KPCL failed to pay even a single ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id declaration in respect of each such invoice duly signed by the said person on behalf of Krishnapatnam Port Company Limited. The Notification was deemed to have come into force with effect from the month of March, 2006 and to be in force till April, 2010 or the completion of the said project whichever was earlier. The refund of taxes paid by KPCL or its contractors or sub- contractors, was be made within (30) days from the date of the submission of the claims. A refund can be claimed only for the tax paid and consequently NECL, as the contractor for the construction of the Krishnapatnam Port Project, was liable to pay tax on the deemed sale of inputs used in the execution of the contract of construction of the Krishnapatnam Port. It is for the tax paid in this regard, did G.O.Ms. No.609 dated 29.05.2006 enable refund to be claimed by them. During the course of arguments this Court was informed by Sri S. Ravi, Learned Senior Counsel appearing on behalf of NECL, that NECL had sought for, and was granted, refund of the tax deducted at source by KPCL from their running account bills and remitted to the Government for the tax periods 2007-08 to 2009- 2010. The very fact that KP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rule is that if this were not so, the statutory provision might as well not have been enacted. (Dipak Babaria v. State of Gujarat (2014) 3 SCC 502; Taylor v. Taylor (1875) 1 Ch D 426; Nazir Ahmed v. King Emperor AIR 1936 PC 253; Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1954 SC 322; State of U.P. v. Singhara Singh AIR 1964 SC 358 ; Chandra Kishore Jha v. Mahavir Prasad 1999 (8) SCC 266 ; Dhananjaya Reddy v. State of Karnataka 2001 (4) SCC 9; and Gujarat Urja Vikas Nigam Limited v. Essar Power Limited 2008 (4) SCC 755). As noted hereinabove G.O.Ms. No.609 dated 29.05.2006 was in force from March, 2006 till April, 2010 or completion of the project whichever was earlier. While KPCL was required to deduct tax at source from the running account bills of NECL from March, 2006 onwards, NECL was entitled to claim refund of the deducted tax only till G.O.Ms. No.609 dated 29.05.2006 was in force, and not thereafter. For the tax period 2007-08 to 2009-10 and April, 2010 KPCL is liable to remit the balance TDS, deducted from the running account bills of NECL, to the Government (i.e., the difference between the tax deducted at source and the TDS amount already remitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India AIR 1986 SC 806 . The doctrine of promissory estoppel would not apply in the teeth of an obligation or liability imposed by law, and there can be no promissory estoppel against the exercise of legislative power. (M.P. Sugar Mills v. State of U.P. (1979) 2 SCC 409 ; Kasinka Trading(1995) 1 SCC 274). As the APGST Act, which conferred power on the Government to exempt a dealer from payment of sales tax, has been repealed, and the AP VAT Act does not empower the Government to grant exemption but only enables it to grant refund, the doctrine of promissory estoppel cannot be invoked to compel the GoAP to carry out a promise contrary to the provisions of the A.P. VAT Act. Likewise KPCL/NECL cannot claim a legitimate expectation to be continued to be exempt from payment of sales tax, as the revised concession agreement itself provides for a change of law, and the steps required to be taken by the parties to the agreement in this regard. As grant of exemption is contrary to law (ie the A.P.VAT Act), KPCL cannot claim to have a legitimate expectation that GoAP would continue to grant it exemption. If a denial of legitimate expectation, in a given case, amounts to denial of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps to ensure that no one derives any benefit or advantage by abusing the legal process. Fraudulent and dishonest litigants must be discouraged. (A. Shanmugam v. Ariya Kshatriya Rajakula Vamsathu Madalaya Nand Havana Paripalanai Sangam Represented by its President (2012) 6 SCC 430). Every person invoking the jurisdiction of the Court must state the truth, be it in the pleadings, affidavits or evidence. The pleadings must set-forth sufficient factual details which inspire confidence and credibility. If false averments, evasive and false denials, are introduced and the Court discovers falsehood, concealment and distortion in the pleadings and the documents, it should, in addition to full restitution, impose appropriate costs. It is the bounden obligation of the Court to neutralize any unjust and/or undeserved benefit or advantage obtained by abusing the judicial process. (A. Shanmugam(2012) 6 SCC 430). Dishonesty should not be permitted to bear fruit and confer benefit to the person who has made a misrepresentation. (District Collector and Chairman, Vizianagaram Social Welfare Residential School Society, Vizianagaram v. M. Tripura Sundari Devi (1990) 3 SCC 655; Union of India v. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has not only suppressed relevant facts regarding their having deducted tax at source from the running account bills of NECL, they have made false statements on oath before this Court that there is no deduction of tax at source from NECL. They have, by resort to such dishonest means, secured interim stay of all further proceedings, (order in W.P.M.P. No.43132 of 2013 in W.P. No.34680 of 2013 dated 02.12.2013) and have thereby avoided remitting the tax deducted at source, from the running account bills of NECL, to the Government. The undeserved benefit and advantage obtained by KPCL, by abusing the judicial process, must be neutralized. VI. CONCLUSION: The Writ Petition fails and is, accordingly, dismissed. As they have suppressed facts, made false statements on oath, and have thereby abused the process of Court, KPCL shall pay exemplary costs of ₹ 75,000/- to the Commissioner, Commercial Taxes within three weeks from the date of receipt of a copy of this Order, failing which it shall be open to the Commissioner, Commercial Taxes to recover the said amount from them in accordance with law. The miscellaneous petitions pending, if any, shall also stand automatical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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