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Agricultural Income Tax Officer & Anr. Versus Goodricke Group Ltd. & Anr

2015 (4) TMI 194 - SUPREME COURT

Entitlement to refund of the cess paid together with interest at 12 per cent p.a. - The West Bengal Rural Employment and Production Act, 1976 and The West Bengal Primary Education Act, 1973 - whether insofar as interest is payable after the Amendment Act is concerned, such interest would only be payable after assessment orders are passed (which on facts here, we are informed, were passed on 27.07.1993 and thereafter)? - Held that:- In our opinion, Mr. C. U. Singh, learned counsel appearing on be .....

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t.

It is clear from a reading of Section 4B of the West Bengal Rural Employment and Production Act and Section 78C of the West Bengal Primary Education Act that where any sum is paid by or collected from an owner of a tea estate during a period commencing from 01.04.1981 or 14.04.1984, as the case may be, up to the date of the Amendment Act as rural employment cess or as education cess, such portion of the said sum as may become payable under the provisions of the Amendment Act shall, .....

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unamended, is now payable only under the 1989 Amendment Act which has come into force with retrospective effect.

In the present case, the 1989 amendment Act expressly seeks to remove the basis of Buxa dooars's judgment by retrospectively changing the basis of the levy of the cesses mentioned above. In the present case, what is done away with by the Amending Act of 1989 is a declaratory judgment holding the above cesses to be invalid. On all these grounds also the judgment in Madan M .....

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that there would be no enforcement of demand under the Act or Rules and in the meanwhile, assessment may be made. We have been informed that assessments were made with effect from July, 1993 onwards and consequential demands have been made with effect from 1995 onwards. It is clear, therefore, that the impugned judgment is right in holding that with regard to the payment of interest by the petitioner on the amount of cess payable by virtue of the Goodricke Group Ltd.'s case, interest would only .....

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'Buxa Dooars Tea Company Ltd. and others v. State of West Bengal and others' [(1989) 3 SCC 211] and 'Goodricke Group Ltd. and others v. State of W.B. and others' [1995 Supp. (1) SCC 707]. In the present appeal, we are concerned with The West Bengal Rural Employment and Production Act, 1976 and The West Bengal Primary Education Act, 1973. The High Court has found, based on a reading of the interim orders passed in both Buxa Dooars Tea Company Ltd.'s case and Goodricke Group Lt .....

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pany Ltd.'s case, this court held as hereunder: - "Rule NISI. There will be no order on stay application but if the petitioner succeeds in the writ petition, the State of West Bengal will refund the amount of cess collected with interest thereon @ 12% per annum from the date of collection." By the judgment delivered in Buxa Dooars Tea Company Ltd.'s case in 1989, this Court held that the charging sections under both the aforesaid Acts were invalid both on the ground of legislat .....

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legislature was swift to act after the judgment of this court. By the West Bengal Taxation Laws (Second Amendment) Act of 1989 amending the provisions of both the aforesaid Acts, the charging sections were substituted with retrospective effect, and the levy of the rural employment cess and education cess (which was levied under the earlier principal Acts on the basis of despatch of manufactured tea) was now levied on the basis of production of tea leaves. A challenge to this Amendment Act was ma .....

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y the anterior provisions which were struck down in Buxa Dooars. Once we hold that the defect pointed out in Buxa Dooars is rectified and remedied in the impugned enactment, it can certainly be given retrospective effect to cover the period covered by the earlier enactment which is not only a well-known but a frequently adopted measure by all the legislatures. For the above reasons, the writ petitions fail and are accordingly dismissed. The interim orders made in these writ petitions shall also .....

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ar as refund of Cess is concerned." Learned counsel for the appellant Shri Anip Sachthey has argued before us that the impugned judgment should be set aside on the ground that the interim order dated 16.06.1983 in the Buxa Dooars Tea Company Ltd.'s case did not survive as it was substituted by the final order in the Buxa Dooars Tea Company Ltd.'s case, which is to be found in Para 16 thereof, which stated that the two West Bengal Acts were declared void and consequential refund orde .....

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pearing on behalf of the respondent, on the other hand, supported the judgment on both counts and submitted that the levy under the original Act no longer remained the same, so that the levy under the 1989 amendment was a separate and new levy of rural employment cess and education cess, and this being the position, the interim order as well as the final judgment in Buxa Dooars Tea Company Ltd.'s case still remain intact. He further submitted that the interim order was self operative inasmuc .....

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nion, Mr. C. U. Singh, learned counsel appearing on behalf of the respondents, is right in saying that the interim order dated 16.06.1983 is self operative. In any case, the final order in Buxa Dooars Tea Company Ltd.'s case did not say anything to the contrary, and when both the judgment and the interim order are read together, it is clear that the refund will have to be made together with 12 per cent interest. But the matter does not end here. The Amendment Act contains two very important .....

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respect of any period prior to the coming into force of the said Act, such portion of the said sum as may become payable in accordance with the provisions of this Act after the coming into force of the said Act shall, notwithstanding any judgment, decree or order of any court, be deemed to have been validly levied, paid or collected under this Act, and where after assessment or fresh assessment any portion of such sum is found to have been levied, paid or collected in excess of the rural employ .....

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oyment cess, before the coming into force of the West Bengal Taxation Laws (Second Amendment) Act, 1989, in respect of any period prior to the coming into force of the said Act, assessment or fresh assessment shall, notwithstanding such order on appeal, revision or review, or the pendency of such appeal or application for revision or review, or any order passed by a court, be made in accordance with the provisions of this Act within four years from the date of coming into force of the said Act. .....

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yment cess within one month or files return within six months, as the case may be, from the date of coming into force of the said Act. (4) The amount of the rural employment cess payable by any owner of a tea estate under sub-section (2A) of section 4 of this Act in respect of any period prior to the coming into force of the West Bengal Taxation Laws (Second Amendment) Act, 1989, shall, notwithstanding anything contained in this Act, be reduced by such amount of rural employment cess payable in .....

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kilograms of green tea leaves produced in such tea estate." "78C. "Validation and exemption. (1) Where any sum has been paid by, or collected from, any owner of a tea estate during the period commencing on the 14th day of April, 1984 and ending on the day immediately preceding the date of coming into force of the West Bengal Taxation Laws (Second Amendment) Act, 1989 as education cess in respect of any period prior to the coming into force of the said Act, such portion of the said .....

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s purported to have been made, or any order is purported to have been passed on appeal, revision or review, by any authority, or any appeal or application for revision or review has been made before such authority under this Act, or any order has been passed by a court, or where any sum has been paid or collected as education cess, before the coming into force of the West Bengal Taxation Laws (Second Amendment) Act, 1989, in respect of any period prior to the coming into force of the said Act, a .....

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accordance with the provisions of this Act after the coming into force of the West Bengal Taxation Laws (Second Amendment) Act, 1989 in respect of any period prior to the coming into force of the said Act shall not be deemed to be a contravention of such provisions if such owner makes payment of such education cess within three months or applies for registration within one month or files return within six months, as the case may be, from the date of coming into force of the said Act. (4) The am .....

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hed for which such owner has purported to have enjoyed or would have enjoyed exemption from payment of the education cess during such period, and it is hereby declared that for determining the amount of the education cess to be reduced, each kilogram of tea despatched during such period shall be equivalent to four and a half kilograms of green tea leaves produced in such tea estate. (5) The provisions of this section shall have effect, notwithstanding any judgment, decree or order of any court, .....

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med to have been validly levied, paid or collected under the Amendment Act. In our view, the purport of these two sections is clear. Whatever may have been the subject matter of Buxa Dooars Tea Company Ltd.'s case, that is the subject matter of the two Acts as originally enacted, will now, notwithstanding the interim order or the final judgment in Buxa Dooars Tea Company Ltd.'s case, be deemed to have been validly levied, collected and paid as rural employment cess and education cess und .....

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Singh, however, referred us to 'Madan Mohan Pathak v. Union of India and others' [1978 (3) SCR 334] and in particular to Justice P. N. Bhagwati's judgment thereof, in which it has been decided by this Court that a Legislative Act cannot directly undo a writ of mandamus that is granted by an order of a superior court. We are of the view that Madan Mohan Pathak's case would not apply to the facts in the present case for the simple reason that what has been undone by Section 4B and .....

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d.'s case judgment. It is obvious that when the basis of Buxa Dooars Tea Company Ltd.'s case has gone, on a retrospective amendment of these two acts, the interim order and the judgment and order in Buxa Dooars Tea Company Ltd.'s case can no longer survive. For this reason, we are of the view that the impugned judgment needs to be set aside on this score. In fact, Madan Mohan Pathak has been explained in Indian Aluminium Company v. State of Kerala, [(1996) 7 SCC 637] as follows: &quo .....

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1976 Act was challenged in this Court under Article 32 of the Constitution. A Bench of seven Judges had held that Parliament was not aware of the mandamus issued by the court and it was declared that the 1976 Act was void and writ of mandamus was issued to obey the mandamus by implementing or enforcing the provisions of that Act and directed payment of bonus in terms of the settlement. It was pointed out that there was no reference to the judgment of the High Court in the Statement of Objects a .....

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fashion as observed at p. 743c to f. From the observations made by Bhagwati, J. per majority, it is clear that this Court did not intend to lay down that Parliament, under no circumstance, has power to amend the law removing the vice pointed out by the court. Equally, the observation of Chief Justice Beg is to be understood in the context that as long as the effect of mandamus issued by the court is not legally and constitutionally made ineffective, the State is bound to obey the directions. Thu .....

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gment in Madan Mohan Pathak also makes it clear that Section 3 of the impugned Act in that case sought to modify a settlement dated 24th January, 1974 arrived at between the LIC and its employees. There was no reference to a Mandamus issued by the Calcutta High Court in the Statement of Objects and Reasons as a result of which Section 3 of the impugned Act did not contain a non-obstante clause referring to any judgment of any court. The right given under the said judgment was therefore not sough .....

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defect pointed out by the judgment and amend the law with retrospective effect to validate such impost or tax - See: Madan Mohan Pathak v. Union of India, [(1978) 3 SCR 334 at 352 to 355]. In the present case, the 1989 amendment Act expressly seeks to remove the basis of Buxa dooars's judgment by retrospectively changing the basis of the levy of the cesses mentioned above. In the present case, what is done away with by the Amending Act of 1989 is a declaratory judgment holding the above cess .....

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