TMI Blog2015 (4) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... tem is a primary concern of the State and the appellant is supplying goods to the Tamil Nadu Civil Supplies Corporation and that both the entities are State funded, State controlled and State monitored organisations and are discharging duties for the welfare of the people of the country. - appellant will well fall within the definition of "State". Since Department itself having admitted the fact that the appellant is controlled, funded and monitored by the State, it cannot be said that the appellant is unjustly enriching itself to the detriment of the people and, thereby, the "unjust enrichment" attributed to the appellant has to necessarily fail and, accordingly, the finding of the Tribunal on the abovesaid aspect deserves to be set aside. - Decided in favour of assessee. - C.M.A. NO. 828 OF 2008 - - - Dated:- 20-3-2015 - R.Sudhakar And R.Karuppiah JJ For the Appellant : Mr. K.Jayachandran For the Respondents : No Appearance Judgment (DELIVERED BY R.SUDHAKAR, J.) Aggrieved by the order of the Tribunal in dismissing the appeal filed by it, the appellant/assessee is before this Court by filing the present appeal. This Court, vide order dated 6.3.08, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, on an analysis of the entire case and considering the arguments advanced on behalf of either side held that though the Supreme Court in Mafatlal Industries case (supra) has held that the doctrine of unjust enrichment will not apply to the State, as the State represents the people of the country. The Tribunal further held that the Supreme Court, in the said decision, had in mind, an institution, which represented the people of the country and, therefore, the dictum enunciated in the said decision cannot be made applicable to a company (appellant herein) instituted by another company, viz., Tamil Nadu Civil Supplies Corporation Ltd. The Tribunal further held that the appellant, though supplying materials to the Civil Supplies Corporation, a body of the State, the role of the appellant is limited, though albeit of some significance to the common people, nevertheless, it cannot be held that the appellant represents the people in the sense understood by the Supreme Court in Mafatlal Industries case (supra) and, accordingly held that it is not in a position to equate the appellant-company to that of State as envisaged in the Mafatlal Industries case (supra). Accordingly, the appeal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the Supreme Court in the case of Pradeep Kumar Biswas - Vs - Indian Institute of Chemical Biology (2002 (5) SCC 111). The Supreme Court, in Zee Telefilms Ltd. - Vs - Union of India (2005 (4) SCC 649), while considering similar matter as to when an agency can be termed a State , quoted with approval the principles laid down by the Constitution Bench in Pradeep Kumar Biswas case (supra) and held as follows :- 21. Thereafter the larger Bench of this Court in Pradeep Kumar Biswas (supra) after discussing the various case laws laid down the following parameters for gauging whether a particular body could be termed as State for the purpose of Article 12: The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be perva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies Corporation and that both the entities are State funded, State controlled and State monitored organisations and are discharging duties for the welfare of the people of the country. 11. If the finding as recorded by the Tribunal is accepted that the appellant cannot be held to be a State as defined under Article 12 of the Constitution, then the said finding is in direct conflict with the stand of the Department that the appellant is a State funded, State controlled and State monitored organisation. Further, as accepted by the Department, the appellant organisation is a State funded, State controlled and State monitored organisation, more particularly instituted by the Tamil Nadu Small Industries Corporation Ltd., an undertaking of the State Government, the principles as enunciated by the Supreme Court in Pradeep Kumar Biswas case (supra) as followed in Zee Telefilms case (supra) is squarely attracted to the facts of the present case and the appellant will well fall within the definition of State . 12. In the light of the reasons stated above, this Court has no hesitation to hold that the appellant falls squarely within the definition of State as propounded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Commissioner of Central Excise, Chennai - I - Vs - Superintending Engineer, TNEB (2014 (300) ELT 45 (Mad.)) and also by the Karnataka High Court in Commissioner of Central Excise, Bangalore - Vs - Karnataka State Agro Corn Products Ltd., wherein the Karnataka High Court has held as under :- 7. The argument is that the State is different from State undertakings. It cannot be forgotten that the State Government controls the Government undertakings in the matter of management, finance, administration, etc. of those governmental undertakings. Policies or programmes are also, to a certain extent, evolved by the State Government. State Government has an effective control over these undertakings and there is pervasive control by the State over them. Unless the department is able to show that the Government undertakings are totally different from all angles, it is not possible to accept the argument of 'unjust enrichment' on the part of the State undertakings. 15. In the case on hand, on a careful perusal of the records as also the orders of the authorities below, without contradiction, and as has been held above, it could be stated that the Department itself has accept ..... X X X X Extracts X X X X X X X X Extracts X X X X
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