TMI Blog2017 (3) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in Section 6A of the CST Act creates an irrebutable presumption of “sale” in absence of declaration in Form F and therefore, unconstitutional has no substance. Petition dismissed - decided against petitioner. - SPECIAL CIVIL APPLICATION NO. 16806 of 2016 - - - Dated:- 29-12-2016 - M.R. SHAH AND B.N. KARIA, JJ. Mr. Mihir Thakore, Ld. Sr. Adv with Ms Amrita M Thakore, Advocate for the Petitioner Mr. Kamal Trivedi, Ld. Advocate General with Ms. Sangeeta Vishen AGP for the Respondent JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition under Article 226 of the Constitution of India, the petitioners have prayed for an appropriate writ, direction and order to declare Section 6A(1) of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act ) as ultra vires the Constitution of India. The petitioners have also prayed for an appropriate writ, direction and order quashing and setting aside the reassessment order dated 04.04.2007 passed by the respondent no.4, the order dated 3.8.2009 passed by the respondent no.3Joint Commissioner of Commercial Tax, Division3, Rajkot and also judgment and order dated 15.06.2011 passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the reassessment, the petitioner's representative produced all the evidence in respect of the aforesaid transfer of goods. That during the course of inquiry and reassessment proceedings, it was found that declaration in Form F with respect to the transactions between the petitioners and the aforesaid alleged agents had purportedly not been issued by the prescribed authority and form F produced by the petitioners with respect to to the aforesaid transactions are fake, the respondent no.4Deputy Commissioner of Commercial Tax, Junagadh passed the order to levy tax at the rate of 10% on the aforesaid sales being ₹ 70,57,502/+ interest of ₹ 38,11,051/and penalty of ₹ 63,51,752/amounting to total ₹ 1,72,20,305/. 2.5. Feeling aggrieved and dissatisfied with the reassessment order dated 04.04.2007, the petitioners filed appeal before the respondent no.3 Joint Commissioner of Commercial Tax, Division 3, Rajkot, which came to be dismissed on 10.06.2007 on the ground of non deposit of predeposit amount of ₹ 35 lakhs. That against the order dated 10.06.2007, the petitioners filed further appeal before the Gujarat Value Added Tax Tribunal, which came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng into the issue of validity of Section 6A of the Act in view of the fact that review application as well as appeal before the Appellate Authority were pending. That the Review Application was thereafter allowed by this Court on 4.2.2010 by recalling the order dated 30.07.2009 and permitting the petitioners to withdraw the Tax Appeal No. 1205 of 2009 since the petitioners had filed appeal before the Appellate Authority. That thereafter, the petitioner's appeal before the the Appellate Authority was rejected vide order dated 06.08.2010 considering the provisions of Section 6A of the Act. Against the order passed by the Appellate Authority dated 06.08.2010, the petitioners preferred Special Leave Petition No. 35734 of 2010 before Hon'ble Supreme Court, which the petitioners withdrew in order to prefer petition under Article 226 of the Constitution of India. That thereafter, the petitioners preferred Special Civil Application No. 3262 of 2011 before this Court, in which, also petitioner challenged the Constitutional validity of Section 6A of the Act. From the order passed by the Division Bench dated 24.03.2011 passed in Special Civil Application No.3262 of 2011, it appears th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interstate trade or commerce. It is submitted that Article 269(3) confers power on the Parliament to enact a law formulating principles for determining when sale takes place in the course of interstate trade or commerce. It is submitted that however under the said constitutional provisions, the Parliament can by law only tax a particular transaction provided it is a sale in the first place and cannot tax transactions which are not sales by merely enacting that they shall be deemed to be sale. In support of his above submissions, Shri Thakore, learned counsel for the petitioners has heavily relied upon the decision of the Hon'ble Supreme Court in the case of The State of Madras vs. M/s. Gannon Dunkerley and Co (Madras) Ltd reported in AIR 1958 SC 560 (para 26 47). It is submitted that in the said decision, the Hon'ble Supreme Court has inter alia held that ... the words 'sale of goods' in Entry 48 must be interpreted in the sense which they bear in the Indian Sale of Goods Act, 1930 and that .... in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to good which ofcourse p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended therefore, creates an irrebutable presumption by deeming every movement of goods to be a sale even if it is in fact not a sale, merely on account of absence of declaration in Form F. It is submitted that in other words, the amendment results in treating every movement of goods to be a sale even if the evidence available with a dealer can establish that a particular movement / transaction is in fact not a sale . It is submitted that therefore, the said amendment is unconstitutional since it seeks to expand the meaning of the word sale beyond the constitutional parameters thereof and seeks to tax transactions which are not sale by merely enacting that they shall be deemed to be sale . 5.5. It is further submitted by Shri Thakore, learned counsel for the petitioners that said amendment therefore, violates Articles 14, 19(1)(g), 265 and 300A of the Constitution. In support of his above submissions, Shri Thakore, learned counsel for the petitioners has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Bengal Immunity Co Ltd vs. State of Bihar Ors reported in AIR 1955 SC 661(para 60) as well as para 34 of the decision in the case of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales Tax Act for another assessment period i.e. 200304 therefore, it does not create any bar of res judicata or constructive res judicata to the present petition which is in respect of the assessment period 2002-03 and therefore, arising out of a separate cause of action. In support of his above submission, more particularly, his submission that every assessment year is different and distinct assessment year and the bar of resjudicata or constructive resjudicata shall not be applicable in the tax statute, Shri Thakore, learned counsel for the petitioners has relied upon the decisions of the Hon'ble Supreme Court in the case of Amalgamated Coalfields Ltd and another vs. Janapada Sabha Chhindwara and ors reported in AIR 1964 SC 1013 (para 18 24); in the case of Union of India and Another vs. Ranchi Municipal Corporation, and Ors reported in (1996) 7 SCC 542 (para 5) and in the case of Bharat Sanchar Nigam Limited (supra) (para 23). 6.2. It is submitted that in the case of Jeypore Sugar Company Ltd vs. Sales Tax Officer and Ors reported in (1998) 9 SCC 358, in fact, the Hon'ble Supreme Court has, even in respect of the same assessment period, held that it would not be jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making above submissions and relying upon the above decisions, it is requested to declare Section 6A(1) of the Central Sales Tax Act, 1956 as unconstitutional and / or ultra vires of the Constitution of India. 7.0. Present petition is vehemently opposed by Shri Kamal Trivedi, learned Advocate General appearing on behalf of the State and Shri Devang Vyas, learned Assistant Solicitor General of India appearing on behalf of the Union of India. 8.0. Present petition challenging vires of Section 6A(1) of the Central Sales Tax Act is vehemently opposed by learned counsel for the respondents by submitting that earlier the very petitioner in the earlier round of litigation did challenge the vires and Constitutional validity of the very provision i.e. Section 6A(1) of the CST Act and elaborate submissions were made by the learned counsel appearing on behalf of the petitioner with respect to the Constitutional validity of the Section. However, as Division Bench was not convinced and therefore, the petitioner did not challenge and / or did not press the challenge to the Constitutional validity of the Section 6A(1) of the CST Act. It is submitted that therefore, the petitioner may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions merely provide for rule of evidence carrying a probative or persuasive value in the matter of proving the existence of the fact of transfer (not the sale) of goods from one State to another State. 8.4. It is further submitted by Shri Kamal Trivedi, learned Advocate General that a factum of production of F Form as provided under Section 6A(1) of the Act is relevant in proof of fact of having transferred and not sold the goods from one State to another State. It is submitted that since the said fact having produced F Form bears a probative or persuasive value in the matter of proving the existence of the fact of transfer of goods from one State to another, the same is, as aforesaid, a rule of evidence, prescribing for an irrebuttable (conclusive) presumption. 8.5. It is submitted that statutory provision which creates a rebuttable presumption or irrebuttable presumption as regards the proof of a set of circumstances, which would make a transaction liable to tax with the object of preventing evasion of tax, cannot be considered as conferring on the authority concerned, the power to levy a tax which the legislature cannot otherwise levy. 8.6. Shri Trivedi, learned Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions outside the State were not by way of sale. However on inquiry it has been found that F Forms are fake. It is submitted that the petitioner is not disputing that the F Forms which were submitted, were fake. It is submitted that therefore, once the F Form submitted by the petitioner in support of their case that the transactions outside the State were not sale and are found to be fake and thus the petitioner failed to prove that the transactions were not a sale, in that case, there cannot be any other eventuality and such transactions are to be treated and / or held to be interstate sale on which the petitioner is liable to pay the CST. It is submitted that therefore, this is not a case in which on non production of the F Form the petitioner is held liable to pay CST treating, the transaction as interstate sale. It is vehemently submitted by Shri Trivedi, learned Advocate General that for the earlier years with respect to very F Forms, the petitioner had lost upto Hon'ble Supreme Court and the petitioner is held liable to pay CST on such transactions, of which, F Forms were submitted but were found to be fake. Making above submissions, it is requested to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of Section 6A(1) of the Act and learned counsel for the petitioner as such made elaborate submissions on merits on the Constitutional validity of Section 6A(1) of the Act, however the Division Bench was not satisfied with the submissions made on behalf of the learned counsel for the petitioner with respect to Constitutional validity of aforesaid provisions, and thereafter only learned counsel for the petitioner did not press the petition challenging the validity of Section 6 A(1) of the Act. It is submitted that therefore, the present petition challenging the Constitutional validity of Section 6A(1) of the Act again may not be entertained. It is submitted that therefore, in the aforesaid facts and circumstances of the case, the decisions cited at the bar on behalf of the learned counsel for the petitioner referred to herein above shall not be applicable to the facts of the case on hand. 11.3. Heard the learned advocates for the respective parties on the aforesaid objection with respect to entertainability of the present petition with respect to challenge to validity of Section 6A(1) of the Act again. 11.4. At the outset, it is required to be noted that in earlier rou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale. In the alternative, validity of Section 6A of the Act is also challenged. After arguments on the question of validity of Section 6A of the Act and as the Court was, prima facie, not inclined to accept such submission, learned counsel appearing on behalf of the petitioner submitted that the petitioner will not desire to challenge the validity of Section 6A of the Act. On the other reliefs, the case may be heard. In that view of the matter, while we hold that the prayer to challenge the validity of Section 6A of the Act is not pressed and that the writ petition to that extent is closed, allow the petitioner to pursue other prayer before the appropriate Court. Post the writ petition before the Bench hearing Sales Tax (Admission) matters on 1st April 2011. 11.5. Thereafter, again now in the present petition, the petitioners have challenged the Constitutional validity of Section 6A of the Act which was not earlier pressed by the very petitioners. Therefore, one of the question which is posed for the consideration of this Court whether in such situation narrated herein above i.e. once the petitioners after making elaborate submissions before the Division Bench in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order admitting the writ petition after it is heard for some time, that a request is made by the petitioner or his counsel to permit him to withdraw it without seeking permission to institute a fresh writ petition. A Court which is unwilling to admit the petition would not ordinarily grant liberty to file a fresh petition while it may just agree to permit withdrawal of the petition. When once a writ petition filed in a High Court is withdrawn by the party concerned he is precluded from filing an appeal against the order passed in the writ petition because he cannot be considered as a party aggrieved by the order passed by the High Court. If so, he cannot file a fresh petition for the same cause once again. The following observations of E.S. Venkataramiah, J. (as the learned Chief Justice then was) are to be quoted here (at p. 92 of AIR): We are of the view that the principle underlying Rule 1 of Order 23 of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner again to challenge to the Constitutional validity of relevant provisions of the Act in a subsequent petition, the Division Bench in para 22 has observed as under: 22. There is still one more ground on which the challenge to the constitutional validity of the relevant provisions of the Act at the instance of the petitioner is barred in this writ petition. The petitioner seeks the writ of mandamus which is not a writ of course or a writ of right but is as a rule of matter for the discretion of the Court. Upon a prerogative writ of that nature there may arise many matters of discretion which may induce the Court to withhold the grant of it matters connected with delay or possibly with the conduct of the parties (See Bombay Municipality vs. Advance Builders AIR 1972 SC 793 page 800). Now, as stated earlier the petitioner had earlier filed Special Civil Application No. 425 of 1966 in this Court. It is not in dispute that the validity of the Act as a whole was inter alia challenged in the said writ application. On the issue of the rule the respondents appeared and filed affidavits and contested the petition on merits. The petition was ultimately withdrawn and the Court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the decisions of the Supreme Court. He cannot be permitted to resume it now after a number of years and be heard to say that despite his earlier proclamation he still wishes to persist in raising the same point in this litigation. Courts moved upon a prerogative writ are not the forum to flog a dead horse or to resuscitate a ghost already laid to rest. The doctrine of abandonment has been expressly invoked and recognised in Trilokchand Motichand vs. HB Munshi AIR 1970 SC 898 in a proceeding under Article 32 and relief was refused to the petitioner in that case (although the point that he was agitating was covered in his favour by a Supreme Court decision given in a different case). On the ground that after an adverse decision of the High Court in his writ petition under Article 226 he had not moved the Supreme Court by way of appeal but had chosen to move the Supreme Court directly after a number of years only when another person more adventurous than him in his turn got a favourable decision meanwhile on a point not urged by the petitioner in his writ petition before the High Court (see the decision of Hidaytullah C.J. St pages 902 and 903). The principle on which the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That, however, is a matter on which it is unnecessary for us to pronounce a definite opinion in the present case. In this connection, it would be relevant to add that even if a direct decision of this Court on a point of law does not operate as res judicata in a dispute for a subsequent year, such a decision would, under Art. 141, have a binding effect not only on the parties to it, but also on all counts in India as a precedent in which the law is declared by this Court. The question about the applicability of res judicata to such a decision would thus be a matter of merely academic significance. 24. In the present appeals, the question which arises directly for our decision is : does the principle of constructive res judicata apply to petitions under Art. 32 or Art.226 where the dispute raised is in respect of a year different from the year involved in a prior dispute decided by this Court ? We have already noticed the points actually decided by this Court against the appellants on the earlier occasion (vide Amalgamated Coalfields Ltd., 19621 SCR 1: (AIR 1961 SC 694). One of the points sought to be raised was in regard to the validity of the increase in the rate of tax from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o is called upon to pay a tax for a particular year and the matter is taken to the High Court or brought before this Court and it is held that the taxing statute is valid, it may not be easy to hold that the decision on this basic and material issue would not operate as res judicata against the assessee for a subsequent year. 11.10. Now, so far as reliance placed upon the decision in the case of Ranchi Municipal Corporation, and Ors (supra) relied upon by the learned counsel for the petitioner is concerned, it is required to be noted that in the case before the Hon'ble Supreme Court earlier petition was dismissed challenging the validity of the demand summarily and to that it is held that summary dismissal does not constitute res judicata for deciding the controversy. That is not the situation here. In the present case, in earlier petition, learned counsel for the petitioner did made elaborate submissions on Constitutional Validity of Section 6 A of the Act, however as observed by the Division Bench, the Court was not inclined to accept the submission and only thereafter instead of inviting the order on merits on the Constitutional validity of Section 6A, the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved herein above and it is not in dispute that earlier the petitioner specifically challenged the Constitutional validity of Section 6A (1) in Special Civil Application No.3262 of 2011 in which, learned counsel for the petitioner made elaborate submissions on validity of Section 6A, however Division Bench was not inclined to accept the submissions made by the learned counsel for the petitioner challenging the Constitutional validity of Section 6A of the Act and only thereafter the learned counsel for the petitioner took a conscious decision and did not press the challenge to the Constitutional validity of Section 6A of the Act. It appears that the learned counsel for the petitioner at that stage did not thought it fit to invite the order on merits with respect to the Constitutional validity of Section 6A of the Act. If learned counsel for the petitioner would not have withdrawn the petition and / or withdrawn the challenge to the Constitutional validity of Section 6A of the Act, in that case, the Division Bench would have definitely decided the matter on Constitutional validity of Section 6A of the Act and would have given its verdict on the same. However, having realized that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring any year on and from the date so notified. Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which, in accordance with the provisions of subsection 3 of section 5 is a sale in the course of export of those goods out of the territory of India.] (1A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of interstate trade or commerce not withstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State.] [2] Not withstanding anything contained in subsection( 1) or subsection (1A), where a sale of any goods in the course of interState trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transfer of documents of title to such goodsto a registered dealer, if the goods are of the description referred to in subsection (3) of Section 8, shall be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed authority a certificate in the prescribed manner on the prescribed from duly filled and signed by the official personnel, consular or diplomatic agent, as the case may be 6A. (1) Where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, as the case may be, and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence of despatch of such goods 2 [and if the dealer fails to furnish such declaration, then, the movement of such goods shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Sales Tax Act in respect of any goods, on the ground that the movement of such goods from one State to another State has occasioned by reason of transfer of such goods by him to any other place of his business, as the case may be, and not by reason of sale, the burden of proving that the movement of those goods has so occasioned shall be on that dealer and for this purpose, he may furnish to the Assessing Authority, prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence of dispatch of such goods i.e. Form F . Thus, Section 6A(1) cast burden upon the dealer. If the dealer submits the prescribed Form (F Form) containing prescribed particulars obtained from the prescribed authority, along with evidence of dispatch of such goods etc, in that case, it can be said that initial burden / onus is discharged by the dealer and thereafter it is for the concerned appropriate authority to hold inquiry and prove otherwise. Only in case the dealer fails to furnish such declaration, then, there is a presumption that the movement of such goods shall be deemed sale for all purposes of Central Excise Acct to have been occasioned as a result o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
