9911796707
TMI Blog2017 (3) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment and order dated 21.04.2016 passed by the Central Sales Tax, Appellate Authority, New Delhi. 2.0. The facts leading to the present petition in nutshell are as under: 2.1. That the petitioners are manufactures and dealers of edible oil. They in course of their business send such goods to different States outside of State of Gujarat. It is the case of the petitioners that during the relevant assessment year i.e. 2002-03, the petitioners had inter alia sent goods to three of its commission agent being (1) M/s. Zarana Corporation, Bombay, (2) M/s. Raj & Sons, Kalyan and, (3) M/s. Sarthak Enterprise, Delhi, all registered under the relevant provisions of the Act. It is the case on behalf of the petitioners that goods sent by the petitioners to the aforesaid agents were purely on transfer of goods from principal to agent basis and there was no sale of the said goods from the petitioners to the agents. According to the petitioners, the goods thus received by the agents were sold by them to third parties, as local sales in their respective States and they have also paid the local sales tax as applicable in the respective States. According to the petitioners, the sale proceeds we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst Appellate Authority for consideration and fresh decision. That thereafter, respondent no.3 herein Joint Commissioner of Commercial Tax, Division 3, Rajkot has passed denovo order rejecting the said appeal and also relying upon the assessment for the year 200304, it was found that similar declaration sent by the agents has been found not to have been issued by the concerned authorities at their respective States. That on further appeal, the learned Tribunal partly allowed the said appeal qua imposition of penalty only, however rejected the appeal against the reassessment order. That the learned Tribunal passed the order on 15.06.2011. 2.6. Feeling aggrieved and dissatisfied with the order dated 15.6.2011 passed by the learned Tribunal, the petitioners preferred further appeal being Appeal No. CST/27/2011/402, under Section 20 of the Central Sales Tax Act before the Central Excise Tax Appellate Tribunal. The said appeal has been rejected by the learned Appellate Court vide judgment and order dated 21.04.2016 on the ground that non genuineness of the declarations in Form F implied non filing of such declarations and would therefore, result in deeming fiction under Section 6A(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutional validity of Section 6 A of the Act, however the Division Bench was not prima facie satisfied and was not inclined to accept the submissions on Constitutional validity of Section 6A of the Act, the learned counsel for the petitioners did not press the validity of Section 6 A of the Act. The Division Bench in the order dated 24.3.2011 specifically observed that in that view of the matter, prayer to challenge the validity of Section 6A of the Act is not pressed and that the writ petition to that extent is closed and allowed the petitioners to pursue other prayer before the appropriate Court. The Division Bench has directed to post writ petition before the Bench hearing Sales Tax (Admission) matters. That thereafter, by detailed judgment and order dated 15.04.2011 the Division Bench dismissed the said Special Civil Application No. 3262 of 2011 which was for the year 200304 with respect to similar transactions and same / similar F forms produced and received from the different agents which were found to be fake. The Division Bench confirmed the reassessment order as well as subsequent orders passed by the Appellate Authority by observing that a F Form declaration is found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale ........". It is submitted that therefore, by enacting provision to treat a particular transaction as deemed to be sale on non furnishing F Form, it is proposed to levy the CST treating it as interstate sale. 5.2. It is further submitted by Shri Thakore, learned counsel for the petitioner that subsequent to the aforesaid decision in the case of M/s. Gannon Dunkerley and Co (Madras) Ltd (supra), there is an amendment to the Constitution (the 46th amendment) whereby Article 366(29A) has been inserted by which it has expanded the meaning of sale to the extent stated therein and certain transactions as stated therein are deemed to be sale. 5.3. It is submitted that the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Ltd and Another vs. Union of India and others reported in (2006) 3 SCC 1 has held that the principle enunciated in the the case of Gannon Dunkerly (supra) has been modified by Article 366(29A) only to the limited extent stated in the said Article and that all other transactions would have to qualify as sale within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioners that the declaration in Form F is not inherently relevant for proving the fact that transactions involving interstate movement of goods are not sale and has no probative value in that behalf. It is submitted that it is only a requirement artificially created by the Statute. It is submitted that the said amendment in Section 6A(1) of the Central Sales Tax Act, 1956 however creates an irrebutable presumption of "sale" in absence of declaration in Form F and it is therefore, not a rule or evidence or procedural law or machinery provision, but is in fact part of substantive law. It is submitted that it being substantive law, is unconstitutional since, by not permitting the dealer to rebut the presumption by other evidence, it deems a transaction which may not be an actual sale to be a "sale". In support of his above submission, Shri Thakore, learned counsel for the petitioners has relied upon para 29 of the decision of the Hon'ble Supreme Court in the case of Izhar Ahmad Khan & Ors vs. Union of India & Ors reported in AIR 1962 SC 1052 as well as para 14, 16 and 17 of the decision of the Hon'ble Supreme Court in the case of Sodhi Transport Co. and Ors vs, St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. 6.3. It is further submitted by Shri Thakore, learned counsel for the petitioners that since the petitioners had withdrawn the challenge to the constitutional validity of Section 6A(1) for the assessment period 200304, there is no precedent on this issue and hence, the petitioner's contentions are permissible to be raised before this Court. 6.4. It is further submitted by Shri Thakore, learned counsel for the petitioners that even otherwise there is no bar to the petition on the ground of "propriety" or "forum shopping". 6.5. It is submitted that in light of law laid down by Hon'ble Supreme Court that each assessment period constitutes a separate cause of action for the assessee and when the Hon'ble Supreme Court has not laid down any bar other than precedent for entertaining a petition in respect of a different assessment period and has specifically held that the bar of res judicata or constructive res judicata would not apply to matters in respect of different assessment periods, rejecting a petition on the ground of "propriety" or "forum shopping" would be contrary to the judgment of the Hon'ble Supreme Court. 6.6. It is further submitted that withdrawal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent assessment year, the petitioner can challenge the Constitutional validity, by submitting that in the taxation matter each year is separate and distinct year and would give a separate cause of action every year. It is vehemently submitted by the learned counsel for the respondent that if the course adopted by the petitioner is permitted, in that case, it would lead to enter into forum shopping, as having failed to get the relief from one Bench, the same is not pressed and thereafter the same will be challenged, subsequently which may be before the another Bench / Court. It is vehemently submitted that it may not be strictly a case of resjudicata still looking to the conduct of the petitioner, the Court may not exercise the discretion in favour of such petitioner and may not issue prerogative writ. In support of the above submissions, learned counsel for the respondents have heavily relied upon the decision of the Division Bench of this Court in the case of Murtujakhan Joravarkhan Babi vs. Municipal Corporation Ahmedabad reported in AIR 1975(Guj) 182 (para 22). 8.1. On merits, Shri Trivedi, learned Advocate General appearing on behalf of the State has vehemently submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 6A of the Act. It is submitted that after "F" Form is submitted in that case the Assessing Officer is required to hold inquiry with respect to genuineness of the contains mentioned in "F" Form and at this stage there would be an opportunity to the dealer and within the meaning of this provision to convince the Assessing Officer that he has discharged the burden to prove that transfer of goods was not by way of sale. It is submitted that however if the dealer does not come with a case that the transfer of goods is not by way of sale by submitting "F" Form in that case there shall be presumption that goods transferred outside the State are by way of sale and interstate sale is CST leviable. It is submitted that therefore, it is machinery section and by no stretch of imagination it can be said that by such a provision the transaction which is not a sale is sought to be considered as a sale, Section 6A(1) does not confer power to levy tax which Legislature otherwise cannot levy. 8.7. Shri Trivedi, learned Advocate General has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sodhi Transport Co. and Others vs. State of U.P and Others reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trivedi, learned Advocate General and has requested to dismiss the present petition. 10.0. Heard the learned counsel for the respective parties at length. 11. The first question which is posed for the consideration of this Court is whether in the facts and circumstances of the case when the petitioner earlier challenged the Constitutional validity of Section 6A(1) of the Central Sales Tax Act, 1956 in earlier round of litigation for AY 200304, by way of Special Civil Application No. 3262 of 2011 and after learned counsel for the petitioner made the elaborate submissions on constitutional validity of the said provision,withdrew the same, is it open for the petitioner assessee therefore, to challenge the same again in the subsequent assessment year and / or whether in such circumstances the High Court would like to exercise the discretionary powers under Article 226 of the Constitution of India ? 11.1. It is the case on behalf of the petitioner relying upon the decisions of the Hon'ble Supreme Court in the case of Amalgamated Coalfields Ltd and another (supra); Ranchi Municipal Corporation Ranchi and Ors (supra); Bharat Sanchar Nigam Ltd (supra) and Jeypore Sugar Company Ltd ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution of India being Special Civil Application No.3262 of 2011. From the order dated 24.03.2011 in aforesaid Special Civil Application No. 3262 of 2011, it appears that elaborate submissions were made by the learned counsel for the petitioner on the question of validity of Section 6A(1) of the Act, however as observed by the Division Bench in the order dated 24.03.2011, the Division Bench was not inclined to accept such submission on the question of validity of Section 6 A of the Act and therefore, the learned counsel for the petitioner did not press the writ petition with respect to the prayer to challenge the validity of Section 6A of the Act. Consequently, the Division Bench specifically observed and held that in that view of the matter, as the prayer to challenge the validity of Section 6A of the Act is not pressed, writ petition to that extent is closed. The order passed by the Division Bench dated 24.3.2011 passed in Special Civil Application No.3262 of 2011 is as under: "The Central Sales Tax Appellate Authority, New Delhi (for short, 'the Appellate Authority'), by order dated 6th August 2010, decided the appeal preferred by the petitioner under Section 20 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and thereafter when the petitioners did not press the challenge to the Constitutional validity of Section 6A of the Act, whether the petitioners may be permitted to again raise the question of validity of Section 6A of the Act in the subsequent proceedings. 11.6. In the case of Upadhyay and Co vs. State of U.P and Others, in para 11 to 15, the Hon'ble Supreme Court has observed and held as under: 11. We made a recapitulation of the events as above for the purpose of showing that the petitioner has absolutely no case in the present S.L.Ps. He cannot, at any rate, now challenge the order of the High Court dated 351996 over again having withdrawn the S.L.P. which he filed in challenge of the same order. It is not a permissible practice to challenge the same order over again after withdrawing the Special Leave Petition without obtaining permission of the Court for withdrawing it with liberty to move for special leave again subsequently. 12. The above principle has been incorporated as a rule in the realm of suits. Order 23, Rule 1 of the Code of Civil Procedure deals with withdrawal of suit or abandonment of part of the claim. Subrule (3) says that the Court may in cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. While the withdrawal of a writ petition filed in High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Art. 32 of the Constitution since such withdrawal does not amount to res judicata, the remedy under Art. 226 of the Constitution should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission." 14. Of course their Lordships added that the above rule is not applicable to writ petitions involving personal liberty "since such a case stands on a different footing altogether." 15. We have no doubt that the above rule of public policy, for the very same reasoning, should apply to special leave petitions filed under Art. 136 of the Constitution also. Even otherwise, the order passed by the Division Bench of the High Court on 351998 does not warrant interference on merits as the learned Judges of the High Court have taken into account all the relevant facts and came to the correct conclusion. 11.7. In the case of Avinash Nagra vs. Navodaya Vidhyalaya Samiti and Ors reported in (1997) 2 SCC 534, the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the validity of the provisions of the Bombay Town Planning Act, 1954 and since that point is already covered by the decisions of the Supreme Court nothing survives in the petition. He, therefore, withdraws the petition and the petition accordingly stands withdrawn. There will be no order as to costs of the petition. The consequence of the withdrawal of the said writ petition in the eye of law was that it stood dismissed on merits albeit on a concession made by or on behalf of the petitioner to the effect that the question of the constitutional validity of the Act was no longer open in view of the decisions of the Supreme Court. In other words the effect of the dismissal by withdrawal was that the challenge of the petitioner to the actions of the respondents under the Act on the ground that the said Act itself was ultra vires stood concluded by an adverse decision of this Court based on his own concession. It is not the case of the petitioner as set out in the petition that the concession was wrongly made by his counsel. Indeed such a contention could not have been raised in the view that we have taken as regards the wide ambit of the pronouncement of the Supreme Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titutional validity of the Act must fail. 11.9. Now, so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Amalgamated Coalfields Ltd and another (supra) is concerned, it is required to be noted that as such on facts the said decision shall not be applicable to the facts of the case on hand. In the said decision, the Hon'ble Supreme Court as such has specifically observed and held, that the general principle of res judicata applies to writ petitions filed under Article 32 or Article 226. However, thereafter having so observed and held the Hon'ble Supreme Court found that attack against the validity of the notices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion and it was specifically found that same ground which was urged on earlier occasion was not placed before the Court in another form and having found that the ground subsequently urged were entirely distinct, the Hon'ble Supreme Court observed and held that High Court ought not to have dismissed subsequent petition on the ground of resjudicata / constructive res judicata. The observations made by the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court refusing permission to the appellants to raise this point on the earlier occasion does not mean that this Court has decided the point on the merits against the appellants; it may mean that the appellants were given liberty to raise this point later; but even otherwise, the point has not been considered and should not be held to be barred by constructive res judicata . It is significant that the attack against the validity of the notices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion. It is not as if the same ground which was urged on the earlier occasion is placed before the Court in another form. The grounds now urged are entirely distinct and so, the decision of the High Court can be upheld only if the principle of constructive res judicata can be said to apply to writ petitions filed under Art. 32 or Art. 226. In our opinion, constructive res judicata which is a special and artificial form of res judicata enacted by S. 11 of the Civil Procedure Code should not generally be applied to writ petitions filed under Art. 32 or Art. 226. We would be reluctant to apply this principle to the present app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not be applicable to the facts of the case on hand. Even in the said decision, it is observed by the Hon'ble Supreme Court that the Courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. It is further observed that reason why Courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. It is further observed that where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view. 11.12. Even the decision of the Hon'ble Supreme Court in the case of Jeypore Sugar Company Ltd (supra) relied upon by the learned counsel for the petitioner shall not be applicable to the facts of the case on hand. In the case before the Hon'ble Supreme Court, it was the case on behalf of the revenue that as the point raised in the subsequent proceeding was available earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner took a conscious decision and did not press the Constitutional validity of Section 6A of the Act, which is now challenged. It is not the case on behalf of the petitioner that learned counsel for the petitioner withdrew the challenge to the Constitutional validity of Section 6A of the Act in earlier proceedings wrongly and and / or without their consent. The matter is also required to be considered from another angle also. In a given case it may happen that the litigant approach the Court with a particular challenge and having realized that the Court is against him, he may withdrew the petition / challenge and thereafter may approach the Court with respect to very challenge before another Bench. The aforesaid would give rise to eventuality of "forum shopping". On the aforesaid ground also, the present petition is not required to be entertained. In view of the aforesaid facts and circumstances of the case, we are of the opinion that present petition at the instance of the petitioner challenging the Constitutional validity of Section 6A of the Act is not required to be entertained. 12.0. Even otherwise on merits also, for the reasons stated herein below, it cannot be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther time as that authority may, for sufficient cause, permit, (a) a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in a prescribed form obtained from the prescribed authority; and (b) If the subsequent sale is made to a registered dealer, a declaration referred to in of subsection( 4) of section 8; Provided further that it shall not be necessary to furnish the declaration or the certificate referred to in clause (b) of the proceeding proviso in respect of a subsequent sale of goods if, (a) the sale or purchase of such goods is, under the Sales Tax law of the appropriate State, exempt from tax generally or is subject to tax generally at a rate which is lower than 1[three] percent or such reduced rate as may be notified by the Central Government, by notification in the Official Gazette, under subsection (1) of Section 8 (Whether called a tax or fee or by any other name); and (b) the dealer effecting such subsequent sale proves to the satisfaction of the authority referred to in the preceding proviso that such sale is of the nature referred to in clause (a) or clause (b) of this subsect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no interState sale has been effected, he may, at the time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall, subject to the provisions of subsection (3)] be deemed for the purpose of this Act to have been occasioned otherwise than as a result of sale. (3) Nothing contained in subsection (2) shall preclude reassessment by the assessing authority on the ground of discovery of new facts or revision by a higher authority on the ground that the findings of the assessing authority are contrary to law, and such reassessment or revision may be done in accordance with the provisions of general sales tax law of the State." 12.2. From the aforesaid, it can be said that Section 6 of the Act is a charging Section and Section 6 A of the Act can be said to be a procedural Section. Section 6 A of the Act provides for complete machinery, by which, the assessee/ dealer shall have an ample opportunity to prove whether the transfer of goods is not by way of sale. It is required to be noted that if the transfer of goods takes place out of State / from on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, the submission on behalf of the petitioner that by Section 6 and the deeming provision, it is intended to levy the tax on sale, which otherwise is not sale, has no substance and cannot be accepted. 13. In view of the above, more particularly, when it is observed and held that Section 6 is a charging Section and Section 6 A is a procedural Section and therefore, by Section 6A(1) of the CST Act, it cannot be said that by the said provision, the transaction which otherwise is not a sale is treated as sale (deemed sale), it cannot be said that Section 6A (1) of the CST Act is unconstitutional and / or ultra vires to Article 269(3) of the Constitution of India and / or Entry no. 92 A of List I of the Schedule 7 of the Constitution, as contended on behalf of the petitioners. Under the circumstances, the decisions of the Hon'ble Supreme Court in the case of Gannon Dunkerley and Co (Madras) Ltd (supra) and in the case of Bharat Sanchar Nigam Ltd (supra) shall not be applicable to the facts of the case on hand. 13.1 Similarly, for the reasons stated above and as observed herein above, complete machinery is provided under Section 6A of the CST Act and that Section 6A is a procedu ..... 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