TMI Blog2020 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Absent this condition in the Daman Rules, 1973; the Petitioners contend that Form-C cannot be withheld. In the present case, the proceedings have been initiated against the Petitioners for misuse of Form-C. In these proceedings, the Petitioners had sought to pay the penalty by way installments and accepted the order and have not paid the amount. According to the Respondents, the Petitioners have already misused Form-C and penalty is levied thereon. In this context, the Respondents have sought to withhold furnishing of Form-C till the Petitioners resumes payment of installments as undertaken. Prima facie, we find merit in the contention of the Respondents that in such circumstances inherent powers exist in the authority upon noticing an abuse to prevent further abuse. It is, however, not necessary for us to conclude this issue finally for two reasons. Firstly, that we are not inclined to exercise our equity jurisdiction and, secondly, in a pending appeal the Petitioners can take up the contentions as may be available in law - The appeal of the Petitioners in respect of penalty is pending before the Tribunal. If the Petitioner requests the Tribunal to pass an order regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 50 lakh each per quarter. The Petitioners paid the first installment of ₹ 50 lakh on 19 May 2018 and thereafter stopped paying the installments. The appeal is pending. 5. As regards the issuance of Form-C regarding petroleum products purchased from Respondent No.4- BPCL the Petitioners had applied for the same in August 2018. According to the Petitioners, initially, the purpose of the purchase was shown as 'use in the manufacture'. After Forms-C were issued to the Petitioners on 13 August 2018, the Petitioners applied for rectification of Form-C stating that it was inadvertently sought on the ground of manufacture when it should have been for 'resale'. By the impugned communication dated 16 August 2018 notified on the official gazette, the Petitioner s request for issuance/rectification of Form-C was rejected on the ground of non-payment of the second installment. 6. Since the Petitioners did not produce Form-C, BPCL took coercive action against the Petitioners. The Respondents also filed a criminal complaint against the Petitioners for misuse of Form-C and the criminal case is pending. A search of the petrol pump was also taken, and the pump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 335. Mr. Sridharan submitted that further, the ground of non-payment of arrears is nothing to do with issuing Form-C for the subsequent period. As regards the invocation of equity jurisdiction of this Court under Article 226, it is contended that non-payment of arrears by the Petitioners because of financial hardship cannot be termed as Petitioners approaching the Court with unclean hands to deny the relief on this ground. It is submitted that for denial of relief on the ground of conduct, the general conduct of the litigant should not be considered and only if the conduct has a direct nexus to the relief sought that the Court can consider such conduct. It is contended that there is no direct nexus present in the case. In support of this proposition, reliance is placed on the decision of the Ap ex Court in Arunima Baruah v. Union of India (2007) 6 SCC 120 and Public Passenger Service Ltd. v. M.A.Khadar AIR 1966 SC 489. Reliance is also placed on the extract of Halsbury s Law of England, 4th Edn, Vol.16, pp 874-76 and the extract from Snell s Equity, 25 Edn, pp 30-31. 10. Mr. Deshmukh, the learned counsel for Respondent Nos.1 to 3 contended that the Petitioners are not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed authority: Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit. The declaration to be furnished as per section 8(4) has been prescribed in the Central Sales Tax (Registration and Turnover) Rules, 1957 in Form-C pursuant to Rule 12 thereof. This form gives particulars of the purchasing dealer, its transportation, the use for which the goods are to be purchased and the undertaking that what is stated in the form is true to the knowledge and belief of the person signing the same. As per the scheme of section 8 and the Rules, upon furnishing Form-C, the seller gets an advantage of a concessional rate of tax as stipulated, failing which the Act provides for a higher rate of tax. A distinct advantage thus is gained by furnishing Form-C. As stipulated, the concessional rate would be attracted in case of resale but not in the case of self-consumption. 12. The Petitioners are before us in writ jurisdiction. The Petitioners appeal against the earlier order is pending; however, the Petitioners have sought to invoke the equity jurisdiction of this Court. The law gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents to withhold Form-C on the ground of non-payment of arrears and (ii) whether any indulgence can be given to the Petitioners in writ jurisdiction of this Court. 14. The Petitioners have relied upon various decisions. The first decision is of the Division Bench of the Gujarat High Court in the case of Dhru Automobiles. Here, the authorities had conveyed to the petitioner that Form-C cannot be issued because of the outstanding dues of the petitioner therein under the Value Added Tax Act/Entry Tax Act. It was argued that non-issuance of Form-C under the Central Sales Tax Act for the outstanding dues under the Value Added Tax Act/Entry Tax Act was without jurisdiction and illegal. The Gujarat High Court held that in the absence of dues under the Central Sales Tax Act, it is not permissible for the respondents to refuse Form-C because tax under other enactments is outstanding. Mr. Sridharan placed reliance on the observation that even if there are outstanding dues under the Central Sales Tax Act, it would not be permissible to refuse issuance of Form-C if the requirements of section 8 are satisfied. This, in our respectful opinion, is an obiter and not the ratio. The court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the Mr.Sridharan placed reliance on the observations of the Apex Court in the case of Arunima Baruah to contend that if relief is to be denied in equity on the ground of suppression of facts or conduct, it must have direct nexus to the relief sought. In the case before the Apex Court, the appellant had first filed a civil suit before the District Court and then filed a writ petition. The learned single Judge of the Delhi High Court dismissed writ petition on the ground of suppression of fact that the suit was filed. The Division Bench confirmed this order. Thereafter the matter was considered by the Apex Court. The application for withdrawal of the suit was filed before the writ petition came up for consideration. After taking a review of various decisions, the Apex Court did not interfere with the order except the mandate faced by the learned single Judge and the learned Division Bench in not able to file another petition. The extract from the commentaries also lay down the same basic proposition that the conduct, if it is relatable to the relief sought, is material. 16. The fact situation of dishonouring undertaking to pay and seeking equitable relief is squarely dealt wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the Division Bench noted that the petitioner was continuing in default till the date and no installments had been paid. The Division Bench observed that the Court's jurisdiction under Article 226 is equitable, extraordinary and discretionary and no defaulter should be allowed to take benefit thereof and observed that on that ground alone the writ petition deserves to be dismissed. 17. The Petitioners requested the Respondents to permit the Petitioners to pay the disputed dues by way of installments. When the Respondent No.3 passed an order allowing the Petitioners to pay the dues in installments, the Petitioners paid the first installment and thereafter stopped paying the installments. The appeal proceeding is pending. The installment is of the amount of penalty for misuse of Form C. The Petitioner is seeking a direction to issue Form C. Therefore, the contention of the Petitioner that this conduct is not relevant for the direction sought, is entirely incorrect. The conduct has direct bearing and nexus to the relief sought. In the circumstances, we are not inclined to exercise our writ jurisdiction. 18. Rule 5 of the Daman Rules, 1973 specifies the authority from wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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