KISAN CRUSHER v. DEPUTY CANE COMMISSIONER, MEERUT — 1999 DIGILAW 648 (ALL)

M. C. AGARWAL, J. ( 1 ) BY this petition under Article 226 of the Constitution of India, the petitioner challenges an order dated 30. 12. 1997 passed by the Khandsari Inspector-cum-Assessing Officer, Roorkee rejecting the petitioners option made under Section 3 (1-a) of the U. P. Sugarcane (Purchase Tax)Act, 1961 (hereinafter referred to as the Act) and an order dated 24. 2. 1998 passed by the deputy Sugar Commissioner rejecting the petitioners revision petition against the first mentioned order. ( 2 ) COUNTER and rejoinder-affidavits have been exchanged. ( 3 ) I have heard Sri P. C. Pathak, Advocate holding brief from Sri V. K. Shukla, counsel for the petitioner and Sri S. D, Singh, learned standing counsel for the respondents. ( 4 ) THE petitioner owned a sugar unit as defined in the Act and by virtue of Section 3 of the Act was liable to pay tax on the purchase of sugarcane. Section 3 of the Act is the charging section and Section 3 (1-a) of the Act provides for the levy of tax on the assumed purchase of sugarcane thereby making it unnecessary to have recourse to the procedure for assessment on determination of actual purchases. Rule 13a of the U. P. Sugarcane (Purchase Tax) Rules, 1961 provides for the procedure of the exercise of option and the other necessary requirements. The said rule is as under: "13a. Payment of tax by owner exercising option.--The option referred to in proviso to subsection (1) of Section 3 of the Act (hereinafter called "the option") shall be exercised by the owner of a unit by way of declaration in Form XIII, which shall be sent under registered cover to the Sugar Commissioner, the Assistant Sugar Commissioner and the Assessing Officer so as to reach them 15 days before the start of the unit. In such declaration the owner shall specify the date from which he decides to start the working of his unit: provided that where the owner decides to start the working of his unit from any date earlier than the date specified under this sub-rule he shall, before he starts the working of his unit, give intimation to this effect, in writing and under registered cover at least one week before the date from which he decides to start the working of his unit to the Sugar Commissioner, the Assistant sugar Commissioner and the Assessing Officer : provided further that where the owner decides to start the working of his unit from any date subsequent to the date specified under this sub-rule, he shall give an intimation to this effect, in writing and under registered cover to the Sugar Commissioner, the Assistant Sugar commissioner and the Assessing Officer, at least one week before the date specified. (1a) The owner of a unit shall give an intimation in writing of the date on which he decides to close the working of the unit. It shall be given under registered cover at least one week before such date to the Sugar Commissioner, Assistant Sugar Commissioner and the Assessing Officer : provided that where the owner decides to close the working of his unit from any date earlier than the date specified under this sub-rule (1a) he shall, before he closes the working of his unit, give an intimation to this effect in writing and under the registered cover at least one week before the date from which he decides to close the working of his unit, to the Sugar Commissioner, assistant Sugar Commissioner and the Assessing Officer : provided further that where the owner decides to close the working of his unit from any date subsequent to the date specified under sub-rule (1a), he shall give an intimation to this effect, in writing and under registered cover, to the Sugar Commissionier, the Assistant Sugar commissioner and the Assessing Officer, at least one week before the date specified. (2) Where the owner of a unit exercises the option, the quantity of sugarcane on the purchase of which he shall be liable to pay the tax shall be assumed on monthly basis according to specification laid down to Schedule 1 : provided firstly that in the first month of the working of the unit in any assessment year, the quantity of sugarcane for the purpose of payment of tax shall be assumed from the date specified in declaration made under sub-rule (1) or changed under the first or the second proviso that sub-rule, as the case may be : provided secondly that in the last month of the unit in any assessment year, the quantity of sugarcane for the purpose of payment of tax shall be assumed upto the date which is intimated by the owner of a unit under sub-rule (1a), or changed under the first or the second proviso to that sub-rule, as the case may be : and further that if the owner of a unit is found to have closed his unit after the specified or changed date under sub-rule (1a), the quantity of sugarcane for the purpose of payment of tax shall be assumed for the whole of such month : provided thirdly that where the owner of a unit is found to have started the working of the unit before the date specified or changed under sub-rule (1), the quantity of sugarcane for the purpose of payment of tax shall be assumed for the whole of such month. Explanation I.--The quantity of sugarcane for the purpose of payment of tax, for a part of any month, shall be proportionately assumed according to the specifications laid down in Schedule 1. Explanation II.--For the purposes of payment of tax in respect of a unit, the owner of which exercises option a month shall be deemed to be a thirty days. (3) The owner of a unit exercising option shall pay the tax by the twenty fifth day of the month immediately preceding the month for which the tax is due. Explanation II.--For the purposes of payment of tax in respect of a unit, the owner of which exercises option a month shall be deemed to be a thirty days. (3) The owner of a unit exercising option shall pay the tax by the twenty fifth day of the month immediately preceding the month for which the tax is due. (4) The owner of a unit exercising option shall, an least one week before the closure of the unit for the assessment year, obtain from the Assessing Officer a certificate of clearance of the purchase tax in Form XIV and forward one copy each thereof to the Collecting Authority and the secretary of the Cane Development Council concerned. " ( 5 ) THE option is to be exercised in statutory Form XIII prescribed under the Rules. The petitioners case is that it exercised the option and the requisite Form XIII was sent by registered post and was received in the office of the respondents on 7. 10. 1994 in which it was declared that the unit would start crushing from 25. 10. 1994. A subsequent intimation was, however, sent on 12. 10. 1994 by registered post to the Khandsari Inspector that the unit will start crushing from 19. 10. 1994. According to the petitioner, actual crushing, however, started from 20. 10. 1994. The petitioner paid the taxes according to the option without any objection. However, after more than three years, the Khandsari Inspector-cum-Assessing Officer issued a notice dated 6. 12. 1997 asserting that the option was illegal because the subsequent intimation dated 12. 10. 1994 was received in the office on 17. 10. 1994 and crushing was started on 19. 10. 1994 and thus the option having not been received 15 days before the start of the crushing the same was invalid. After hearing the petitioner, its contention was rejected and by an impugned order dated 30. 12. 1997 the assessing officer rejected the option. The petitioner then came to this Court in Writ Petition no. 12 of 1998 challenging the said order dated 30. 12. 1997. The writ petition was rejected on 9. 1. 1998 on the ground of alternative remedy. The Court noted that the petitioner could avail the remedy of revision petition under Section 3b of the Act. The petitioner then came to this Court in Writ Petition no. 12 of 1998 challenging the said order dated 30. 12. 1997. The writ petition was rejected on 9. 1. 1998 on the ground of alternative remedy. The Court noted that the petitioner could avail the remedy of revision petition under Section 3b of the Act. The petitioner then preferred a revision petition to the Deputy Sugar Commissioner, Meerut which has been rejected by the impugned order dated 24. 2. 1998. The petitioner has thus come to this Court once again in the present writ petition and its case is that the option having been made and having been acted upon, it could not be rejected after a lapse of more than three years. ( 6 ) IN the counter-affidavit, the facts are not disputed and the contention is the same as recorded by the authorities below in their respective orders. ( 7 ) AS stated above, the question is whether the option having not been rejected immediately when it was made, could the assessing officer do so afterwards. ( 8 ) I have reproduced Rule 13a in extenso. The various provisions in the Rules contain detailed provisions regarding submissions of the option, the intimation of the date of crushing as well as of closure and the intimations regarding proposed changes in any of the two dates. The provision in sub-rule (2) also takes care of the situation where the owner of the unit may have started the unit before or may have closed the unit after the date already intimated. If it so happened, then instead of assuming the purchases for a part of the month as prescribed, the quantity of sugarcane for the purposes of payment of tax shall be assumed for the whole of such month. Sub-rule (3)provides that the tax shall be paid in advance, i. e. , by the twenty fifth day of the month immediately preceding the month for which the tax is due. Lastly, sub-rule (4) requires the owner of a unit exercising option to obtain a clearance certificate at least one week before the closure of the unit for the assessment year and one copy thereof is to be forwarded to the collecting Authority and another copy to the Secretary of the Cane Development Council concerned. Lastly, sub-rule (4) requires the owner of a unit exercising option to obtain a clearance certificate at least one week before the closure of the unit for the assessment year and one copy thereof is to be forwarded to the collecting Authority and another copy to the Secretary of the Cane Development Council concerned. ( 9 ) ON receipt of the option in Form XIII, the Khandsari inspector-cum-Assessing Officer is required to visit the spot before the unit starts working and verify the details of the machinery. He has to record a certificate on Form XIII in the following manner : "verified that the details of machinery as given above are correct. " then he has to forward the option to the Sugar Commissioner, U. P. ( 10 ) ALL this having been done and the Khandsari Inspector-cum-Assessing Officer having allowed the owner of the unit to pay tax according to option, it Is not open to the Khandsari inspector or to any other authority to reject the option and proceed to make assessment on the basis of actual purchases. The submissions of the option and the payment of tax in accordance therewith concludes the matter between the parties and, except where it is shown that there was collusion between the Khandsari Inspector and the owner of the unit or there was fraud on the part of the owner of the unit, no action of the nature contained in the order dated 6. 12. 1997 can be taken. In Writ Petition No. 1367 of 1988 Kalyan Singh v. Khandsari Nirikshak Euam Kar nirdharan Adhikari, decided by a Division Bench of this Court on 8. 10. 1991, this Court observed as under: "in the case of M/s. Ganga Saran Gajendra Singh v. Assistant Sugar Commissioner, Bijnor, in writ Petition No. 1984 of 1988. decided on 13. 2. 1991 this Court has held that it is not right and proper to cancel the option exercised by the crushers under Rule 13a after lapse of a long time after the crushing season is over. The position in the present case is exactly the same. The option has been cancelled in July. 1988 with respect to an option exercised in October/november, 1986. Following that decision the petition succeeds and is allowed. The impugned order passed by Khandsari Inspector/assessing officer dated 12. 7. 1988 is quashed. The position in the present case is exactly the same. The option has been cancelled in July. 1988 with respect to an option exercised in October/november, 1986. Following that decision the petition succeeds and is allowed. The impugned order passed by Khandsari Inspector/assessing officer dated 12. 7. 1988 is quashed. " ( 11 ) IN M/s. Charan Singh and sorts v. Assistant Sugar Commissioner. Writ Petition No. 421 of 1998. decided by me on 1. 4. 1998 also a similar situation came for consideration. In that case, the option for the year 1996-97 was set at naught by a succeeding Khandsari Inspector by an order dated 25th August. 1998 on the ground that the machinery installed was different than what was mentioned in Form XIII and it was inter alia contended on behalf of the respondent authorities that an option can be rejected at any time if it is found to be not in order. This is how I negatived this contention ; "the contention of the respondents that an option can be rejected at any time is untenable. If such a contention is accepted and Khandsari Inspector is allowed to open up old matters it would flung the gates of corruption wide open and make the life of a tax payer absolutely insecure. Form XIII in which an option is exercised requires the dealer only to mention the number of power crusher with size, it does not require the owner of a sugar unit to mention all the details of the machinery such as whether it will be a spring loaded device or not. Then the details have to be verified by the Khandsari Inspector-cum-Assessing officer and he has to record a certificate on Form XIII itself in the following language : "verified that the details of machinery as given above are correct. " thereafter, the form has to be forwarded to the Sugar Commissioner. All this having been done, it is not open to the Khandsari Inspector after allowing the dealer to act in accordance with the option to take a round about turn and reject the option and proceed to make an assessment. If at all the option was wrongly accepted by the Khandsari Inspector, the remedy lay in a revision to the Sugar Commissioner in terms of Section 3b and that power could be exercised only within six months. If at all the option was wrongly accepted by the Khandsari Inspector, the remedy lay in a revision to the Sugar Commissioner in terms of Section 3b and that power could be exercised only within six months. In the present case, as is admitted, the erstwhile Khandsari Inspector had accepted the option and the same having been forwarded to the Sugar Commissioner, it was not open to his successor to reject the same and start action for making an assessment. In my view, therefore, the impugned orders are without jurisdiction and this writ petition deserves to be allowed. " 11. In view of the above discussions, the entire exercise initiated by the Khandsari Inspector was illegal and in all probability activated by ulterior motives. The action is illegal and has to be quashed. ( 12 ) THIS writ petition is allowed. The impugned orders dated 30. 12. 1997 and 24. 2. 1998 are hereby quashed. The petitioner will get his costs of this writ petition from the respondents which i assess at Rs. 2,500 (Two thousand five hundred ). .