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2001 DIGILAW 355 (PNJ)

FIZZ DRINKS P. LTD. v. STATE OF HARYANA

2001-03-15

G.S.SINGHVI, NIRMAL SINGH

body2001
JUDGMENT G. S. SINGHVI, J. - In this petition, the petitioner has prayed that the orders, annexures P1 and P3, passed by the Deputy Excise and Taxation Commissioner (1)-cum-Revisional Authority, Faridabad (East) (respondent No. 3) and the Sales Tax Tribunal, Haryana (for short, "the Tribunal"), respectively may be quashed and a direction may be issued to respondent No. 3 to decide the matter afresh keeping in view the decision of the Supreme Court in 20th Century Finance Corporation Ltd. v. State of Maharashtra [2000] 119 STC 182. 2. The petitioner, is engaged in the manufacture and sale of aerated water, which is partly sold within the State of Haryana and partly outside the State. It is registered as a dealer under the Haryana General Sales Tax Act, 1973 (for short, "the State Act") as well as the Central Sales Tax Act, 1956 (for short, "the Central Act"). By an order dated March 26, 1987, the Excise and Taxation Officer-cum-Assessing Authority, Faridabad (East) (respondent No. 4) finalised the assessment for the year 1985-86. After about six years, respondent No. 3 passed order, annexure P1, dated May 25, 1993 under section 40(1) of the State Act vide which he reversed the order of the Assessing Authority and held that the petitioner is liable to pay tax amounting to Rs. 1,08,245 under the State Act. Appeal filed by the petitioner against that order was dismissed by the Tribunal on May 8, 1997. The review application filed by the petitioner was disposed of by the Tribunal on May 3, 2000 with a direction to respondent No. 4 to consider the mistakes in the figures pointed out by the petitioner and adjust the tax liability accordingly. 3. The petitioner has averred that in view of the law laid down by the Supreme Court in 20th Century Finance Corporation's case [2000] 119 STC 182, no tax can be levied under the State Act on the transfer of goods and, therefore, orders annexure P1 dated May 25, 1993, passed by respondent No. 3 and annexure P3 dated May 8, 1997, passed by the Tribunal should be declared as void and quashed. 4. 4. In the written statement filed on behalf of the respondents, it has been averred that the orders passed by respondent No. 3 and the Tribunal had become final in May, 1997 and the petitioner cannot seek invalidation thereof on the basis of the judgment of the Supreme Court in 20th Century Finance Corporation's case [2000] 119 STC 182. They have further averred that the review petition filed by the petitioner was confined to the correction of clerical mistakes and, therefore, the order dated May 3, 2000 passed by the Tribunal disposing of the review application cannot be used to explain the delay of more than four years. Still further, the respondents have averred that the petitioner has not produced any evidence to show that the goods were transported outside the State of Haryana in the course of inter-State trade or commerce or the sale had taken place outside the State and, therefore, the proposition laid down in 20th Century Finance Corporation's case [2000] 119 STC 182 (SC) cannot be applied to its case. 5. We have heard learned counsel for the parties and perused the record. 6. In our opinion, the objection raised by the respondents to the maintainability of the writ petition on the ground that finality attached to the orders dated May 25, 1993 and May 8, 1997 cannot be undone at this belated stage by applying the ratio of the decision rendered by the Supreme Court in the year 2000 deserves to be rejected in view of the law laid down by the Supreme Court in U.P. Pollution Control Board v. Kanoria Industrial Ltd. (2001) 2 JT SC 103. One of the questions considered in that case was whether the declaration of law made by the Supreme Court in a later decision can be made basis for reopening the orders which have become final. While answering the question in the affirmative, their Lordships of the Supreme Court observed as under : "Another reason to defeat the claim for refund put forth is that the respondents have filed writ petitions challenging unsuccessfully the validity of levy in question and those orders have become final inasmuch as no appeal against the same has been filed. The contention is put forth either on the basis of res judicata or estoppel. The contention is put forth either on the basis of res judicata or estoppel. It is no doubt true that these principles would be applicable when a decision of a court has become final. But in matters arising under public law when the validity of a particular provision of levy is under challenge, this Court has explained the legal position in Shenoy and Co. v. Commercial Tax Officer, Circle II, Bangalore [1985] 60 STC 70 (SC); (1985) 2 SCC 512 that when the Supreme Court declares a law and holds either a particular levy as valid or invalid it is idle to contend that the law laid down by this Court in that judgment would bind only those parties who are before the court and not others in respect of whom appeal had not been filed. To do so is to ignore the binding nature of a judgment of this Court under article 141 of the Constitution. To contend that the conclusion reached in such a case as to the validity of a levy would apply only to the parties before the court is to destroy the efficacy and integrity of the judgment and to make the mandate of article 141 illusory. When the main judgment of the High Court has been rendered ineffective, it would be applicable even in other cases, for exercise to bring those decisions in conformity with the decisions of the Supreme Court will be absolutely necessary. Viewed from that angle, we find this contention to be futile and deserves to be rejected." 7. By applying the ratio of the aforementioned decision and the decision of 20th Century Finance Corporation Ltd.'s case [2000] 119 STC 182 (SC) to the facts of this case we hold that the orders, annexures P1 and P3, are liable to be quashed with a direction to respondent No. 3 to decide the matter afresh. Ordered accordingly. 8. The writ petition is disposed of in the manner indicated above. Petition disposed of accordingly.