Hotel Janatha Vs. Commissioner of Commercial Taxes - Court Judgment

Excerpt:
- allotment of alternative site: [mohan shantanagoudar, j] acquisition of revenue site of petitioner by bda with a promise to allot alternative site - compensation was not paid petitioner complied with requirements bda contending that it is highly belated and no provision after 2000 to allot alternative site held, the bda being the statutory authority will have to fulfill its solemn promise made by it in annexure-a. the petitioner as dutiful citizen has surrendered his revenue site based on the promise that he would be allotted a site by bda. the respondent authority which has undertaken to allot site is estopped from backing out from its promise held out to the petitioner who, acting upon the promise, suffered liability [gujarat state financial corporation vs. m/s. lotus hotels private limited, 1983 (3) scc 379]. it is trite law that when one of the contracting parties is cease to enjoy the character of state and therefore it is subjected to all the obligations that state has under the constitution. when the states acts of omission or commission are tainted with extreme arbitrariness, they are certainly subject to interference by the constitutional courts of the country. the respondent-bda has entered into a solemn contract in discharge and performance of its statutory duty and the respondent has acted upon it. thus, the statutory body cannot be allowed to act arbitrarily so as to cause harm and injury, flowing from its unreasonable conduct, to the petitioner. in such a situation, the court is not powerless to hold that the respondent is bound to fulfill its promise and it can be enforced by a writ of mandamus directing it to perform its statutory duty. it is also worth noticing that the respondent has not fulfilled promise inspite of lapse of 30 years. the action of the respondent is arbitrary, in as much as, it has taken possession of the property of a citizen without paying the compensation. the promise made by the respondent of allotting alternative site in lieu of compensation also is not fulfilled by bda. thus the inaction of the respondent cannot be sustained. having regard to the totality of the facts and circumstances, equity and good conscience, this court is of the opinion that the promise made by bda shall be fulfilled by it, lest the citizen will loose faith in administration. the citizen will have to get justice atleast belatedly. he should not feel disgusted that he would not get justice that too from the statutory authority which has made solemn promise. in view of the same, the endorsement issued by bda negativing the claim of the petitioner is liable to be quashed. bda is directed to allot a site measuring 30 x 40 ft in any layout of bangalaore city at the current allotment value, as expeditiously as possible, but not later than the outer limit of four months from the date of receipt of this order. g.c. bharuka, j.1. the revision petitioner is a registered dealer under the karnataka sales tax act, 1957 (in short 'the act'). it is aggrieved by the order dated november 14, 1994 passed by the tribunal in s.t.a. no. 1055 of 1988.2. the petitioner is a hotelier, selling food and drinks. for the financial year 1983-84 it declared its total taxable turnover at rs. 5,00,191. but while making the assessment under section 12(3) of the act, it was determined at rs. 6,13,900. despite the said fact, the assessing authority granted the benefit of composition under section 17(4) of the act as substituted by karnataka sales tax (second amendment) act, 1983 (act no. 23 of 1983). but the said order was set aside under suo motu revisional jurisdiction by the deputy commissioner of commercial taxes, under section 21 of the act by its order dated july 27, 1988, on the ground that for the year in question no composition was available in the case of hoteliers, having total turnover above rs. 2,50,000. against the said order the petitioner went in appeal before the tribunal. but to its dismay the tribunal has also opined against it. this is how he has been forced to come up in revision before this court.3. section 17(4) of the act as substituted by act 10 of 1983 provides for composition of tax in the cases of hoteliers or restaurateur. sub-clause (i) thereof is to the following effect :--'section 17(4)(i) notwithstanding anything contained in sub-sections (1) to (3), subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a hotelier or a restaurateur (other than a hotelier or a restaurateur engaged in reselling of goods purchased by him in the course of inter-state trade or commerce) (or vending of liquor including beer) so elects, accept in lieu of the amount of tax payable by him, during any year, under this act, by way of composition, an amount at the following rates, namely :--sl. no. total turnoverrate(1) (2) (3) 1. where the total turnoveris not less than forty thousand rupees but less than sixty thousand rupees rs. 750 2. where the total turnoveris not less than sixty thousand rupees but less than eighty thousand rupees. rs. 1,500 3. where the total turnoveris not less than eighty thousand rupees but less than one lakh rupees rs. 2,500 4. where the total turnoveris not less than one lakh rupees but less than one lakh twenty-five thousandrupees rs. 3,500 5. where the total turnoveris not less than one lakh twenty-five thousand rupees but less than one lakhfifty thousand rupees rs. 4,500 6. where the total turnoveris not less than one lakh fifty thousand rupees but less than two lakh rupeesrs. 6,000 7. where the total turnoveris not less than two lakh rupees but less than two lakh fifty thousand rupeesrs. 7,500 (ii) any hotelier or restaurateur may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted, he shall pay the amount due in advance during the year in equal monthly instalments on or before the 25th of the month following each month and for that purpose shall submit such statements or returns in such manner as may be prescribed ;(iii) the amount paid under clause (ii) shall be subject to such adjustment as may be necessary on the completion of final assessment.'4. from the above provisions it is clear that the composition is permissible subject to exercise of the option by the dealer to pay tax as per composition scheme for a particular year in lieu of the tax payable by him under other provisions of act. the word 'year' has been defined under clause 2(x) to mean the year commencing on the first of april.5. as could be seen from the above, under section 17(4) of the act, as inserted by the karnataka sales tax (amendment) act, 1983 (act 10 of 1983) the legislature, in its wisdom had extended the benefit of composition to the hoteliers having total turnover up to rs. 2,50,000 only. this provision was brought into force with effect from april 1, 1983. but the said sub-section was again substituted by the karnataka sales tax (second amendment) act, 1983 (act 23 of 1983) by raising the upper ceiling of the total turnover to rs. 7,50,000 keeping in view the said development, the sole question that fell for consideration before the tribunal, and now before us, is whether sub-section (4) of section 17 as substituted by act 23 of 1983, which came into force from november 18, 1983, can be made applicable to the case of the petitioner in respect of the year under consideration, i.e., 1983-84. since there appeared to be some ambiguity in the said area of law, therefore, the legislature made the legal position clear in this regard by inserting sub-section (8-a) in section 43 of the act by act 27 of 1985. this sub-section reads as under :'section 43(8-a).--notwithstanding anything contained in this act, the provisions of section 17(4) as amended by the karnataka sales tax (second amendment) act, 1983 shall not apply to the composition of tax payable in respect of any year commencing prior to the commencement of the said act, but the provision of the said sub-section as they stood prior to such commencement shall apply to such composition.'6. the above sub-section (8-a) of section 43 of the act starts with a non obstante clause. therefore even if there be any inconsistency between the said provision and any other provision of the act, it will have an overriding effect in respect of composition of tax liability of a hotelier or a restaurateur for the years which had commenced prior to the commencement of karnataka act 23 of 1983.7. in the present revision petition, we are concerned with the year commencing on april 1, 1983. the act 23 of 1983 had commenced on november 18, 1983. this makes it glaringly clear that the year in question had commenced prior to the commencement of act 23 of 1983. as such, sub-section (8-a) of section 43 conies into operation to disentitle the petitioner to take the benefit of composition scheme envisaged under the act 23 of 1983 which provided for application of the said scheme to even such hoteliers and restaurateur, who had total turnover up to rs. 7,50,000.8. in the said view of the matter, in our opinion, no error of law has been committed by the tribunal in rejecting the plea of the petitioner claiming the benefit of composition scheme under section 17(4) of the act for the year in question which had commenced from april 1, 1983. the revision petition is accordingly dismissed.