Jai Matadi Re-rolling Mills (P) Ltd. Vs. State of Orissa and ors. - Court Judgment

SooperKanoon Citationsooperkanoon.com/531458
SubjectSales Tax
CourtOrissa High Court
Decided OnJan-14-2005
Case NumberOriginal Jurisdiction Case No. 9474 of 1997
JudgeA.K. Patnaik and ;A.K. Parichha, JJ.
Reported in2005(I)OLR376
ActsOrissa State Financial Corporation Act, 1951 - Sections 29; Orissa Sales Tax Act, 1947; Central Sales Tax Act; Constitution of India - Article 226
AppellantJai Matadi Re-rolling Mills (P) Ltd.
RespondentState of Orissa and ors.
Appellant AdvocateMillan Kanungo, ;L. Kanungo, ;P. Pradhan, ;S. Das and ;P.K. Rath, Advs.
Respondent AdvocateAddl. Standing Counsel, (for opp. party Nos. 1 and 2), ;B.M. Patnaik, ;R. Sharma, ;S.R. Singhsamanta and ;R. Das, Advs. (for opp. party No. 5) and ;S.N. Sinha, ;S. Basu and ;S. Dash, Advs. (for opp.
Excerpt:
- labour & services pay scale:[tarun chatterjee & r.m. lodha,jj] fixation - orissa service code (1939), rule 74(b) promotion - government servant, by virtue of rule 74(b), gets higher pay than what he was getting immediately before his promotion - circular dated 19.3.1983 modifying earlier circular dated 18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - to make out a rehabilitation package to rehabilitate the petitioner's re-rolling mill and a direction to the sales tax authorities as well as the o.a.k. patnaik, j. 1. the petitioner purchased the assets for the re-rolling mill situated at a-3, industrial estate, kalunga, district - sundargarh from the orissa state financial corporations (for short, 'the o.s.f.c.') after the said re-rolling mill was seized by the o.s.f.c. under section 29 of the state financial corporation act, 1951. thereafter the petitioner has entered into an agreement with the o.s.f.c. on 28.2.1994 to pay a total consideration of rs. 55.00 lakhs to the o.s.f.c. out of which the petitioner has already made a down payment of rs. 9.00 lakhs and has to pay the balance amount of consideration in instalments as fixed in the said agreement with the o.s.f.c. after the re-rolling mill was handed over to the petitioner on 25.3.1994, the petitioner applied for registration under the orissa sales tax act and the central sales tax act, but the applications for registration were rejected and instead, the petitioner was asked to deposit a sum of rs. 5,16,758/- and rs. 6,865/- towards the dues of the previous owner of the re-rolling mill under the orissa sales tax act and the central sales tax act respectively.2. the case of the petitioner is that under the provisions of the industrial policy resolution, 1992 of the state of orissa and in particular, clause-14.2 thereof, sales tax dues payable by the previous owner shall not be realizable from the transferee of the units transferred under section 29 of the state financial corporations act, 1951 by the o.s.f.c. the petitioner has thus filed a separate writ petition o.j.c. no. 4173 of 1996 before this court against the demand of the said arrear sales tax dues of the previous owner of the unit from the petitioner, and an interim order was passed on 7.6.1996 by this court in misc. case no. 4444 of 1996 filed in the said o.j.c. no. 4173 of 1996 directing that no coercive action shall be taken for realization of the dues from the petitioner. after the said interim order was passed, the sales tax registration was granted to the petitioner both under the orissa sales tax act and the central sales tax act on 24.11.1996. the further case of the petitioner in this writ petition is that as a result of such delay in grating the sales tax registration certificate for almost two years, the petitioner was not in a position to run the re-rolling mill purchased from the o.s.f.c. and has consequently suffered loss of rs. 3.00 crores. the petitioner has, therefore, filed this writ petition praying for a direction to the o.s.f.c. to make out a rehabilitation package to rehabilitate the petitioner's re-rolling mill and a direction to the sales tax authorities as well as the o.s.f.c. to pay a sum of rs. 3.00 crores to the petitioner for damages.3. on 22.7.1997, the court passed an interim order in misc. case no. 8174 of 1997 that no coercive action shall be taken against the petitioner by the o.s.f.c. until further orders. the o.s.f.c. has filed misc. case no. 1194 of 2000 for vacating the said order dated 22.07.1997.4. mr. milan kanungo, learned counsel for the petitioner submitted that for long two years, the petitioner was not able to get a registration certificate and therefore, the petitioner has suffered immense loss and could not repay the dues of the o.s.f.c. and this is a fit case in which the o.s.f.c. should be directed to at least consider rephrasing the payment schedule under the agreement.5. mr. b. m. patnaik, learned counsel for the o.s.f.c. submitted that the o.s.f.c. can consider rephrasing of the payment schedule but cannot waive any interest payable by the petitioner to the o.s.f.c. he further submitted that in any case, the o.s.f.c. cannot be held responsible for the loss said to have been suffered by the petitioner.6. mr. ashok mohanty, learned senior standing counsel (c.t.) submitted that until the orders passed by the sales tax authorities rejecting the applications of the petitioner for registration certificates under the orissa sales tax act and the central sales tax act are held to be illegal in o.j.c. no. 4173 of 1996 filed by the petitioner against the said orders of rejection, the claim or loss alleged to be suffered by the petitioner because of illegal orders passed by the sales tax authorities cannot be considered.7. we find full force in the submission of mr. mohanty. the case of the petitioner is that it was not liable for the arrear sales tax dues of the previous owner of the re-rolling mill, namely, m/s. crown re-rollers (pvt.) ltd. in view of the clause-14.1 of the i.p.r. 1992 of the state of orissa and the petitioner has filed a separate writ petition o.j.c. no. 4173 of 1996 in this court challenging the orders passed by the sales tax authorities rejecting the applications of the petitioner for registration under the orissa sales tax act and the central sales tax act. until this court hears and decides the said writ petition o.j.c. no. 4173 of 1996 and holds that the petitioner was not really liable for the dues of the previous owner and that the orders of rejection passed by the sales tax authorities were illegal, the question of entertaining any claim of the petitioner for the loss said to have been suffered by it on account of the said orders passed by the sales tax authorities does not arise. moreover whether the petitioner has suffered any such loss and if so, to what extent cannot be established in a writ petition under article 226 of the constitution. the o.s.f.c. however can reconsider the request of the petitioner to rephrase the repayment of the dues of the petitioner to the o.s.f.c. under the agreement between the petitioner and the o.s.f.c. on its own merits considering the fact that the petitioner was not in a position to run the unit for the period it was denied registration certificates under the orissa sales tax act and the central sales tax act.8. with the aforesaid observations and direction the writ petition and misc. case no. 8174 of 1997 and misc. case no. 1194 of 2000 stand disposed of and the interim order passed by this court on 22.7.1997 is vacated.a.k. parichha, j.9. i agree.
Judgment:

A.K. Patnaik, J.

1. The petitioner purchased the assets for the re-rolling mill situated at A-3, Industrial Estate, Kalunga, District - Sundargarh from the Orissa State Financial Corporations (for short, 'the O.S.F.C.') after the said re-rolling mill was seized by the O.S.F.C. under Section 29 of the State Financial Corporation Act, 1951. Thereafter the petitioner has entered into an agreement with the O.S.F.C. on 28.2.1994 to pay a total consideration of Rs. 55.00 lakhs to the O.S.F.C. out of which the petitioner has already made a down payment of Rs. 9.00 lakhs and has to pay the balance amount of consideration in instalments as fixed in the said agreement with the O.S.F.C. After the re-rolling mill was handed over to the petitioner on 25.3.1994, the petitioner applied for registration under the Orissa Sales Tax Act and the Central Sales Tax Act, but the applications for registration were rejected and Instead, the petitioner was asked to deposit a sum of Rs. 5,16,758/- and Rs. 6,865/- towards the dues of the previous owner of the re-rolling mill under the Orissa Sales Tax Act and the Central Sales Tax Act respectively.

2. The case of the petitioner is that under the provisions of the Industrial Policy Resolution, 1992 of the State of Orissa and in particular, Clause-14.2 thereof, sales tax dues payable by the previous owner shall not be realizable from the transferee of the units transferred under Section 29 of the State Financial Corporations Act, 1951 by the O.S.F.C. The petitioner has thus filed a separate writ petition O.J.C. No. 4173 of 1996 before this Court against the demand of the said arrear sales tax dues of the previous owner of the unit from the petitioner, and an interim order was passed on 7.6.1996 by this Court in Misc. Case No. 4444 of 1996 filed in the said O.J.C. No. 4173 of 1996 directing that no coercive action shall be taken for realization of the dues from the petitioner. After the said interim order was passed, the Sales Tax Registration was granted to the petitioner both under the Orissa Sales Tax Act and the Central Sales Tax Act on 24.11.1996. The further case of the petitioner in this writ petition is that as a result of such delay in grating the Sales Tax Registration Certificate for almost two years, the petitioner was not in a position to run the re-rolling mill purchased from the O.S.F.C. and has consequently suffered loss of Rs. 3.00 crores. The petitioner has, therefore, filed this writ petition praying for a direction to the O.S.F.C. to make out a rehabilitation package to rehabilitate the petitioner's re-rolling mill and a direction to the Sales Tax authorities as well as the O.S.F.C. to pay a sum of Rs. 3.00 crores to the petitioner for damages.

3. On 22.7.1997, the Court passed an Interim order in Misc. Case No. 8174 of 1997 that no coercive action shall be taken against the petitioner by the O.S.F.C. until further orders. The O.S.F.C. has filed Misc. Case No. 1194 of 2000 for vacating the said order dated 22.07.1997.

4. Mr. Milan Kanungo, learned counsel for the petitioner submitted that for long two years, the petitioner was not able to get a registration certificate and therefore, the petitioner has suffered immense loss and could not repay the dues of the O.S.F.C. and this is a fit case in which the O.S.F.C. should be directed to at least consider rephrasing the payment schedule under the agreement.

5. Mr. B. M. Patnaik, learned counsel for the O.S.F.C. submitted that the O.S.F.C. can consider rephrasing of the payment schedule but cannot waive any interest payable by the petitioner to the O.S.F.C. He further submitted that in any case, the O.S.F.C. cannot be held responsible for the loss said to have been suffered by the petitioner.

6. Mr. Ashok Mohanty, learned Senior Standing Counsel (C.T.) submitted that until the orders passed by the Sales Tax authorities rejecting the applications of the petitioner for registration certificates under the Orissa Sales Tax Act and the Central Sales Tax Act are held to be illegal in O.J.C. No. 4173 of 1996 filed by the petitioner against the said orders of rejection, the claim or loss alleged to be suffered by the petitioner because of illegal orders passed by the Sales Tax authorities cannot be considered.

7. We find full force in the submission of Mr. Mohanty. The case of the petitioner is that it was not liable for the arrear sales tax dues of the previous owner of the re-rolling mill, namely, M/s. Crown Re-Rollers (Pvt.) Ltd. in view of the Clause-14.1 of the I.P.R. 1992 of the State of Orissa and the petitioner has filed a separate writ petition O.J.C. No. 4173 of 1996 in this Court challenging the orders passed by the Sales Tax authorities rejecting the applications of the petitioner for registration under the Orissa Sales Tax Act and the Central Sales Tax Act. Until this Court hears and decides the said writ petition O.J.C. No. 4173 of 1996 and holds that the petitioner was not really liable for the dues of the previous owner and that the orders of rejection passed by the Sales Tax authorities were illegal, the question of entertaining any claim of the petitioner for the loss said to have been suffered by it on account of the said orders passed by the Sales Tax authorities does not arise. Moreover whether the petitioner has suffered any such loss and if so, to what extent cannot be established in a writ petition under Article 226 of the Constitution. The O.S.F.C. however can reconsider the request of the petitioner to rephrase the repayment of the dues of the petitioner to the O.S.F.C. under the agreement between the petitioner and the O.S.F.C. on its own merits considering the fact that the petitioner was not in a position to run the unit for the period it was denied registration certificates under the Orissa Sales Tax Act and the Central Sales Tax Act.

8. With the aforesaid observations and direction the writ petition and Misc. Case No. 8174 of 1997 and Misc. Case No. 1194 of 2000 stand disposed of and the interim order passed by this Court on 22.7.1997 is vacated.

A.K. Parichha, J.

9. I agree.