J.K. Tyre and Industries Ltd. Vs. State of Punjab and ors. - Court Judgment

Excerpt:
- hindu law -- custom: [vijender jain, c.j., m.m. kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of ancestral property - punjab and haryana - held, in respect of state of punjab by virtue of punjab amendment act, 1973 there is a complete bar to contest any alienation of ancestral or non-ancestral immovable property or appointment of an heir to such property on ground that such alienation or appointment was contrary to custom. in punjab the property in hands of a successor has to be treated as coparcenary property and its alienation has to be governed by hindu law except to the extent it is regulated by sections 6 and 30 of the hindu succession act. in haryana, property in hands of successor has to be treated as coparcenary property as well as ancestral property. parties can fall back upon hindu law in case they fail to establish that rule of decision is custom. therefore, in haryana both under hindu law and the customary law, the alienation would be open to challenge. custom was given precedent over uncodified hindu law presumably for reason that custom has been consistently replacing the hindu law. however, it was soon realized that ancestral immovable property, which ordinarily held to be inalienable amongst jats of punjab by virtue of custom except for necessity, no limitation was placed on degrees of collateral, eligible to contest such alienation. it was, therefore, felt necessary to engraft certain restriction on degrees of collateral, eligible to contest an alienation, which under the custom itself was not limited. accordingly, the punjab custom (power to contest) act, 1920 (act no.2 of 1920) was enacted. the hindu succession act was extended to the state of punjab. act 2 of punjab act defined expression alienation to include any testamentary disposition of property and appointment of an heir was to include any adoption made or purporting to be made according to custom. a further provision was made by section 3 that hindu succession act was to apply only in respect of alienation of immovable property or appointment of heirs made by persons who in regard to such alienation or appointment were governed by custom. whereas section 4 declared that hindu succession act was not to affect any right to contest any alienation or appointment of an heir made before the date on which the succession act was to come into force. in other words, act, no.2 of 1920 was not to affect alienation or appointments of heir made before date on which it came into force. it also preserved the rights of any alienation or appointment of an heir made by a family. after section 7 was inserted in act of 1920 by the punjab amendment act of 1973 right of contest being contrary to custom had been totally effaced and taken away. therefore, no person has any right to contest any alienation of immovable property whether ancestral or non-ancestral on ground of being contrary to custom after january 23, 1973. in haryana, the situation as enunciated by act no.2 of 1920 continued to prevail in respect of alienation because no reforms parallel to punjab as brought by amendment act of 1973, had been enacted although right to pre-emption has been substantially abolished in haryana also. no steps even have been taken in that regard. therefore, situation in haryana have to be regarded as it existed under act no. 2 of 1920. hindu succession act,1956[c.a.no.30/1956] -- sections 6 & 30: [vijender jain, c.j., m.m.kumar, jasbir singh, rajive bhalla & rajesh bindal, jj] alienation of coparcenary property - law laid down by full bench in joginder singh kundha singh v kehar singh dasaundha singh [air 1965 punjab 407] and pritam singh v assistant controller of estate duty, patiala [1976 punj lr 342] -whether there is any conflict? - held, the basic controversy in the full bench decision of joginder singhs case was regarding constitutional validity of section 14 of hindu succession act and as to whether it infringes article 14 of constitution. it was held that the estate held by male and limitation on his power of alienation were in no way removed and the reversioners were not debarred from challenging such alienations. the full bench held that section 14 of hindu succession act postulates that estate held by a hindu female before enforcement of succession act either by inheritance or otherwise, was enlarged and on date of enforcement of succession act, she became a full owner. likewise, if she has inherited any estate after the commencement of the act, she was to be regarded as absolute owner rather than a limited owner. consequently, the limitations on power of alienation automatically vanished. this was the necessary result of the provisions made in section 14 of the act. the full bench further held that in respect of male proprietors, no corresponding provision was made either enlarging their estate in ancestral property or enlarging their power of alienation over property inherited by them. however, it noticed section 30 and observed that it only deals with power of his share in coparcenary property by will, which prior to enforcement of the act, he had no right to do. the only provision made in respect of male proprietor regarding alienation of property was his power of alienation by will. in so far as persons governed by custom are concerned, they continued to be governed by the restriction on the power of alienation of a male holder as existed before enforcement of the act. likewise, other restriction on alienation other than disposal by will also continued. the full bench, thus, recognized the superior right of hindu females by virtue of section 14 and upheld the provision as intra vires. the argument that reversioners have ceased to exist after enactment of provisions of section 14 of succession act, was rejected as there was no provision pointed out to that effect. the proposition laid down by the full bench in pritam singhs case was that the hindu succession act has not abolished joint hindu family with respect to rights of those who were members of mitakshara coparcenary, except in the manner and to the extent mentioned in sections 6 and 30 of the act, this statement should also imply, though it does not say so expressly, the succession act to this extent does not affect the rights of the members governed by dayabhaga coparcenary. the full bench in pritam singh;s case expressly noticed the judgment of earlier full bench in joginder singhs case but construed the same as irrelevant by observing that it dealt with the power of alienation of a person governed by customary law and constitutional validity of section 14 of hindu succession act. thus there is no real conflict between the two full bench judgments. both the full bench judgments have been delivered on the assumption that joginder singhs case dealt with question of alienation whereas pritam singhs case had decided the question concerning succession. even on fact in joginder singhs case the issue was validity of alienation by consent decree by a father to his two sons, which was challenged by third son, whereas in pritam singhs case the question of nature of property in hands of sons on death of their father had arisen for purposes of assessment of estate duty. in pritam singhs case the property in the hands of the sons was held to be coparcenary property and only 1/3rd of property belonging to deceased father was considered eligible for estate duty. therefore, there was no question of alienation in pritam singhs case. - 3, excise and taxation commissioner, punjab has also failed in performing his duties and overseeing the working of the department and also in not ensuring the refund, which is the statutory right of the petitioner.m.m. kumar, j.1. this petition filed under article 226 of the constitution prays for issuance of a direction to the respondents to refund an amount of rs. 1,19,934 to the petitioner, which was deposited on july 5, 2000 for release of goods, consequent upon acceptance of the appeal by the sales tax tribunal-i, punjab (for brevity, 'the tribunal'), vide order dated september 1, 2005 (p3). the petitioner has also claimed interest on the aforementioned amount under the provisions of section 12(3) of the punjab general sales tax act, 1948 (for brevity, 'the 1948 act') with effect from december 1, 2005, i.e., after expiry of period of ninety days from the date of passing of order dated september 1, 2005 by the tribunal, till the date of actual refund by the respondents.2. brief facts of the case are that consignment of tyres despatched from mysore was reported on may 7,2000 at 6.30 a. m. at mahmadpur (shamboo) near rajpura. even though all the documents were produced, the vehicle and the consignment were detained at paragpur (jalandhar) by the excise and taxation officer (mobile wing) and penalty was imposed, which was paid by the petitioner.3. the matter ultimately travelled up to the tribunal and the order of penalty was set aside vide order dated september 1, 2005 (ps). the petitioner sought refund of the amount deposited. on january 3, 2006, another application was filed and several reminders were given but no action was taken on the claim of the petitioner. the petitioner then filed the instant writ petition.4. on may 23, 2008, notice was issued. in the reply filed, it has been stated that after receiving notice of the instant petition, refund of rs. 1,19,324 vide refund voucher dated july 7, 2008 was given to the petitioner, which was duly received on july 10, 2008. however, no explanation has been tendered why refund was not given before filing of the writ petition, though the same was statutorily required.5. on august 25, 2008, following order was passed:the learned counsel for the state seeks time to seek instructions on the issue of payment of interest in accordance with law laid down in the judgments relied upon by learned counsel for the petitioner being, kashmir south roadways (regd.) v. excise and taxation commissioner, u.t., chandigarh : [2008] 14 vst 320 (p&h;) : [2008] 31 pht 370 (p&h;), malli mai sant lal & co. v. state of punjab : [2002] 126 stc 331 (p&h;), sutlej industries limited v. state of punjab [2001] 121 stc 552 (p&h;) and opk woollen mills (p) ltd. v. state of punjab [1998] 110 stc 481 (p&h;). list again on october 22, 2008.6. when the matter came up before the division bench on october 22, 2008, learned counsel for the petitioner apprised the court that the amount was refunded without interest, which was against the statutory provisions of section 12(3) of the 1948 act, requiring the payment of interest if the refund was beyond ninety days. the learned counsel has further asserted that in spite of order dated august 25, 2008, interest has not been paid to the petitioner. after hearing learned counsel for the parties, the division bench made the following observations:10. from the above, it is clear that there is gross dereliction of duties in not making the refund for a period of more than three years and the assistant excise and taxation commissioner did not take any step in the matter. respondent no. 3, excise and taxation commissioner, punjab has also failed in performing his duties and overseeing the working of the department and also in not ensuring the refund, which is the statutory right of the petitioner.11. there is a flow of cases of this nature in this court and at times, it is stated that refunds are not given for extraneous considerations.12. in another petition listed today being c.w.p. no. 18293 of 2008, jai bharat trading co. v. state of punjab (decided on november 25, 2008--punjab and haryana high court) it has been pointed out that refund has been given after seventeen years and that too without any interest.13. the above shows a dismal picture of honesty and responsibility of the sales tax officers responsible for giving refund. if the department has right to recover, it cannot ignore its duty to refund the amount found to have been illegally recovered. mechanism has to be evolved by the administration to fix accountability and responsibility for abuse of power.14. we direct the chief secretary, punjab to look into the matter and take appropriate action against the persons found responsible and also against respondents nos. 3 and 5 for dereliction of duties, which is patent in the present case and submit a report to this court before the next date.15. we make it clear that if chief secretary fails to comply with the order, he will be held personally accountable for the default.7. in pursuance of order dated october 22, 2008, an affidavit of the chief secretary, punjab, dated november 21, 2008, has been filed, stating that the refund has been made to the petitioner and the chief secretary had a meeting with financial commissioner, excise and taxation for evolving a mechanism. the explanations of some officers have also been called and appropriate action was to be taken after considering the reply. in the minutes of meeting, dated november 20, 2008 (r1 colly), it has been mentioned that method and system should be in place so that right of a person to receive refund can be duly looked after. it has been further observed that a monitoring system needs to be drawn up to ensure compliance of statutory provisions. the department has disposed of refund applications to the extent of eighty-one persons. it has been also recorded that the pending refund applications would be promptly disposed of.8. another affidavit dated february 25, 2009 was filed by the chief secretary, punjab, containing further progress in the matter including various short-term and long-term measures to be adopted by the department which carve out various steps for streamlining the system of vat refunds. on march 9, 2009, learned counsel for the petitioner placed on record documents showing that amount of refund along with interest has been released by the respondents. yet another affidavit dated march 20, 2009 has been filed by the chief secretary, punjab, mentioning that a meeting was held on march 18, 2009 and in light of the decisions taken in the said meeting, the finance department has issued detailed instructions dated march 19, 2009, to all the district treasury officers for clearing the refund orders from the treasuries within 48 hours without awaiting instructions from headquarter (r2).9. in view of the aforementioned factual matrix, we are of the view that the instructions dated november 20, 2008 and march 19, 2009 (r1 and r2 respectively), issued by the respondent-state would produce desirable result, implementing the provisions of the 1948 act and the punjab value added tax act, 2005 in their letter and spirit, which would pave the way for amicable relationship between the entrepreneurs and the establishment. the respondent-state shall remain bound by all the affidavits and instructions. the writ petition stands disposed of.