GOPALAKRISHNAN NAIR, J.:

This is a Letters Patent appear from the judgment of Ali J. who quashed the order passed by the appellants assessing the respondent to sales tax for the period from October 1955 to May 1959 and also restrained the appellants from collecting tax in respect of that period from the respondent. The respondent has preferred cross-objection in respect of its liability to sales tax, for the period January 1955 to 6th September 1955.

(2) The facts leading up to the present appeal are briefly as follows. The Director of Supplies at Delhi entered into a contract with the General Manager Caltex (India), Ltd. Bombay, respondent, for sale of petrol, HSD and power Kero to the State Mechanized Farm at Nandpur within the State of Jammu and Kashmir, in pursuance of this contract the respondent company directed its depot at Pathankot situate in the Punjab to supply petrol to the Nandpur farm. The procedure adopted was that the Officer in charge of the Nandpur farm placed indents with the Pathankot depot for supply of specified quantities of petrol to the Farm and the Pathankot depot transported the petrol in its trucks to the farm and delivered it there. The price of the petrol so supplied was paid to the respondent company at Delhi by the Director of Supplies. The appellants considered that the sales of petrol to the Nandpur farm were liable to be taxed under the J. and K. Motor Spirit (Taxation of Sales,) Act, 2005 (1948 A. D.), and therefore took proceedings to that end.

On 9-12-60 a notice of demand was served on the respondent for a sum of Rs. 39619.75 which was assessed as tax due for the period January 1955 to May 1959. The respondent made representations to the Taxing authorities that the tax could not be imposed as the sales took place in the course of inter-State trade and commerce; but they proved of no avail. The appellants informed the respondent that coercive proceedings will be launched against it, if the tax assessed was not paid. Thereupon the respondent moved this Court by way of writ for quashing the assessment order of the appellants and for restraining them from levying the tax. Ali J. held that the respondent was liable to pay tax in respect of sales which took place during the period January 1955 to Sept. 1955, and, therefore, declined to grant any relief to the respondent in respect of it. Regarding the rest of the period of assessment he held that the appellants were not entitled to levy tax and therefore issued the writ asked for against them. The appellants have therefore come up in appeal challenging the validity of the writ issued against them and the respondent has taken cross-objection questioning the correctness of the view that it is liable to tax for the period January 1955 to Sept. 1955.

(3) This the respondent did by invoking the provisions of R. 22 of 0. 41 Civil P. C. But objection was taken by the appellants that 0. 41 R. 22 had no application to a Letters Patent appeal, more especially so when it related to writ jurisdiction. The respondent in support of the maintainability of his cross-objection relied upon the decisions in Mst. Sabitri Thakurain v. Savi, ILR 48 Cal 481 : (AIR 1921 PC 80); Mst. Abhilakhi v. Sada Nand, ILR 53 All. 535 : (AIR 1931 All 244) (FB) and Venkatesham Chetty v. Moti Chand Gulab Chand, ILR 49 Mad. 290 : (AIR 1926 Mad 316) (FB). But as the appellants contended that these decisions do not relate to writ jurisdiction of the High Court, the respondent prayed that his cross-objection may be treated as a regular appeal and the delay in preferring it condoned. The learned counsel for the respondent made a formal application to this effect stating that he did not prefer a regular appeal earlier because on the strength of the aforesaid decision he believed that he could validly avail of the provisions «of 0. 41 R. 22. But as the applicability of those provisions was challenged by the appellants, he did not want to take any risk in the matter and therefore prayed tha

Click Here to Read the rest of this document