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2015 Supreme(Mad) 3123
IN THE HIGH COURT OF JUDICATURE AT MADRAS
SANJAY KISHAN KAUL AND T.S.SIVAGNANAM, JJ.
The Principal Chief Conservator of Forests and Ors. – Petitioner
Versus
M/s.Gupta Exports represented by its Partner M.M.Gupta and Ors. – Respondent
M.P.Nos.1 of 2015 (4 Nos.) and Review Application Nos. 293 to 296 of 2015 (Review Application Nos.SR. 63778, 63780, 63782 and 63784 of 2015)
Decided On : 13.10.2015
For Petitioner: Mr.K.T.S.Thulsi - Senior Counsel for Mr.P.H.Arvind Pandian AAG assisted by Mr.M.K.Subramanian Special Government Pleader
For Respondents: Dr.Rajeev Dhawan - Senior Counsel Mr.AR.L.Sundresan Senior Counsel Mr. Nikhil Nayyar, Mr. TVS. Raghavendra Sreyas assisted by Mr.K.S.Natarajan, Mr.T.Saikrishnan
Headnote:
Civil Laws – Tax Exemption – Original petitioners in the writ proceedings claim to be large exporters of Sandalwood products and participated in the auction conducted by the Department of Forest, Government of Tamil Nadu, and were the successful bidders. – It is the case of the original petitioners that as per the conditions of auction, they had to pay the entire bid amount together with interest to the District Forest Officer, within 50 days from the date of confirmation of auction, and thereafter, within 75 days, the delivery of sandalwood was to be made to the auction purchaser. – Petitioners claims that since the auction purchase was pursuant to an export order, there was no liability to pay sales tax and thus sought tax exemption from the concerned department. – There was however insistence of the DFO to deposit the total amount within the stipulated time failing which the EMD would be forfeited. – This consequence followed as the original petitioners did not deposit the amount. – The original petitioners thus approached the court for quashing the forfeiture order. – Held, Division Bench opined that the view taken in Kunhayammeds case supra had not been doubted or diluted or whittled down as it has been observed that the doctrine of merger and the right of review are concepts which are closely inter-linked. – No merger of decree takes place where a review application is simply dismissed (DSR Steel Private Limited vs. State of Rajasthan (2012 (6) SCC 782). It was opined by the Division Bench that the answer to the question as to whether the order of the Division Bench of the Court merged with the order of dismissal of SLP had to be answered in the negative, in view of the judgment of the three judges Bench of the Honble Supreme Court in Kunhayammed case supra and the question really was not whether the order of dismissal of the SLPs merged with the order of dismissal of the review petitions before the Honourable Supreme Court. – Court is thus faced with the situation, whether to follow one line of thought or the other and both emanating from the Honble Supreme Court. – The matter is not really of divergence of view qua two Judgements, but a plethora Judgments which opined one way or other which has also resulted in similar situation before this Court. – Court is thus of the view that it is not advisable to add to the Judgments of the High Court by seeking to pick and choose one view point, but consider it appropriate to await the result of the reference made in Khoday Distilleries Limited case supra. – Court is conscious of the fact that this may delay the final adjudication in the present case, but then that is a necessary consequence arising from not only divergence of opinion, but even the opinion of the Honble Supreme Court in Khoday Distilleries Limited case supra making a reference and requiring the crucial points to be answered, which has undoubtedly a ramification in the present case. – Court thus direct that the final adjudication on the maintainability issue in the present case would have to await the decision of Khoday Distilleries Limited case cited supra and the matter be listed after the opinion is available of the Honble Supreme Court in the reference arising from Khoday Distilleries case – Order Accordingly
The original petitioners in the writ proceedings claim to be large exporters of 'Sandalwood products' and participated in the auction conducted by the Department of Forest, Government of Tamil Nadu, and were the successful bidders. It is the case of the original petitioners that as per the conditions of auction, they had to pay the entire bid amount together with interest to the District Forest Officer, within 50 days from the date of confirmation of auction, and thereafter, within 75 days, the delivery of sandalwood was to be made to the auction purchaser. The petitioners claims that since the auction purchase was pursuant to an export order, there was no liability to pay sales tax and thus sought tax exemption from the concerned department. There was however insistence of the DFO to deposit the total amount within the stipulated time failing which the EMD would be forfeited. This consequence followed as the original petitioners did not deposit the amount. The original petitioners thus approached the court for quashing the forfeiture order.
2. The petitions were resisted on behalf of the Forest Department alleging that the original petitioners had paid only the EMD of 1/5th of the sale price and despite confirmation, balance was not paid and delivery not taken. A reminder was sent, followed by a show cause notice, but to no avail. The original petitioners were declared defaulters and the EMD was forfeited. Being part of the trade, it was contended that the original petitioners could not profess ignorance about the purchase terms and liabilities towards various tax/surcharge.
3. The original petitioners pleaded to the contrary, referring to the exemptions sought, documents submitted, all of which material is stated to be absent in the recital of the show cause notices.
4. Learned Single Judge was persuaded by the plea of orders passed in similar matters earlier, even though the plea of the department was that there were subsequent writ petitions filed by other individuals, which were dismissed as that coul2d not be a ground to overlook the Judgment of the Division Bench in appeal in respect of same issue. A direction was thus issued quashing the forfeiture orders with a direction to the original petitioners to keep the bank guarantee alive, the goods were directed to be released without claiming any demurrage or penalty and the original petitioners were directed to establish before the concerned authorities that they were entitled to the benefit of sales tax exemption and certain other consequential directions were also issued. However, in this process, the writ petitions stated to be filed in May, 1997, were finally allowed on 06.08.2004 and thus, seven years period had elapsed.
5. The Forest Department took up the matter in appeal to the Division Bench and the appeals came to be finally decided only on 25.10.2007 by dismissal orders. The Division Bench order noticed that while the order of the learned Single Judge had directed the department to release the goods on obtaining bank guarantee for the disputed amount and bank guarantee was also furnished, the goods were not still released.
6. The Forest Department aggrieved by the orders of the learned single Judge and the Division Bench, preferred a Special Leave Petition and while issuing notice, an order of status quo was granted in the Special Leave Petition on 07.03.2008.
7. The matter rested at the SLP stage in the Hon'ble Supreme Court for six years and it was disclosed that this so happened as it was awaiting the decision in some other matter. The SLP was listed on 24.11.2014, when it was dismissed after condoning delay.
8. The orders were still not implemented and the original petitioners took recourse to file contempt petitions. Despite succeeding before three successive forums, the original petitioners were not getting the fruits of success, and there was no satisfactory explanation before us at that time and thus notice was issued on 15.04.2015 by the Division
