M S. Rajasthan Industries, Vs State of Raj. & Ors. on 21 January, 2011
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Rajasthan High Court - Jodhpur
Rajasthan High Court - Jodhpur
M/S. Rajasthan Industries, vs State Of Raj. & Ors. on 21 January, 2011
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1. D.B.Civil Writ Petition No.10230/2010
2. D.B.Civil Writ Petition No.4808/2008
3. D.B.Civil Writ Petition No.5416/2008
4. D.B.Civil Writ Petition No.6425/2008
5. D.B.Civil Writ Petition No.240/2009
6. D.B.Civil Writ Petition No.2627/2009
7. D.B.Civil Writ Petition No.2690/2009
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51. D.B.Civil Writ Petition No.7301/2009
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103. D.B.Civil Writ Petition No.781/2010
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129. D.B.Civil Writ Petition No.1774/2010
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155. D.B.Civil Writ Petition No.2587/2010
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397. D.B.Civil Writ Petition No.9087/2010
398. D.B.Civil Writ Petition No.9516/2010
399. D.B.Civil Writ Petition No.9590/2010
400. D.B.Civil Writ Petition No.10020/2010
401. D.B.Civil Writ Petition No.10021/2010
402. D.B.Civil Writ Petition No.10026/2010
21.1.2011
Hon'ble the Chief Justice Mr.Arun Mishra Hon'ble Mr.Justice Prakash Tatia
Mr.Anjay Kothari )
Mr.Vikas Balia )
Mr.Manish Shishodia )
Mr.Pankaj Kumar Bohra )
Mr.C.S.Kotwani )
Mr.Dinesh Mehta )
Mr.Yogesh Sharma )
Mr.Dinesh Kumar Sharma )
8
Mr.Sanjeev Johari )
M/S. Rajasthan Industries, vs State Of Raj. & Ors. on 21 January, 2011
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Mr.Vijay Bishnoi )
Mr.T.S.Champawat )
Mr.Dinesh Kumar Joshi )
Mr.Ramit Mehta )
Mr.Abdul Aziz Khan )
Mr.Sachin Acharya )
Mr.Sunil Bhandari )
Mr.S.S.Jodha )
Mr.Anil Bhansali )
Mr.Lalit Pareek )
Mr.Kunal Paliwal )
Mr.Javed Moyal )
Mr.Digvijay Singh )
Mr.J.P.Arora )
Ms.Teena Arora )
Mr.Chetan Rajpurohit )
Mr.I.R.Choudhary )
Mr.R.L.Jangid, AAG )
Mr.M.S.Singhvi )
Mr.V.K.Mathur )
Mr.Sunil Beniwal ) for the respective parties.
Heard learned counsel for the parties.
In similar matters being D.B.Civil Writ
Petition No.13765/2010; M/s Ramgopal Satyanarain
V/s the State of Rajasthan and ors. & 264 other
connected cases, the following interim order was
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passed by the Jaipur Bench of this Court on
1.12.2010:-
"These writ petitions have been filed by the petitioners challenging the validity of the Rajasthan Tax of Entry
of Goods into Local Areas Act, 1999 and the Rajasthan Tax on Entry of Goods into Local Areas Rules, 1999
as being ultra vires and further declaring the order of assessment and the consequent demand raised on the
basis of the same to be 9
invalid.
Since there are conflicting judgments of the Division Benches of this court regarding the validity of the Act.
Vide judgment dated 31.05.2000, a Division Bench of this court in case of Godfrey Philips Vs. State of
Rajasthan & Ors. held the act to be valid, whereas in the case of M/s. Dinesh Pouches Ltd. Vs. State of
Rajasthan & Ors. decided on 21.08.2007 the act was found to be ultra vires and in a subsequent judgment of a
Division Bench in case of Godfrey Philips Vs. State of Rajasthan & Ors. decided on 18.01.2008 the act was
again found to be valid. As such this bunch of petitions has been filed challenging the order of assessment as
well as the demand and in some cases for staying the proceedings of the assessment as well.
The matter also came up before the
Principal Seat of this court at Jodhpur and in view of the conflicting decisions a reference has been made by
the Division Bench to the Hon'ble Chief Justice for referring the matter to the Larger Bench in the case of
D.B. Civil Writ Petition No.739/2004 Laxmi Cement Vs. State of Rajasthan & Ors. vide order dated
12.09.2007.
It may also be stated here that
against the decision of the Division Bench of this court dated 21.08.2007 declaring the act to be ultra vires in
case of M/s. Dinesh Pouches Ltd. Vs. State of Rajasthan & Ors. the matter is pending before the Hon'bleSupreme Court and has been referred to a bench of seven Judges.
It has also been brought to the
notice of the court by Mr. Sudhir Gupta, counsel appearing for M/s Binani Cement Ltd. that a transfer petition
was filed before the Hon'ble Supreme Court being Transfer Petition (Civil) No.29/2008 Binani Cement Ltd.
Vs. State of Rajasthan & Ors. Vide order dated 25.02.2008, the said petition was disposed of by the Hon'ble
Supreme Court with following directions:
"Heard.
This is an application for transfer of W.P. (C) No.3630/2006. The said writ petition has been referred to a
larger Bench. This court is examining the correctness of the judgment of the High Court which is assailed in
SLP(C) No.16351/2007. The High Court shall take up W.P. (C) No.3630/2006 after the disposal of the
aforesaid special leave petition by this Court.
10
The transfer petition is disposed of accordingly."
In view of above, there is an
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arguable question which is involved. Accordingly, all these petitions stand admitted and the learned Advocate
General has put in appearance on behalf of the respondents.
So far as the interim relief is
concerned, the matter came up before the court on two earlier occasions on 10.11.2010 and was adjourned at
the request of the learned counsel for the parties. Subsequently, the matter again came up before the Bench on
26.11.2010 for consideration of admission as well as on stay and it was pointed out by the learned counsel forthe petitioner that this court had earlier granted stay of the recovery in pursuance of the order of the
assessment and the demand notice. It was pointed out by the Bench that there had also been another set of
orders in which assesses had been directed to deposit 50% of the amount with stipulation that the remaining
50% amount shall remain stayed on furnishing a solvent security. It was, however, also observed in these
orders that in case the petition succeeds the State would refund the amount so deposited under the orders of
the court with interest @ 12% per annum.
There were, therefore, two different sets of interim orders. In these circumstances the Bench presided over by
the Hon'ble Chief Justice directed that all matters regarding entry tax be listed before the court on 01.12.2010
so that uniformity in interim orders could be maintained. Accordingly, all the matters have been listed today
before the bench for consideration as to what interim orders should be passed in all these matters. The variousorders which have been passed by different Benches of this court may be quoted for convenience. In D.B.
Civil Writ Petition No.1083/2010 on 08.02.2010 the court passed following exparte orders:
"Admit. Issue notice.
We have been informed by the learned counsel for the petitioner that though the matter in question has been
referred to the Larger Bench, however, identical matter is to be heard by seven Judges' Bench of Apex Court.
Prima facie we feel that there is a case of interim relief.
Accordingly, in the meanwhile the recovery from the petitioner shall remain 11
stayed.
Connect with D.B. Civil Writ Petition No.2695/2009."
Likewise in another D.B. Civil Writ Petition No.9772/2010 decided on 26.07.2010 on being informed that the
Division Bench of this court in case of M/s. Dinesh Pouches Ltd. Vs. State of Rajasthan & Ors. decided on
21.08.2007 has allowed the writ petition and held the act to be ultra vires. This court directed that meanwhile,
the tax assessed against the petitioner as per the assessment order shall not be recovered from the petitioner in
case the petitioner submits a solvent security for the aforesaid amount to the satisfaction of the Assessing
Authority within a week from today.
Apart from the aforesaid two set of orders, in the case of D.B. Civil Writ Petition No.8692/2010 a Division
Bench of this court passed order as follows: "Issue notice to the respondents.
Mr. R.P. Singh accepts notice on behalf of the State.
It would be open to the respondents to make the assessment. However, no recovery be made till next date.
Counsel for the appellant is directed to supply a copy of this petition along with its annexures to counsel for
the State during the course of the day."
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In D.B. Civil Writ Petition No.13198/2010 Division Bench of this court to which one of us (Hon'ble Mr.
Dalip Singh,J.) was a member after hearing the counsel for the petitioner and the learned Advocate General
for the State passed following order: "Heard on the stay application.
In the facts and circumstances of the case, we direct that the recovery against the petitioner in pursuance of the
assessment order, Annexure-8 and demand notice, Annexure-9 shall remain stayed on the condition that the
petitioner deposits 50% of the assessed amount of tax with the concerned authorities within a period of four
weeks from today.
It is, however, made clear that in case the writ petition succeeds, the petitioner would be entitled to the refund
of the said amount, so deposited with interest @ 12% per annum.
The petitioner shall submit solvent surety for the balance 50% of the amount of the tax to the satisfaction of
the assessing authority.
The stay application stands disposed of."
In another set of petitions where
the petitioners had approached this court 12
even prior to passing of the assessment order. This court in D.B. Civil Writ Petition No.13198/2010 had
passed following orders on 09.11.2010:
"Heard on the stay application.
It has been submitted by the learned counsel that at present the assessment has not been made.
In view of the above, it is directed that the respondents may proceed to finalize the assessment in respect of
the petitioner- assessee. In case, the amount is found due against the petitioner in terms of the said assessment,the petitioner shall be liable to deposit 50% of the said amount after the assessment order and demand notice
within a period of four weeks in pursuance on the same. The petitioner shall submit solvent surety in respect
of the remaining 50% of the amount.
It is made clear that in case the writ petition itself succeeds, the petitioner would be entitled to the refund of
the amount, so deposited with interest @ 12% per annum.
The stay application stands disposed of."
In view of the aforesaid position
where there were two sets of interim orders, one granting absolute stay and the other requires 50% of the
amount of the assessed tax to be deposited, the Bench while directing the cases to be listed on 16.11.2010 has
directed for listing all the matters together so that uniformity should be maintained in all cases.
We are aware of the fact that in
some cases the stay applications have been finally heard and in some cases even application filed by the State
for vacation/modification of interim order has been disposed of. Nonetheless it is desirable that in such
matters there should be uniformity and in future also if any petition is filed the same orders must be passed,
therefore, the aforesaid bunch of cases have been listed together and all counsel appearing on behalf of the
petitioners in these cases have been heard along with the learned Advocate General for the State-respondent.
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Learned counsel for the parties do
not dispute the fact that it is a peculiar case where the validity of the Act in one set of petitions has been
upheld vide judgment dated 31.05.2000 and 18.01.2008 in case of Godrfrey Philips Vs. State of Rajasthan &
Ors. and in another judgment of the Division Bench of this court in the case of M/s. Dinesh Pouches Ltd. Vs.
State of Rajasthan & Ors. decided on 21.08.2007 the act has been 13
held to be ultra vires.
The position which further emerges
is that vide judgment dated 31.05.2000 the Act was found to be valid but vide judgment dated 21.08.2007 it
was held to be invalid and again vide judgment dated 18.01.2008 it has been found to be valid. The matter is
pending before the Hon'ble Supreme Court against the judgment dated 21.08.2007 in M/s. Dinesh Pouches's
case to be heard by a bench of seven Judges. The Hon'ble Supreme Court has already directed that the High
Court shall not hear the matter till the matter is heard by the Hon'ble Supreme Court. The interim order which
has been
passed by the Hon'ble Supreme Court in M/s. Dinesh Pouches' case in the S.L.P. against the judgment dated21.08.2007 is as follows: "There shall be an interim stay of the direction of the High Court so far as it relates
to refund."
In view of above it is clear that
the direction so far as the refund of the amount of tax which has been deposited with the State by the assessee
which had been ordered by the High Court while declaring the Act to be ultra vires, that has been stayed by
the Hon'ble Supreme Court.
With the view to balance the equity while passing interim orders and more particularly in fiscal matters it is
necessary that the interest of the assessees as well as that of the Revenue may be balanced equally. Grant ofabsolute stay order staying the recovery on furnishing of bank guarantees does not serve either the parties or
the State. Even assuming that there is a prima facie case in favour of the assessee-petitioners the two other
relevant considerations of balance of convenience and irreparable loss must also be taken into account. In that
view of the matter it is directed that recovery of tax in pursuance of assessment orders and demand notices
where they have been issued in the case of such petitioners shall remain stayed on the condition of the
petitioners depositing 50% of the assessed tax excluding any amount of penalty and/or interest imposed by the
assessing authority. The deposit be made within a period of six weeks from today. It is further made clear that
for
the balance amount of 50% of tax and the amount of penalty or interest imposed by the assessing authority in
the assessment order is concerned, the assessees shall furnish a solvent security or the security as provided
under the Act for the said amount within a period of six weeks to the satisfaction of the assessing authority.
Both these 14
conditions of deposit and furnishing security shall be complied with within six weeks, failing which this order
shall stand vacated automatically.
In the event if the writ petition
succeeds the petitioner shall be entitled to refund of the amount of the tax deposited by the assessees or where
the entire amount has been deposited, the entire amount with interest @ 12% per annum and in the event if the
petition fails, the assessees shall be liable to pay the balance amount of tax plus penalty with interest @ 12%
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per annum and where assessments have not been made so far, the respondents may proceed to finalise the
same and the assessment orders/demand notices being issued, the petitioners' case shall be covered by the
aforesaid order.
The stay application in all the
writ petitions accordingly stand disposed of. Earlier orders passed shall stand modified in the light of this
order.
Let a photostat copy of this order be placed in each file."
These matters are similar, but different
orders have been passed. There cannot be any
inconsistency in passing the orders in similar
matters.
The above interim order passed by the Jaipur
Bench has not been interfered by the Supreme Court
in SLP No.539/2011 wherein the following order was
passed by the Supreme Court on 12.1.2011:-
"Taken on board.
Having heard learned Senior Counsel for the petitioner, we do not find any ground to interfere with theimpugned order.
Accordingly, the Special Leave Petition is dismissed. However, the time granted to the petitioner in the
impugned order for compliance is extended by a further period of two weeks from today."
15
In view of the aforesaid interim order passed
by the Jaipur Bench, the interim orders passed in
these matters deserve to be modified and
accordingly, we modify the interim orders passed in
these matters and pass the same interim orders as
passed by Jaipur Bench of this Court in D.B.Civil
Writ Petition No.13765/2010; M/s Ramgopal
Satyanarain V/s the State of Rajasthan and ors. &
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264 other connected case (supra),which shall
continue during the pendency of the writ petitions.
The stay applications stand disposed of
accordingly.
A photo stat copy of the order be placed in
each of the aforesaid files.
(Prakash Tatia)J. (Arun Mishra)C.J.
NK
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