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Commercial Tax Officer, Bankura Charge and ors. Vs. Gourangalal Chatterjee - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKolkata High Court
Decided On
Judge
Reported in[1987]66STC394(Cal)
AppellantCommercial Tax Officer, Bankura Charge and ors.
RespondentGourangalal Chatterjee
Appellant AdvocateS.N. Dutta, Adv.
Respondent AdvocateD. Pal and ;A.K. Roy Chowdhury, Advs.
DispositionApplication allowed
Cases ReferredJavad Ahmed Abdul Hamid Pawala v. State of Maharashtra
Excerpt:
- .....march, 1984, till the disposal of the application, on condition that furnishing security by way of bank guarantee for rs. 50,000 be furnished within four quarters from 18th december, 1984.2. it was pointed out by mr. dutta, who appeared in support of this application that the writ petitioners carried mainly business inter alia of executing contracts and of purchasing goods in west bengal for executing the contracts, apart from carrying on their business of manufacturing stone chips and timber. after setting out the different issues as raised, it was pointed out by mr. dutta, that a notice of demand dated 6th october, 1983, for rs. 2,41,383.96 was served on the respondents before us, apart from a notice for a sum of rs. 9,999.80 which was also due from them. it was mr. dutta's contention.....
Judgment:

1. By this application filed in the concerned appeal being F.M.A.T. No. 61 of 1985, which was presented on 7th January, 1985, the appellants, who were respondents in the writ proceeding, are asking for stay of operation of the order as passed by Bhagabati Prasad Banerjee, J., on 18th December, 1984. By such order, the learned Judge has directed, after hearing the parties, the issue of an order restraining the appellants before us from taking any steps and/or proceeding for the purpose of levy, imposition and collection of purchase tax and from withholding the issue of declaration forms and giving any effect to or taking any steps whatsoever in pursuance of the orders of assessment and notices of demand for the periods from 28th November, 1980 to 31st March, 1981 and from 1st April, 1981 to 31st March, 1982 and from further proceeding for assessment upto the period four quarters ending 31st March, 1984, till the disposal of the application, on condition that furnishing security by way of bank guarantee for Rs. 50,000 be furnished within four quarters from 18th December, 1984.

2. It was pointed out by Mr. Dutta, who appeared in support of this application that the writ petitioners carried mainly business inter alia of executing contracts and of purchasing goods in West Bengal for executing the contracts, apart from carrying on their business of manufacturing stone chips and timber. After setting out the different issues as raised, it was pointed out by Mr. Dutta, that a notice of demand dated 6th October, 1983, for Rs. 2,41,383.96 was served on the respondents before us, apart from a notice for a sum of Rs. 9,999.80 which was also due from them. It was Mr. Dutta's contention that against the assessment and demand notices for the concerned periods, neither any action was taken nor any appeal was preferred. But on 18th December, 1984, the concerned writ petition was moved, when the learned Judge made the order, as indicated hereinbefore.

3. On a reference to the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. (1985) 1 SCC 260, it was Mr. Dutta's contentions that the learned Judge was not justified in the facts and circumstances of the case, to direct securing Rs. 50,000 and that too through a bank guarantee. In the said determination, the Honourable Supreme Court has deprecated the issue of such order as in this case on the basis of bank guarantee and it has also been indicated that when the said Court has repeatedly laid down principles of law, High Courts are bound to follow these principles under articles 141 and 144 of the Constitution of India. That apart, the Honourable Supreme Court has deprecated the practice of making interim orders or granting such orders for any commercial benefit to the writ petitioners on furnishing bank guarantee. There is no doubt or any dispute that we are bound under Article 141 of the Constitution of India, by such determination as made by the Honourable Supreme Court of India.

4. Dr. Pal, who appeared for the writ petitioners and opposing the application, has pointed out that since some cogent and wholesome points of law are involved in this proceeding, apart from the question of vires of the clause in the concerned contract and so also the legislative competence of the State Legislature in the matter and that being the point, the learned Judge, who issued the rule and interim order, was satisfied and on such satisfaction, he has appropriately used his discretion in the matter, by directing furnishing of bank guarantee in the matter as indicated hereinbefore. Dr. Pal also referred to an order dated 1st June, 1982, made by T.K. Basu, J., in the case of Hanuman Traders, where his Lordship after issuing the rule had directed that upon furnishing a bank guarantee by the petitioner, for the full claim of the customs authorities, the customs authorities will refund the money actually paid by the petitioners. He also pointed out that the said order was modified by the learned appeal Bench in F.M.A.T. No. 1617 of 1982 on 20th July, 1982 and thereby, the said learned appeal Bench presided over by M.M. Dutt, J., after considering the facts and circumstances of the case, observed that so long as the impugned notification is not declared as ultra vires, no interim order for refund should be made and in such circumstances the learned appeal court had set aside the interim order as made by T.K. Basu, J. and directed discharge of the bank guarantee. It was then pointed out, that from such determination, a special leave has been granted by the Honourable Supreme Court of India on 18th September, 1982, in Civil Appeal No. 3033 of 1982 and from the order of the Supreme Court, granting such leave, it will appear that the Bench consisting of O. Chinnappa Reddy and A.P. Sen, JJ., has directed restoration of the order as made by T.K. Basu, J., particulars whereof have been indicated hereinbefore. Thus, Dr. Pal wanted to establish that even the Supreme Court has accepted the position that bank guarantee in appropriate cases can be directed. It should be noted that by making the order as aforesaid, the Honourable Supreme Court had disposed of the appeal.

5. Thereafter, Dr. Pal referred to another order dated 13th April, 1982, passed by the Honourable Supreme Court of India in its Special Leave to Appeal (Crl.) No. 3794 of 1982 (M.R.F. Ltd. v. Union of India) and pointed out, that while granting special leave, their Lordships of the Supreme Court had directed an interim order to be issued in terms of prayer (b), which was to the following effect:

Grant ad interim ex parte stay of the operation of the order dated 24th June, 1981 of A.C. of Customs and Central Excise, Panaji-Goa and to permit the petitioner to clear the tyres manufactured in their gas factory upon payment of duty of excise at the reduced rate under Notification No. 107/81 on a provisional basis upon the petitioner furnishing the requisite bond in form B-16 which is already furnished and in force.

6. On the basis of such determination, Dr. Pal claimed and contended that the basis of the Dunlop's case (1985) 1 SCC 260 cannot be claimed to be sacrosanct and correct. It should be noted here that the two orders which were shown to us by Dr. Pal have not decided the cases on merits and there was no reason given, but reasons are available in the Dunlop's case (1985) 1 SCC 260. It should further be noted that Dr. Pal pointed out that the later order by the Supreme Court, as indicated hereinbefore was made by three Honourable Judges and the Bench was composed of the Honourable Mr. Justice S. Murtaza Fazal Ali, the Honourable Mr. Justice A. Varadarajan and the Honourable Mr. Justice Balakrishna Eradi. We have referred to the number of the Judges of two Benches of the Supreme Court in the two orders as indicated hereinbefore, for the purpose of answering another point which was raised by Dr. Pal, on a reference to the case of Javad Ahmed Abdul Hamid Pawala v. State of Maharashtra AIR 1985 SC 231, which was a Bench of two Judges, composed of O. Chinnappa Reddy and E.S. Venkata-ramiah, JJ. and their Lordships have observed that the Supreme Court sits in a Division Bench of two or three Honourable Judges for the sake of convenience and it may be inappropriate for a Division Bench of three, to purport to overrule the decision of a Division Bench of two Judges. It may be otherwise, where a Full Bench or a Constitution Bench does so. In fact on a reference to the above observations, Dr. Pal claimed that the Honourable Supreme Court could not thus have overruled the observations made in the two orders as indicated hereinbefore by their determination in the Dunlop's case (1985) 1 SCC 260 and according to him, unfortunately the learned Judges in the Dunlop's case (1985) 1 SCC 260 have not at all considered the earlier determinations of the Supreme Court.

7. We are of the view that from the Bar, such criticism as made by Dr. Pal, is possible, but so far as we are concerned, determination of the Supreme Court on points as decided, as the same is the law which binds us under Article 141 of the Constitution of India. It should be also noted that the other two orders as placed by Dr. Pal were admittedly prior to the order as made in the Dunlop's case (1985) 1 SCC 260. Thus, even in spite of the criticism as made by Dr. Pal, we fail to agree with his submissions that we are not now bound by the determinations as made by the Supreme Court in the Dunlop's case (1985) 1 SCC 260.

8. It is true that in the Dunlop's case (1985) 1 SCC 260, the Honourable Supreme Court of India has not said anything which has taken away the discretion of the court in the matter of granting interim order, but their Lordships have in fact stated that since a Government cannot be run on the basis of a bank guarantee and that too following their observations in the Siliguri Municipality's case (1984) 2 SCC 436, the High Courts should try to avoid the issue of bank guarantee. Here in the instant case, the learned trial Judge, while issuing the rule, was admittedly satisfied on the prima facie case, otherwise he would not have issued a rule and perhaps he was also satisfied about the points of law as involved and as such, instead of the whole amount to be secured, he has directed some security to be furnished by way of a bank guarantee. Since we are bound by the observations in the Dunlop's case (1985) 1 SCC 260, we set aside that part of the learned Judge's order, whereby he has directed securing of the amount through the bank guarantee and instead, we order that the petitioner should furnish cash security for the amount, as indicated above. The application is allowed to the above extent. No order as to costs. Such security, as is directed to be furnished, be furnished by three weeks. Further, we keep it on record, that in case the writ petitioner succeeds, the respondents should refund the amount which will be deposited with them, now, with all due legal interest.


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