SALES TAX OFFICER Vs. BYFORD MOTORS LIMITED

JUDGEMENT

(1.) This Appeal by the defendant Sales Tax Officer, Ward No. 47, Vikas Bhawan, New Delhi is directed against the order of the learned Single Judge dated 24th August,1993 in IAs 5606 and 6554/93 in Suit No. 1297/93. By virtue of the said order the learned Single Judge granted ad interim injunction in favour of plaintiff(respondent) against the recovery of sale-tax dues from the appellants for the years 1990-91 and 1991-92.The total amount of sales-tax involved in this case was said to come to Rs. 1,21,15,315. The operation of the impugned order was stayed by the learned Single Judge subject to the condition that the petitioner deposits a sum of Rs. 5 lacs in cash and furnishes security of immoveable properties in a sum of Rs. 20 lacs to the satisfaction of the appellate authority. The learned Single Judge also stated that the plaintiff would be at liberty to file an appeal before the Appellate Authority under the Local Act against the impugned assessment order during the pendency of this case.

(2.) The reliefs in the two lAs mentioned above were as follows: IA 5606/93 was filed by the plaintiff praying that the defendants 1 to 3 (namely Sales Tax Officer, New Delhi, Commissioner of Sales Tax, New Delhi and Lt. Governor, National Capital Union Territory of Delhi) be restrained from making any assessment on the basis of letters Annexures A & C or any other assessment in respect of sales which, according to the plaintiff-Com-pany, took place outside Delhi. In IA 6554/93 the plaintiff prayed for stay of recovery of any amount under the two demand notices both dated 10th June, 1993 for the years 1990-91 as well as 1991-92 respectively. The suit itself was filed on 27th May,1993 praying for a declaration that the transactions of sales set out in Schedule for the financial years 1990-91 and 1991-92 were valid sales effected in the respective towns of Sates/Union Territories of Haryana, Chandigarh and Daman and the said sales were effected outside the National Capital Territory of Delhi and were not liable to sales tax under Delhi Sales Tax Act, for a mandatory injunction to cancel the letters of the department dated 20.7.1992 and 24.9.1992 Annexure 'A' and 'C' and for directing defendants 1 to 3 not to act upon the same and not to make any assessment order in respect of transactions sought to be covered by the said letters and set out in the Schedule. It was alternatively prayed that this Court should come to the conclusion that the aforesaid sales were effected within the National Capital Territory of Delhi and not in the territories of State of Haryana, Chandigarh and Daman, and the Court be pleased to direct defendants 4 to 12 (the officials of the above said three States) by mandatory injunction to refund the amounts received by them and direct defendants 1 to 3 (Delhi Sales-tax authorities and the Delhi Administration) to recover the balance amount from purchasers of the said vehicles on the basis of assessment which might be made by them.

(3.) Subsequent to the filing of this suit, a demand notice filed as Annexure "E'_ in the IA 6556/93 was issued on 10th June,1993 for 47,67,242 and another demand notice filed as Annexure 'H' was issued for Rs. 26,78,013 on the same date. In view of the said demand notices, the petitioner moved for amendment of the plaint by filing IA 6556/94. Thereafter anapplication was filed for setting aside the assement orders and consequential reliefs. After that, the defendant/appellant filed a reply in IA 6554/93 stating that the suit was not maintainable and was barred by Section 67 of the Delhi Sales Tax Act,1975. The said IA was disposed of on 24th August, 1993 as stated earlier granting injunction subject to the conditions referred to above. The learned Single Judge dealing with the question whether the suit could be filed to set aside the assessment order, came to the conclusion that the suit lay where fundamental principles of judicial procedure have not been complied with. Of course what fundamental principles were violated was not stated. The learned Single Judge referred to the judgments of the Supreme Court in the case of M/s. Kamala Mills Ltd. v. State of Bombay, AIR 1965 SC 1942. Reference was also made to State of Kerala v. Ramaswami Iyer & Sons, 1966 (3) SCR 582. The learned Single Judge observed: