STATE OF TAMIL NADU Vs. LAVANYA ENTERPRISES

JUDGEMENT

(1.) HEARD Mr. Rajasekar, Government Advocate for the appellants and Mr. Natarajan for the Respondent.

(2.) THE present appeal is filed by the State of Tamil Nadu and the District Forest Officer against the order dated 19. 4. 2005 passed by the learned single Judge of this Court in W. P. No. 10971 of 2000. Such writ petition was filed by the present Respondent for issuing writ of Certiorarified Mandamus for quashing the order dated 27. 1. 2000 in Proceeding No. Proc. L. 1049/99 and further directing the second respondent, the District Forest Officer to release the sandalwood purchased by the present respondent in the auction dated 18. 12. 1998 without demanding demurrage and penal interest and without insisting on payment on sales tax.

(3.) THE present Appellant No. 2 had issued notification dated 27. 10. 1998 notifying about the auction of various classes of sandalwood. The present Respondent who is an exporter of sandalwood products, participated in such auction held on 18. 12. 1998 and was the successful highest bidder for a total quantity of 7 MTs for a sum of Rs. 34,27,600/ -. A sum of Rs. 1 lakh was deposited as Earnest Money Deposit and a further sum of Rs. 7 lakhs, which was otherwise due from the Forest Department to the present respondent, was adjusted. The present respondent asserted in the writ petition that he had participated in the auction pursuant to 'confirmed export order' placed with him. On 2. 2. 1999, the present second appellant, while intimating about the confirmation of the bid, demanded that the present respondent is required to pay a sum of Rs. 2,74,894/- towards the sales tax dues in addition to the amount payable towards the auction. Immediately thereafter, on 6. 2. 1999, the present respondent intimated to the Appellant No. 2 that since the transaction was in course of export, the Department should not insist on payment of sales tax in view of Section 5 (3) of the Central Sales Tax Act. Subsequently the respondent filed W. P. Nos. 4574 and 4575 of 1999 for quashing the order dated 2. 2. 1999 so far as it related to the payment of sales tax and to direct the Department to accept Form-H after export is over without insisting on payment of sales tax and surcharge thereon. The petition for interim direction numbered as WPMP. No. 6590 of 1999 in W. P. No. 4575 of 1999 having been dismissed on 28. 4. 1999, the respondent filed W. A. No. 1156 of 1999. Such appeal was disposed of on 2. 8. 1999 directing the present second appellant to release the sandalwood upon deposit of 25% of the sales tax demand and furnishing bank guarantee for the balance amount. Such order of the Division Bench was communicated by the respondent to the second appellant on 19. 8. 1999. Thereafter, on 31. 8. 1999, a communication was received from the second appellant wherein the present respondent was called upon to pay the entire sale amount, demurrage charges, penal interest besides sales tax amount. On 8. 9. 1999, the writ petition was dismissed by the learned single Judge by observing that the Department should consider all the materials placed before it and to consider the question of exemption under Section 5 (3) of the Central Sales Tax Act. After several correspondence, particularly by the respondent indicating about the various orders as well as referring to the export orders, the Department communicated on 23. 11. 1999 that the present respondent was required to clear all dues including demurrage and penal interest. It was also indicated by the Department that a bank guarantee should be furnished if the sandalwood would be procured for export otherwise the full sales tax amount should be paid It was further indicated that if such direction was not complied within 15 days, action would be taken to forfeit the amount and resale the sandalwood. The Department by way of reply to the letter of the respondent dated 2. 12. 1999, stated that as per the judgment in W. P. No. 11123 of 12999 dated 2. 3. 1999, sales tax at 8% was liable to be paid. Ultimately, on 29. 1. 2000, an order of forfeiture of the amount deposited by the present respondent was passed.