HAJI ABDUL RAHMAN HAJI ABDULLA Vs. THE UNION OF INDIA (UOI) REPRESENTED BY SECRETARY, MINISTRY OF FOOD AND AGRICULTURE, DEPARTMENT OF FOOD AND ANR.

JUDGEMENT

(1.) THIS is a Plaintiff 's appeal against the reversing decree of the learned Additional Subordinate Judge of Berhampur in a suit for money. The Plaintiff, a registered firm, carrying on business at Berhampur, supplied 1529.5 quintals of rice to the Assistant Director (Food), Government of India, between 9 -1 -1965 and 29 -3 -1965 under the Orissa Procurement (Levy) Order, 1964. Payment for the aforesaid supplies was effected on 5 -4 -1965. The Plaintiff is a registered dealer both under the Orissa Sales Tax Act as also the Central Sales Tax Act. Sales tax on these supplies had not been charged by the Plaintiff or paid by the Defendants. The Defendants were disputing liability of sales tax on the footing that applies effected under the Orissa Procurement (Levy) Order, 1964, did not constitute sale. The Plaintiff had been demanding the necessary certificate that if tax would at all be payable, the Defendants would undertake to pay the same. On 1 -8 -1965, the Assistant Director (Food) issued the requisite certificate (Ext. 43). On 21.3 -1906, the Plaintiff was assessed to sales tax on these transactions the Sales Tax Officer having overruled the objection of the Plaintiff that the transactions were not (sic) to sales tax. On 26 -4 -1966, the Plaintiff deposited the tax demand and on 3 -7 -1968, finding no other way to recover the amount from the Defendants, filed the suit.

(2.) THE Defendants took the stand that the Plaintiff should have contested the levy of sales tax by going up in appeal under the statute and should not have agreed to satisfy the demand. Sales tax is payable by the seller and not by the buyer and in the absence of a contract between the procuring agent (Plaintiff) and the Defendants to the contrary, it is an incidence which had to be borne by the Plaintiff only. The Defendants had no liability for the same. The certificate issued on 1 -8 -1965 by the Assistant Director (Food) was not valid and binding on the Union of India as that authority had not been duly authorised by the President of India to enter into any contract on behalf of the Union of India as provided under Article 299 of the Constitution.

(3.) THE Defendants in appeal challenged their liability and disputed the conclusions of the learned trial Judge. The appellate Court having agreed with the contentions of the Defendants reversed the decree and dismissed the suit. This reversing decree of the learned appellate Judge is assailed in second appeal.