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Delhi District Court

M/S Brindco Sales Private Limited vs A1 Welfare Club on 26 August, 2020

                     IN THE COURT OF DHEERAJ MOR,
             SENIOR CIVIL JUDGE­CUM­RENT CONTROLLER,
            SOUTH EAST DISTRICT, SAKET COURT, NEW DELHI
Civil Suit no: 569/19
CNR No. DLSE030008012019
M/S BRINDCO SALES PRIVATE LIMITED
REGD OFFICE:
S­53, OKHLA INDUSTRIAL AREA,
PHASE­II, NEW DELHI­110020.                                                   ....... PLAINTIFF
                      Versus
A1 WELFARE CLUB
THROUGH MR. BALACHANDRAN M
SECRETRY OF A1 WELFARE CLUB
8­B, ARINAGAR, ANNA NAGAR, WEST MAIN ROAD
MADURAI, TAMIL NADU­625020                                                    .....DEFENDANT

               Date of Institution                                   : 30.03.2019
               Date on which judgment was reserved                   : 19.08.2020
               Date of pronouncing judgment                          : 26.08.2020

     SUIT FOR RECOVERY OF RS. 72,556/­ ALONG WITH PENDENTE LITE
           INTEREST @ 18% PER ANNUM AND FUTURE INTEREST
                          @ 24% PER ANNUM

                          E X­ P A R T E        JUDGMENT

1.

Briefly stated, the case of the plaintiff company is that it is a private limited company incorporated under the Companies Act, 1956 and is India's leading importer and distributor of Alcoholic Beverages with a PAN India presence. It is averred that Sh. Kishore Chandra Sahoo is duly authorized vide Board Resolution dated 25.10.2018 by the Board of Directors of the plaintiff company to institute the present suit.

2. It is averred that the defendant approached the plaintiff at its office situated at S­53, Okhla Industrial Area, Phase­II, New Delhi­110020 in the year 2015 with a desire to place an order for the supply of alcoholic beverages and CS NO.569/19 M/S BRINDCO SALES PRIVATE LIMITED VS M/S A1 WELFARE CLUB Page 1 of 5 on the basis of its representation, the plaintiff company agreed to sell alcoholic beverages to it. It is averred that it was agreed that the sold alcoholic beverages shall be supplied/transported to the hotel of the defendant at Madurai, Tamil Nadu. It is averred that it was also agreed between the parties that in the course of interstate sales, the plaintiff would be entitled to receive "C" Forms from the defendant so as to allow it to take exemption on tax as legally permissible under the law of the land. It is averred that as per Schedule IV of the DVAT Act, sales tax @ 20% is levied on the sale of the goods of the plaintiff. However, if the buyer supplies C­Form, against the goods so purchased, then tax is levied as Central Sales Tax @ 2%. However, in case the buyer fails to supply the requisite C­Form, he shall be liable to pay the differential 18% tax on the value of the goods purchased.

3. In the present case, the defendant had purchased alcoholic beverages from the plaintiff in the financial year 2015­16 against following bills/invoices:­ :

(i) No. OS/15/01885 dated 18.12.2015 for Rs. 69,176.85/­ with CST charged @ 2%, i.e. Rs. 1,383.54/­, and

(ii) No. OS/15/01886 dated 18.12.2015 for Rs. 50,303.82/­ with CST charged @ 2%, i.e. Rs. 1,006.08/­ It is further averred that the defendant had also purchased alcohol from the plaintiff in the financial year 2016­17 against following bills/Invoices:­

(i) No. OS/16/01533 dated 31.10.2016 for Rs.59,296.08 with CST charged @ 2%, i.e. Rs. 1,185.92/­, and

(ii) No. OS/16/01534 dated 31.10.2016 for Rs. 1,15,919.60/­ with CST charged @ 2%, i.e. Rs. 2,318.40/­.

4. It is averred that the total VAT chargeable under above invoice calculated as per Schedule IV of Delhi Value Added Tax Act, 2002 @ 20% of billed amount is Rs. 58,939.94/­. However, on the promise of the defendant to supply CS NO.569/19 M/S BRINDCO SALES PRIVATE LIMITED VS M/S A1 WELFARE CLUB Page 2 of 5 the C­Form, the plaintiff did not charge differential tax of Rs. 53,046/­ from the defendant. However, the defendant failed to supply the required C­Form to the plaintiff for the financial year 2015­16 and 2016­ 2017 which has rendered the plaintiff to suffer additional tax liability @ 18% on the total aforementioned billed amount i.e. Rs. 53,046/­, (Full VAT i.e. Rs. 58,939.94 - CST paid i.e. Rs. 5,893.94) with interest @ 15% by the VAT department, New Delhi. It is averred that despite repeated requests, reminders, calls and legal notice dated 28th01.2019, for making payment of the outstanding amount including interest or to provide required C­Forms, defendant failed to comply the same.

5. It is further averred that on account of default, the defendant is liable to pay interest @ 15% i.e. 9,537/­ on amount of Rs.21,507/­ (i.e. unpaid tax for the year 2015­2016) from 01.04.2016 till the date of payment i.e. 15.03.2019 for the invoices for the financial year 2015­16. It is further averred that on account of default, the defendant is liable to pay interest @ 15% i.e. Rs. 9,255/­ (i.e. unpaid tax for the year 2016­2017) on amount of Rs. 31,539/­ from 01.04.2017 till the date of payment i.e. 15.03.2019 for the invoices for the financial year 2016­

17. Thus, on the basis of the said assertion, the plaintiff has claimed a total amount of Rs.72,556.38/­ till 15.03.2019/­, after adding the said principal amount and interest thereupon. In addition to the said amount, the plaintiff has claimed pendente lite @ 18% and future interest @ 24% on the said amount. Hence, the present suit.

6. Summons for the settlement of issues were issued to the defendant. However, despite service, no one appeared on its behalf before the Court. Accordingly, it was proceeded ex­parte vide order dated 09.05.2019. Then the case was fixed for ex­parte plaintiff evidence.

7. In ex­parte plaintiff evidence, the plaintiff has examined only one witness i.e. its AR Sh. Kishore Chandra Sahoo as PW­1. He has tendered his evidence by way of affidavit Ex. PW1/1. He has reiterated the contents of the plaint on oath. Therefore, they are not reproduced herein for the sake of brevity and to avoid repetition. He has relied upon following documents:­

a) Board Resolution of the company dated 25.10.2018 is Ex. PW1/A;

b) Certificate of Incorporation of company with ROC Delhi duly attested by Company Secretary of company is Ex. PW1/B;

c) TIN/Central Sale Tax No. of defendant is Ex. PW1/C;

d) Invoices Ex. PW1/D1 to Ex. PW1/D4;

e) Legal notice dated 28.01.2019 is Ex. PW1/E;

f) Postal and courier receipts qua legal notice Ex. PW1/F and Ex. PW1/G

g) Notice dated 21.12.2018 of department of trades and taxes is Ex. PW1/H.

8. Vide order dated 09.05.2019, ex­parte plaintiff evidence was closed.

9. Final arguments are heard. Case file is carefully perused.

10. As per plaintiff, the Department of Trade and Taxes, Government of NCT of Delhi has issued a notice dated 21.12.2018 Ex. PW1/H for the scrutiny of business for the period 2015­2016 under the provision of DVAT Act, 2004. It is the case of the plaintiff that the sale of liquor to the defendant vide invoices Ex.PW1/D1 to Ex. PW1/D4 were an interstate transaction during 2015­2016 and 2016­2017 and the defendant has not supplied the requisite and promised C­Form for the said purchase. As per plaintiff, it is required to pay penalty to the said department for the default of the defendant in non­furnishing of C­forms for the said sale transactions. Admittedly, the plaintiff has not yet paid even a single penny to the said department in response to the said show cause notice dated 21.12.2018 Ex. PW1/H. Further, the said show cause notice can be withdrawn by the department in case the plaintiff furnishes the requisite C­forms after their receipt from the defendant. Therefore, the payment towards the demanded tax in response to the CS NO.569/19 M/S BRINDCO SALES PRIVATE LIMITED VS M/S A1 WELFARE CLUB Page 4 of 5 said notice is not an absolute demand as it is contingent on the non­furnishing of the C­forms. Hence, the claim of the plaintiff in this case is pre­mature as in absence of any payment made by the plaintiff to the said department, the present suit is without any cause of action. The plaintiff ought to have instituted a suit for mandatory injunction against the defendant thereby seeking directions to the defendant to issue C­form for the said transaction instead of the present suit for recovery. The cause of action for recovery of the amount against the defendant shall only commence after the penalty, if any, is quantified and ascertained qua the present transaction in relation to the alleged default committed by the defendant on the disposal of objections of the plaintiff against the said show cause notice Ex. PW1/H by the tax department and on the payment of the said penalty by the plaintiff to the tax department. Hence, in absence of accrual of any cause of action to institute the present suit, the present suit is bad for being pre­mature and therefore, it deserves to be dismissed. Accordingly, the present suit is dismissed. No orders as to cost.

11. Decree sheet be drawn accordingly.

12. File be consigned to Record Room after due compliance.

ANNOUNCED IN THE OPEN COURT ON 26.08.2020 (DHEERAJ MOR) Senior Civil Judge­cum­ Rent Controller South East District, Saket Court, New Delhi.

This judgment contains 05 pages and each page is signed by me.

(DHEERAJ MOR) Senior Civil Judge­cum­ Rent Controller South East District, Saket Court, New Delhi.