Karnataka High Court
M/S. Ghodawat Industries (India) Pvt ... vs Additional Chief Secretary And on 18 June, 2014
Author: K. Bhakthavatsala
Bench: K. Bhakthavatsala
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 18TH DAY OF JUNE, 2014
PRESENT
THE HON'BLE DR. JUSTICE K. BHAKTHAVATSALA
AND
THE HON'BLE MR. JUSTICE PRADEEP D.WAINGANKAR
WRIT APPEAL Nos.100432/2014 &
100433-435/2014 (T-EYT)
BETWEEN:
M/S. GHODAWAT INDUSTRIES (INDIA) PVT., LTD.,
NO. 5 & 6 RAGHAVENDRA COLONY,
KHASBAG, BELGAUM-590 004.
REPRESENTED BY ITS LEGAL DIRECTOR,
SRI. RAGHAVENDRA VISHNUTHIRTH BELGAUMKAR,
AGE: 52 YEARS,
S/O. LATE SRI VISHNUTHIRTH VASUDEV BELGAUMKAR.
... APPELLANT
(BY SRI.K.G.RAGHAVAN, SR. ADV. FOR
SRI PRASHANT F.GOWDAR AND
SRI VEERESH BUDIHAL, ADVS.)
AND:
1. ADDITIONAL CHIEF SECRETARY AND
PRINCIPAL SECRETARY TO GOVERNMENT,
FINANCE DEPARTMENT,
GOVERNMENT OF KARNATAKA
VIDHANA SOUDHA, BANGALORE-560 001.
2. COMMISSIONER OF COMMERCIAL TAXES,
VANIJYA THERIGE KARYALAYA,
GANDHINAGAR, BANGALORE-560 009.
2
3. JOINT COMMISSIONER OF COMMERCIAL TAXES/
DVO (ADMINISTRATION),
BELGAUM DIVISION, CLUB ROAD,
BELGAUM-590 001.
4. COMMERCIAL TAX OFFICER (AUDIT)-3,
SUMOULYA SOUDHA, CLUB ROAD,
BELGAUM-590 001. ... RESPONDENTS
(BY SRI.H.KANTHARAJA, ADDL.
ADVOCATE GENERAL FOR THE RESPDTS)
THESE WRIT APPEALS ARE FILED U/S.4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO, SET ASIDE
THE ORDER DATED 22.05.2014 PASSED BY THE LEARNED
SINGLE JUDGE VACATING THE INTERIM RELIEF GRANTED BY
THE LEARNED SINGLE JUDGE ON 01.04.2014 AND EXTENDED
TILL FURTHER ORDERS ON 15.04.2014 IN THE WRIT PETITION
NO.104278-281/2014 AND FURTHER BE PLEASED TO RESTORE
INTERIM RELIEF GRANTED BY THE LEARNED SINGLE JUDGE ON
01.04.2014 AND EXTENDED TILL FURTHER ORDERS ON
15.04.2014 IN THE WRIT PETITION NOS.104278-281/2014 AND
ETC.,
THESE APPEALS COMING ON FOR DICTATING ORDERS,
THIS DAY, DR.K.BHAKTHAVATSALA J., DELIVERED THE
FOLLOWING:
JUDGMENT
Appellant is before this Court under Section 4 of the Karnataka High Court Act, 1961, (for short the Act) challenging the order dated 22.05.2014 made in W.P.Nos.104278-281/2014 on the file of learned Single Judge of this Court and restore the order dated 3 15.04.2014 insofar as extending the interim order until further orders.
2. For the purpose of convenience and better understanding, 'the appellant' is hereafter referred to as 'the petitioner' as arraigned in W.P.Nos.104278-281/2014.
3. Brief facts of the case leading to the filing of the Writ Appeals may be stated as under:
On 28.03.2014, the appellant-petitioner filed writ petitions against the respondents praying to declare and hold that the words "prevailing market price of such goods in the local area" in the definition of "Value of the goods"
in Section 2 (A) (8-a) of the Karnataka Tax on Entry of Goods Act, 1979, is unconstitutional, and is beyond the competence of the State Legislature under Entry No.52 of List II of Seventh Schedule to Constitution of India, in so far as the petitioner is concerned and also issue a writ of certiorari quashing the notices bearing No.CTO (Audit) - 3/KTEG/13-14/B all dated 19.03.2014 issued by the 4 Commercial Tax Officer (Audit) -3, Belgaum, the 4th respondent proposing to pass re-assessment orders and levy penalty under Section 6 (2) of the Act for the years 2005-2006, 2006-2007, 2007-2008 and 2008-2009 at Annexure-G, H, J and K respectively and also for quashing execution and operation of the order bearing No.26439370 dated 29.03.2014 on the file of respondent No.4 at Annexure-N and grant such other relief as the court may deem fit in the circumstances of the case. There was also an interim prayer for restraining the Commercial Tax Officer namely the 4th respondent from taking further action in passing re-assessment orders and levying the penalty for the above said assessment orders in pursuance of the notices all dated 19.03.2014 issued to the petitioner at Annexures-G, H, J and K and also to stay the operation and execution of the order bearing No.26439370 dated 29.03.2014 on the file of respondent No.4 at Annexure-N pending disposal of the writ petitions. 5
When the writ petitions were listed for preliminary hearing on 01.04.2014, learned Single Judge directed the registry to post the said writ petitions along with Writ Petition Nos.67670/2010 and 67716-67717/2010 on 15.04.2014. Learned Additional Government Advocate submitted that the assessment proceedings have been concluded and demand notices have been raised insofar as the assessment year 2005-2006. Therefore, learned Single Judge issued an interim order of stay as prayed for insofar as assessment years 2006-2007 to 2008-2009 and also directed the respondents not to precipitate the matter till the next date of hearing. However, the petitioners were given liberty to file applications for amendment and ordered to list the writ petitions on 15.04.2014. On 15.04.2014, the writ petitions filed in the year 2014 were listed along with writ petitions filed in the year 2010. On 15.04.2014, IA-I/2014 for amendment of the writ petitions was allowed. The petitioners had already filed amended writ petitions. Further, learned Single Judge extended the 6 interim order until further orders with a direction to post the cases in 'B' group on 04.06.2014. Thereafter, on 24.04.2014, respondents filed an application IA-II/2014 under Section 151 of CPC for vacating stay for the reasons stated in the application. As per the High Court calendar for the year 2014, summer vacation was from 05.05.2014 to 30.05.2014. There was no sitting during summer vacation in Dharwad bench. It appears that the respondents moved the vacation court at the Principal Bench and the writ petitioners were listed on 22.05.2014 for hearing on IA-II/2014 for vacating stay. Learned Single Judge of the vacation bench vacated the interim order dated 15.04.2014 by the impugned order for the reasons stated therein. This is impugned in these writ appeals.
4. Sri K.G.Raghavan, learned senior counsel appearing for the appellants/petitioners submitted that though IA- II/2014 was filed on 24.04.2014, they kept quiet till 7 20.05.2014 and learned Additional Government Advocate moved learned Single Judge for listing IA-II/2014 for vacating stay by filing a memo but it was orally rejected on the ground that there was no time to hear the matter and as per the earlier order, the matter was supposed to be listed in 'B' group on 04.06.2014. Thereafter, the respondents filed a memo on 20.05.2014 for listing IA- II/2014 for hearing on 22.05.2014. The copy of memo was served on the counsel appearing for the appellants and the writ petition was listed before vacation bench on 22.05.2014. Learned counsel for the appellants- petitioners who appeared before learned Single Judge prayed for time, but the learned Single Judge refused to adjourn the case and erred in vacating the interim order granted in the writ petition. He further submits that with reference to the notices issued for re-assessment of the previous years prior to 2005-2006 and the interim order granted in the batch of writ petitions viz.
W.P.Nos.67670/2010 and 67716-717/2010 is still in 8 force, but they moved the vacation bench for vacating interim order granted in the writ petitions filed in the year 2014. He also submits that on 15.04.2014 learned Single Judge extended the interim order as in the batch of writ petitions filed in the year 2010 constitutional validity of Section 2 (A) (8a) of the Act is challenged as ultra vires of the charging provision and also relying upon the decision of the Apex Court reported in (1980) 4 SCC 697 in the case of STATE OF KARNATAKA AND ANOTHER VS.
M/S.HANSA CORPORATION. He further submits that learned Single Judge of vacation Bench erred in observing that the enactment was passed in the year 1992 but the constitutional validity is challenged by the petitioners in the writ petitions 22 years after passing the said Act in the year 2014 and that it is settled law that the initial presumption is that the statute passed by the State Legislature or the Parliament as valid unless held to be invalid and there was no justification to stay the demand notice and vacated the interim order, without affording an 9 opportunity to the petitioners so as to urge all the grounds. It is also contended that the regular bench did not give liberty for moving IA-II/2014 during summer vacation, and apart from that the application for vacating stay was listed before vacation bench on a basis of a memo moved by the respondents without there being an application explaining the circumstances for listing IA- II/2014 (for vacating stay) before the vacation bench. He submits the observations made in the impugned order dated 22.05.2014 prejudice the case of the petitioner. He relies upon a decision in the case of VISHNU TRADERS VS. STATE OF HARYANA AND OTHERS (1995 SUPP (1) SCC 461) on a point that in the matters of interlocutory orders, the principle of binding precedents cannot be said to apply. However, the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment requires that all similar matters should receive similar 10 treatment except where factual differences require a different treatment so that there is assurance of consistency, uniformity, predictability and certainty of judicial approach (vide para 3 of the order). He further submits that the interim relief granted in the connected batch of writ petitions filed in the year 2010 questioning the ultra vires of the provision is still in force and therefore vacating the interim order is not sustainable in the eye of law and he prays for setting aside the same.
5. On the other hand, Sri Kantharaj, learned Addl. Advocate General appearing for the respondents/State submits that learned counsel appearing for the appellants-petitioners was notified as to moving of the matter before the vacation bench for hearing on IA- II/2014 on 22.05.2014 and learned Single Judge after hearing Sri Prashant F. Goudar, learned counsel for the appellants-petitioners for 15 minutes passed the impugned order and there is no illegality or infirmity in 11 the impugned order. He relies upon the following decisions:
i) ASSISTANT COLLECTOR OF CENTRAL EXCISE, CHANDAN NAGAR, WEST BENGAL VS. DUNLOP INDIA LTD., AND OTHERS (1985) 1 SCC 260,
ii) VOLTAS LIMITED, BANGALORE VS. STATE OF KARNATAKA (2004 (56) KLJ 154),
iii) UNITED BANK OF INDIA VS. SATYAWATI TONDON AND OTHERS (2010 (8) SCC 110),
iv) W.P.No.104141/2014 DISPOSED OF ON 26.03.2014.
6. On hearing the learned counsel for the parties, we formulate following point for our consideration:
"Whether the impugned order is sustainable in the eye of law, in the context of an order passed on 15.04.2014 extending the interim order until further orders and to list the writ petitions in 'B' group on 04.06.2014?12
7. The application (IA-II/2014) for vacating stay was filed on 24.04.2014. It is submitted that when the memo for posting the matter was moved, learned Single Judge orally ordered to list the matter under 'B' group on 04.06.2014 and thus rejected the memo for posting the application for hearing. Thus, no liberty was reserved to the State to move IA-II/2014 before vacation bench. It is submitted that the respondents moved a memo for posting the matter before the vacation bench in the absence of the petitioners and thereafter copy of the memo for posting was served indicating that the matter would be listed on 22.05.2014 and accordingly the matter was listed just a week before the end of vacation.
8. When a party seeks any interim order like vacating interim order granted by the regular bench an application explaining the circumstances for urgent orders has to be filed before vacation bench by serving copy of the same on the other side. But, in the instant case, no such 13 procedure is followed. Further, the High Court summer vacation of 2014 Notification bearing No.HCBB - 75/2014 dated 25.04.2014 does deal with pending cases prior to commencement of summer vacation. Be that as it may. The impugned order does not refer to the arguments made by learned Additional Advocate General on one side and the learned counsel for the appellants-petitioners on the other side. Sri Raghavan, learned Senior Counsel for the appellants submits that there is an observation in the impugned order that vires of the provision was challenged after 22 years of passing the enactment. In this regard, he submits that prior to that there was no occasion for the appellants-petitioners to challenge the vires of the provision. We are on the propriety of the vacation bench hearing on IA-II/2014 in a pending matter and hearing on IA-II/2014 contrary to the order dated 15.04.2014. It is pertinent to mention that since the respondents had already filed statement of objections, the interim order was extended until further orders, in the presence of learned 14 Addl. Advocate General for respondents and the matter was ordered to be listed under 'B' group on 04.06.2014. They could have filed an appeal if the respondents are aggrieved of the above said order extending the interim order until further orders rejecting the memo filed for posting IA-II/2014 (vacating interim order). If the impugned order had been passed in an appeal filed under Section 4 of the Karnataka High Court Act, the matter would stand on a different footing. In our considered opinion, keeping in view the order made on 15.04.2014, the vacation bench entertaining a memo for posting the application IA-II/2014 for vacating the interim order in a pending matter; though there is an interim order in favour of the petitioner in the connected writ petitions and vacating the interim order granted by the regular bench, is not sustainable in the eye of law. In the result, we pass the following order:
Writ appeals are allowed and the impugned order dated 22.05.2014 passed on IA-II/2014 filed in the 15 W.P.Nos.104278-281/2014 on the file of vacation bench at Bangalore, is set aside and the order dated 15.04.2014 insofar as extending the interim order until further orders is restored with a direction for early disposal of the writ petitions in W.P.Nos.104278-281/2014 in accordance with law.
In view of the observation made in para-8, supra, for future guidance, the Registrar (Judicial) is directed to issue proper vacation notification with reference to listing of pending cases for hearing on pending I.As. before vacation bench.
In view of disposal of the writ appeals, IA-I/2014 does not survive for consideration and the same is accordingly disposed of.
[Sd/-] Judge [Sd/-] Judge Jm/-