Delhi District Court
M/S Micro Devices Inc vs M/S Pacific Electronics on 15 April, 2024
IN THE COURT OF SENIOR CIVIL JUDGE-CUM-RENT
CONTROLLER, SOUTH-EAST DISTRICT, SAKET
COURTS, DELHI
Presided By : Ms. Swati Sharma
CS SCJ 394/23
M/s Micro Devices Inc.
Through its Proprietor
Mr. Anil Grover
306-307, Bhandari House,
91, Nehru Place New Delhi-110019
...Plaintiff
Versus
M/s Pacific Electronics
Through its Proprietor
Mr. Ankur Goel
C/o Jindal Paddy Products
Khasara No/54/3/2, Village Rampura Dehat,
Distt Uddham Singh Nagar,
Rudrapur-263153 (Uttarakhand)
Also At:
Plot No. 60, Kanakapura Main Road,
Doddakalasandra, Bangalore-560062
...Defendant
SUIT FOR RECOVERY OF Rs.1,14,417/- (RUPEES ONE
LAKH FOURTEEN THOUSAND FOUR HUNDRED
SEVENTEEN ONLY) ALONGWITH INTEREST @ 18%
PER ANNUM
DATE OF INSTITUTION: 29.03.2023
DATE OF ARGUMENTS: 15.04.2024
DATE OF ANNOUNCEMENT: 15.04.2024
EX- PARTE JUDGMENT
Plaintiff's case:
1.The plaintiff has filed this suit against the defendants, seeking recovery of Rs.1,14,417/- alongwith interest @ 18% per annum and cost of the suit.
CS SCJ 394/23M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 1 /8
2. The case of the plaintiff as discernible from the plaint is that the Plaintiff, M/s Micro Devices Inc. has filed the present Suit through its Proprietor, Sh. Anil Grover, who is well aware of the facts and circumstances of the case based on his personal knowledge and the records maintained by the plaintiff, in the due course of its business, engaged in the business of trading of electronic components. It is further stated that the plaintiff is duly registered with the department of GST vide registration no. AAGPG7124B1Z8. The defendant is a proprietorship firm of Mr. Ankur Goel and is one of the customers of the plaintiff, who used to purchase electronic components from the plaintiff.
3. It is further stated that during the financial period of 2016-2017 to 2017-2018 (Qtr-1), the defendant purchased the following components from the plaintiff: -
Financial Period of 2016-2017 Sl.No. Bill No. And Date Amount CST
1. RI-001, 04.04.2016 Rs.1,63,721/- Rs.3166.10/-
2. RI-006, 27.04.2016 Rs.33,313/- Rs.643.79/-
3. RI-042, 15.07.2016 Rs.79,666/- Rs.1523.26/-
4. RI-048, 22.07.2016 Rs.15,313/- Rs.291/-
5. RI-054, 11.08.2016 Rs.67,672/- Rs.1299/-
6. RI-057, 22.08.2016 Rs.2,35,977/- Rs.4551.32/-
7. RI-064, 07.09.2016 Rs.88,683/- Rs.1738.88/-
8. RI-065, 12.09.2016 Rs.2,41,602/- Rs.2737.30/-
9. RI-069, 15.09.2016 Rs.22,849/- Rs.437.04/-
10. RI-074, 05.10.2016 Rs.37,708/- Rs.728.40/-CS SCJ 394/23
M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 2 /8
11. RI-083, 04.11.2016 Rs.40,785/- Rs.788.72/-
12. RI-086, 08.11.2016 Rs.2,30,412/- Rs.4461.80/-
13. RI-310, 18.03.2017 Rs.1,42,462/- Rs.2743.18/-
Total Rs.14,00,163/- Rs.27,111.07/-
Financial Period of 2017-2018 (Qtr-1)
Sl.No. Bill No. And Date Amount CST
1. RI-024, 06.04.2017 Rs.55,794/- Rs.1076.96/-
2. RI-0075, 26.04.2017 Rs.78,353/- Rs.1503.40/-
3. RI-0200, 12.05.2016 Rs.11,716/- Rs.218.34/-
4. RI-0297, 19.05.2017 Rs.2,32,356/- Rs.4556/-
5. RI-0320, 25.05.2017 Rs.2,00,940/- Rs.3940/-
6. RI-0335, 31.05.2017 Rs.36,995/- Rs.725.40/-
7. RI-0355, 09.06.2017 Rs.69,434/- Rs.1361.46/-
Total Rs.6,85,588/- Rs.13,381.56/-
4. It is further stated that the applicable CST was 5%. However, 3 % rebate was against providing C-forms for the goods purchased. To get rebate of 3% CST, the defendant was to provide required C-forms to the plaintiff to submit the same with the department and get exemption from said CST of 3%. It is further stated that as per Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, requires the purchaser of the goods to issue C- forms to the seller so that the Seller can avail benefit under the provisions of the Central Sales Tax Act, 1956 and therefore, in terms of the aforesaid rule, the Defendant being the purchaser of the goods was under statutory obligation to provide C-forms to the Plaintiff for the CST charged in respect of the aforesaid invoices, as to enable the Plaintiff to avail benefit CS SCJ 394/23 M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 3 /8 under Section 8 (1) and other provisions of the Central Sales Tax Act, 1956. It is further stated that the defendant was duty bound to provide/submit the required C- forms in time to the Plaintiff to submit to the concerned department so that in the annual assessment, the plaintiff may get tax benefit. However, despite the repeated requests and demands of the plaintiff orally, telephonically as well as under Emails, the defendant failed to provide the required C-Forms for the above said purchase. It is further stated that as the required C-Forms for the above said purchase was not submitted to the concerned Department, the concerned Department issued a show cause notice dated 30.12.2020 and default Assessment of Tax and interest of CST dated 21.10.2021, wherein, the Department raised a demand for an additional 3% tax with penalty and interest from the plaintiff for the Financial Year 2016-2017 and 2017-2018 (Qtr-1) under the DVAT Act, 2004.
5. It is further stated that for the financial year 2016- 2017 against the purchase for Rs.13.55,554/-, as per the above invoices, the additional sale tax (@3% in the absence of C-forms is calculated to Rs. 40,667/-, interest @15% p.a. on the above said amount is worked out to Rs.24,400/- and penalty @1% work out to Rs.13.555/-. Accordingly, by a non submission of C- form, the plaintiff got unnecessary burdened with additional DVAT @3% plus interest and penalty as above totaling to Rs. 78.622/-. It is further stated that for the financial year 2017-2018 (qtr-1) against the purchase for Rs.6,69,078/-, as per the above invoices, the additional sale tax @3% in the absence of C-forms is CS SCJ 394/23 M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 4 /8 calculated to Rs. 20,072/-, interest @15% p.a. on the above said amount is worked out to Rs. 9,032/- and penalty @1% work out to Rs.6,691 /-. Accordingly, by a non submission of C- form, the plaintiff got unnecessary burdened with additional DVAT @ 3% plus interest and penalty as above totaling to Rs. 35.795/-. Accordingly, the plaintiff raised a Debit Note dated 20.11.2021 upon the defendant through email for the abovesaid amounts for the financial year 2016-2017 & 2017-2018.
6. It is further stated that the plaintiff has filed an Appeal against the said demand in the appropriate Forum. The Plaintiff is entitle to recover the said amount from the defendant due to its lapses in providing C-Forms. The defendant is liable to pay a Sum of Rs. 1,14,417/- with up to date and future interest to the plaintiff for causing such loss and damages. It is further stated that despite repeated reminders, the defendant failed to submit the required C-Forms to the Plaintiff. The Plaintiff left with no other option, ultimately sent a legal demand Notice dated 12.09.2022 to the defendant through its counsel demanding payment of the due amount of Rs.1,14,417/-. However, despite service, the defendant neither replied to the said legal demand Notice nor paid the due amount of Rs.1,14,417/- to the plaintiff. It is further stated that the defendant has failed to perform the statutory obligation under the Central Sales Tax Act, 1956 of providing the C-forms to the Plaintiff which has caused undue hardship and monetary loss to the Plaintiff. It is further stated that the defendant shall also be liable to compensate the plaintiff for the liability or penalty to be imposed on the Plaintiff for CS SCJ 394/23 M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 5 /8 failure to provide C-Forms to the concerned Department. Hence, the present suit has been filed.
7. The summons of this suit was ordered to be issued qua the defendant on 29.03.2023 and same were delivered to the defendant at his address of Uttarakhand on 08.05.2023 therefore, summons upon defendant were deemed to be served. However, despite service, defendant has failed to appear before the court and he was proceeded ex-parte vide order dated 14.08.2023. Thereafter, matter was listed for ex-parte evidence of the plaintiff.
Plaintiff's Evidence:
8. In order to prove its case, the plaintiff examined its Proprietor Sh. Anil Grover as PW-1. He tendered his affidavit way of affidavit Ex.PW1/A and relied upon the following documents i.e. GST Registration certificate as Ex.PW1/1; certificate of U/s 65 B of Indian Evidence Act in support of GST Registration certificate as Ex.PW1/2; 20 invoices as Ex.PW1/3 (Colly); statement of account as Ex.PW1/3A; six pages of copy of emails as Ex.PW1/4 (Colly); certificate U/s 65 B of Indian Evidence in support of emails as Ex.PW1/5; show cause notice dated 30.12.2020 and default notice dated 21.10.2021 as Ex.PW1/6; copy of debit note dated 20.11.2021 for the Financial period of 2016 to 2017 as Ex.PW1/7; copy of debit note dated 20.11.2021 for the Financial period of 2017 to 2018 (quarter-I) as Ex.PW1/8; copy of legal notice dated 12.09.2022 as Ex.PW1/9; two original postal receipts both dated 13.09.2022 as Ex.PW1/10 CS SCJ 394/23 M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 6 /8 & Ex.PW1/10A; Copy of tracking reports as Ex.PW1/11; certificate U/s 65 B of Indian Evidence Act in support of tracking reports as Ex.PW1/12.
Findings:-
9. In order to adjudicate upon this suit, Counsel for plaintiff had advanced arguments. During the course of arguments, counsel for plaintiff had inter-alia submitted that the case of the plaintiff stands duly proved by virtue of unchallenged suit filed on behalf of the plaintiff and the documents placed on record and as such, plaintiff should be granted the decree, as prayed for.
10. As per plaintiff, the Department of Trade and Taxes has issued a notice under section 59(2) of DVAT Act dated 30.12.2020 Ex. PW1/6 and default assessment of Tax and interest of CST Dated 21.10.21, wherein the department raised a demand for an additional 3% tax with penalty and interest from the plaintiff for the financial year 2016-2017 and 2017-2018 under the DVAT Act, 2004. Admittedly, the plaintiff has not yet paid even a single penny to the said department in response to the said show cause notice dated 30.12.2020 Ex. PW1/6 as had been clarified by Ld. counsel for plaintiff. 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 said notice is not an absolute demand as it is contingent on the nonfurnishing of the Cforms. Hence, the claim CS SCJ 394/23 M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 7 /8 of the plaintiff in this case is premature as in absence of any payment made by the defendant 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 C-
form 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. PW1/6 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. File be consigned to Record Room after due compliance.
Digitally
signed by
Typed directly on court computer Swati Swati Sharma
and Announced in the Open Court Sharma Date:
2024.04.09
on 15.04.2024 18:34:23
+0530
(Swati Sharma)
Senior Civil Judge-cum-Rent Controller
South East, Saket Courts, New Delhi
CS SCJ 394/23
M/s Micro Devices Inc vs. M/s Pacific Electronics Page no. 8 /8