Madhya Pradesh High Court
M/S Sanjay Fuels vs Additional Divisional Dy.Commr.Tax ... on 22 April, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356
1 WP-28198-2003
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
WRIT PETITION No. 28198 of 2003
M/S SANJAY FUELS
Versus
ADDITIONAL DIVISIONAL DY.COMMR.TAX &ORS
Appearance:
Shri Mukesh Agrawal - Advocate for the petitioner.
Shri Rajvardhan Dutt Padraha - Government Advocate for the
respondent/State.
WITH
WRIT PETITION No. 28001 of 2003
VANDANA FUELS (PVT.) LTD.
Versus
ADDITIONAL DIVISIONAL DY. COMM. & ORS.
Appearance:
Shri Mukesh Agrawal - Advocate for the petitioner.
Shri Rajvardhan Dutt Padraha - Government Advocate for the
respondent/State.
WRIT PETITION No. 28024 of 2003
SHARDA DOMESTIC FUELS
Versus
ADDITIONAL DIVISINAL DY. COMM. &ORS.
Appearance:
Shri Mukesh Agrawal - Advocate for the petitioner.
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356
2 WP-28198-2003
Shri Rajvardhan Dutt Padraha - Government Advocate for the
respondent/State.
WRIT PETITION No. 28145 of 2003
M/S JEMINI FUELS PVT. LTD.
Versus
ADDL. DIV. DY. COMMR.,COMMERCIAL TAX &A
Appearance:
Shri Mukesh Agrawal - Advocate for the petitioner.
Shri Rajvardhan Dutt Padraha - Government Advocate for the
respondent/State.
RESERVED ON : 06.04.2026
PRONOUNCED ON : 22.04.2026
................................................................................................................................................
ORDER
Per: Justice Vivek Rusia Since identical questions of fact and law are involved in these Writ Petitions, all these matters were heard analogously and are being decided by this common order. For the sake of convenience, facts are being referred from Writ Petition No.28198/2003.
The petitioner has filed the present petition under Article 226/227 of the Constitution of India challenging the order dated 19.10.2000 passed by the Commercial Tax Officer, Katni Circle, Katni (M.P.) cancelling the registration certificates under the Commercial Tax Act, 1994 and Central Sale Tax Act with effect from 01.04.2000 and the order dated 06.02.2003 whereby the revision filed under Section 62(1) of the Commercial Tax Act, 1994 bearing Case No.41/State/2001 has been dismissed by the Additional Divisional Deputy Commissioner, Commercial Tax, Jabalpur.
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 3 WP-28198-2003 Facts of the case, in short, are as follows:-
2. The petitioner is a private limited company registered under the Companies Act, established a mechanised plant at Industrial Area, Purena, District
- Panna (M.P.) for the manufacturing of Coal Briquettes. The petitioner obtained the necessary registration certificates under the State Act as well as the Central Act.
3. The petitioner used to purchase a raw material i.e. coal, from South Eastern Coalfields Limited (SECL) for manufacturing Coal Briquettes, for which the petitioner was granted an eligibility certificate exempting from payment of commercial tax for the period from 21.04.1994 to 20.04.2001.
4. The Respondent No.2 - Commercial Tax Officer, Katni Circle, Katni (M.P.) issued a show cause notice dated 19.07.2000 as to why the registration certificates issued under the State and Central Acts should not be cancelled due to the closure of the business of manufacturing of Coal Briquettes . The aforesaid notice was issued on the basis of the inspection report received by the department, wherein it was reported that no production activities have been going on in the plant and the business is closed.
5. The petitioner filed a reply to the aforesaid show cause notice dated 19.07.2000, admitting that the production of coal briquettes has been suspended from 29.05.2000 as the coal was not being received from the South Eastern Coalfields Limited (SECL). It was also submitted that the plant was under repair for some time, and the inspection report was prepared behind the back of the petitioner.
6. Vide order dated 19.10.2000, the Respondent No.2 cancelled the registration certificates as the petitioner failed to produce any material to show that the production activities were going on in its Unit.
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 4 WP-28198-2003
7. Being aggrieved by the order of cancellation of registration certificates dated 19.10.2000, the petitioner filed a Revision Petition contending that the business is being carried on regularly and the returns of business have also been filed even after 01.04.2000. The petitioner filed a certificate issued by the Sarpanch of the village where the factory was situated to certify that the factory is functioning.
8. The Revisional Authority vide order dated 06.02.2003 has dismissed the revision and upheld the order of cancellation of registration certificates. Hence, this present petition is before this Court.
Submissions.
9. Learned counsel for the petitioner submits that after the cancellation of registration, the petitioner and other similar manufacturers of coal briquettes were subjected to the assessment proceedings. They approached this Court by way of filing various Writ Petitions challenging the assessment orders. All the Writ Petitions were allowed and disposed of by a common order dated 08.01.2013, passed in Writ Petition No.15484/2007 (M/s Shri Sharda Domestic Fuels Pvt. Ltd. Vs. State of Madhya Pradesh and others), [(2013) SCC Online MP 232] . The Division Bench, after quashing the Assessment Order, remanded it back to the Assessing Officer to comply with the remand order dated 10.05.2004 passed by the Commissioner and proceed further in accordance with law after extending the opportunity of hearing to the petitioner.
10. Thereafter, vide order 13.02.2013, the remaining Writ Petitions, lead case being Writ Petition No.4323/2008 (M/s Sanjay Fuels Vs. The Assistant Commissioner, Commercial Tax and others ) were also disposed of in light of the order dated 08.01.2013, M/s Shri Sharda Domestic Fuels Pvt. Ltd. (supra). NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 5 WP-28198-2003
11. In compliance with the aforesaid remand by this High Court vide orders dated 08.01.2013 and 13.02.2013, the fresh Assessment order was passed by the Assessing Officer on 30.12.2015 in favour of the petitioner. It is submitted that the stand taken by the petitioner that the manufacturing of coal briquettes had never been stopped has now been accepted by the Assessment Officer by quashing the demand, and the Department has accepted the said order by not filing the appeal. It is submitted that the reasons for the cancellation of registration certificates are no longer res integra . Hence, the impugned orders dated 19.10.2000 and 06.02.2003 are liable to be quashed.
12. After notice, the respondents filed the reply that the petitioner, Vandana Fuels (Pvt.) Ltd., was granted a provisional registration certificate as an intending manufacturer of coal briquettes in the year 1991. Thereafter, it was made permanent in the year 1994. The petitioner obtained the eligibility certificate from the Industries Department, exempting it from payment of Sales Tax/Commercial Tax for a period of seven years from 25.03.1994 to 24.03.2001 (which has wrongly been stated as 21.04.1994 to 20.04.2001 in para 5.1 of this petition) under a Notification No.35 dated 23.10.1981 issued by the State Government.
13. It was further submitted that an enquiry was instituted in the Office of Divisional Deputy Commissioner, Commercial Tax, Jabalpur and for the purpose of enquiry, a Task Force was constituted which was headed by Assistant Commissioner, Commercial Tax, Jabalpur, who enquired about the manufacturing activities and operation of the coal briquettes manufacturing unit situated in Udyog Giri, Village- Purena, District - Panna. The Task Force inspected and surveyed 13 industrial units on 22.06.2000. However, not only were all these units found locked, but also no worker was found in the factory premises in working capacity. NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 6 WP-28198-2003 A detailed report was submitted by the Task Force on 24.06.2000, reporting that the manufacturing process is shown only on paper, whereas no manufacturing activities were found during the course of the visit of the Task Force.
14. In view of the aforesaid report submitted by the Task Force, a show cause notice dated 19.07.2000 was issued to the petitioner and it failed to produce any material to show any manufacturing activities carried out in the industrial unit. Hence, the registration certificates were cancelled. Actually, the petitioner neither manufactured coal briquettes nor sold them within the State of Madhya Pradesh.
15. Further, it is also submitted that the Central Bureau of Investigation (CBI) received information against the Petitioner (along with 6 other industrial units of Purena) that they entered into criminal conspiracy with four officials of SECL and Railway in Sohagpur Area of SECL, District-Shahdol (M.P.) during the year 1999 and in pursuance thereof got released better quality and excess quantity of coal and subsequently instead of manufacturing coal briquettes for which coal was released to the petitioner, sold the coal in the black market and thus earned illegal profit. On the basis of this information, an F.I.R. bearing Crime No. RC 17(A)/99-JBP dated 25.10.1999 was registered in the Office of the Superintendent of Police, CBI, ACB, Jabalpur and a Regular case was registered and entrusted to Shri Rajiv Kumar, Inspector of Police, CBI, ACB, Jabalpur for investigation. After a detailed investigation, the case was submitted before Shri P.N. Singh, Special Magistrate, C.B.I., Jabalpur and registered as Special Case No. 2/2001. From the aforesaid criminal case, it is evident that the petitioner was not engaged in the manufacturing of coal briquettes and was falsely representing itself as a manufacturer.
16. Per contra, learned counsel for the respondent denied all the grounds NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 7 WP-28198-2003 raised by the petitioner in his petition, contending inter alia that the cancellation of the registration certificates is void, arbitrary, illegal and bad in law and the impugned orders have been passed mechanically without application of mind. It is also denied that the respondents have committed a manifest error in cancelling the registration certificates. It is also contended that the petitioner is not carrying on the manufacturing business as stated in the preceding paragraphs, but is misusing the benefits granted by the State Government. It is also denied that the respondents have misunderstood and misconstrued the provisions of the State Act and the Central Act regarding cancellation of the registration certificate. It is submitted that the registration certificates have been cancelled under Section 22 (9) of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 and under Section 7(4) of the Central Sales Tax Act, 1956. It is denied that the order of cancellation suffers due to the violation of the principle of natural justice. It is also denied that the cancellation of registration certificates was in a casual manner and deprived the petitioner of his right to carry on business. In view of the above, Shri Rajvardhan Dutt Padraha, learned Government Advocate prays for the dismissal of all these writ petitions.
Appreciation & Conclusions
17. The assessment proceedings were also initiated in the case of "M/s Gemini Fuels Pvt. Ltd. Vs. Assistant Commissioner and others.". Vide order dated 16.08.2005, the Additional Commissioner, Commercial Tax, Jabalpur had allowed the Revision Case No.54/R/05-State and 55/R/05- Entry Tax by holding that during the period of bracketing, manufacturing unit did carry on the business of manufacture and sale of the coal briquette and deleted the levy of tax under State Act as well as Entry Tax Act, in support of which, one of the orders passed on 16.08.2005 has been brought on record.
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 8 WP-28198-2003
18. In view of the above submissions, the Assistant Commissioner, Commercial Tax, in compliance with the remand order passed by this Court, reconsidered the entire matter and recorded the following findings :
"सम प से करण म संल न सा य एवं त य का प रशीलन करने के प ात ऐसे
त य काश म आये है क :-
1. वभाग ारा ग ठत टॉ क फोस ारा जांच ितवेदन दनांक 24-6-2000 को तुत कया गया है । इस ितवेदन के अनुसार जांच संभागीय उपायु वा ण यक कर जबलपुर के आदे श . 69 द. 21-6-2000 के अनु म म क जाकर दनांक 24-6-
2000 को वेदन तुत कया गया है ।
2. करण म संल न टॉ स फोस ारा तैयार कये गये पंचनामा दनांक 22- 06-2000 को ी आ माराम पाल सरपंच ाम पंचायत पुरैना, ी उ मदास सरपंच ाम सुगरहा, ी नरे श ताप िसंह सरपंच ाम पचायत परसवाडा ारा ह ता र कये गये है । इन ह ता रकता ारा करदाता के प म सपथ प दये गये है क दनांक 22-6-2000 को वा ण यक कर वभाग के कुछ अिधकार पुरैना फै क जांच क गई थी। हम लोग ने इस आशय क द द क क थी क जांच दनांक को फै यां बंद थी, क तु जांच दनांक के 4-5 म हने पहले ये फै यां चालू थी और जांच के व फै य म कोयला रखा हुआ था। अिधका रय ारा हमारे बयान एवं पंचनामा क ित हम नह ं द गई थी मा हमसे पंचनामा म द खत कराये गये थे। मामले क गंभीरता को दे खते हुए उनके ारा सहायक आयु के सम उप थत होकर दनांक 9-
4-2002 को सपथ प तुत कया गया था।
3. सहायक आयु क अ य ता म ग ठत टॉ क फोस ारा उ ोगिगर पुरैना
थत अ य 12 इकाईयां जो कोल के स का िनमाण करती है के साथ दनांक 22-6-
2000 को कया गया था।
4. इकाई ारं भ होने के प ात द. 1-4-96 से 14-12-99 तक विभ न ितिथय म जला उ ोग के प ना, दगीह एवं ट कमगढ़ के बंधक , तहसीलदार शाहनगर, ड ट कले टर, एड ओ पवई ारा इकाई का िनर ण कया गया था तथा उनके ितवेदन अनुसार इकाई कायरत पायी गई थी।
5. ी पी.ड . वेद , तहसीलदार एवं ी पी. ड . बंशकार, बंधक जला उ ोग के प ना ारा इकाई क संयु जांच क गई थी तथा इस आधार पर इकाई को कोल आवंटन क अनुशंसा भी क गई थी।
इन त य से यह पाया गया क यवसायी क उ ोिगक इकाई आलो य अविध म चालू रखी है । टॉ क फोस ारा दनांक 22-6-2000 को जांच के समय इनवई बंद होने के कारण पूव अविध म इकाई बंद रह है ऐसी प रक पना करते हुए करारोपण कया जाना विध एवं याय के व है । इस ब द ु पर करदाता ारा व ािसत याय पृ ांत NEUTRAL CITATION NO. 2026:MPHC-JBP:30356 9 WP-28198-2003 V.B. Gadkari Vs Sale tax officer circle-vi Indore (2005)5 STJ 503(MP) "While making best judgement assessment the estimate must be based on some evidence or material and it must be something honestly believes to be fair estimate considering the materials available before him, the assessing authority simply stated that the taxable turnover is determined, it is pure guess work without reference of any evidence or material at all, it deserves to be quashed" माननीय सव च यायालय ारा रघुवर मंडल ह रहर मंडल व वहार रा य तथा केरल रा य व सी. वेलूकु ट के याय ांत म भी उपरो ानुसार या या क है । तुत याय अ ांत का प रशीलन कया गया। इन सम ब दओ ु ं पर वचारण प ात म इस िन कष पर पहुच ं ता हू ँ क इस करण म पा रत कया गया मूल आदे श दनांक 29-12-1999 प ातवत कायवाह हे तु ह त ेप यो य नह ं है । अतः मूल करिनधारण आदे श म सकल व करयो य व य रािश . 25260000/- िनधा रत क जाती है । जो सम त कर यो य होने के कारण 4% क दर से कर . 971538/-िन पत कया जाता है । जला उ ोग के प ना ारा जार पा ता माण प के अनु म म िन पत कर क रािश . 971538/- के भुगतान से मु दान क जाती है ।
करदाता ारा तुत कये गये प ीकरण इन त य को वीकार कया गया है
क उनके ारा जार कये गये व य बीजक म े ताओं के नाम पता इ या द प
प से नह ं िलखे गये है । इस कार करदाता ारा म य दे श वा ण यक कर
अिधिनयम 1994 क धारा 43 (1) का उलंघन कया गया है । चू ं क इस ु ट को
करदाता ारा वयं अपने पट करण म वीकार कर िलया गया है । इस ु ट के िलए शा त हे तु ता वत सूचना प के अिधकार एवं सुनवाई समय का प र याग कया गया क तु उ ु ट के िलए वीकारो के अित र कोई कारण पृथक से नह ं बताये जा सके है । अतः धारा 43(2) के अंतगत . 5000/- क शा त आरो पत क जाती है ।
मूल करिनधारण आदे श म कर भुगतान करके य कये कोयला . 4820559/- पर 4% क दर से वीकृ त मुजराई . 192822/- यथावत रखी जाती है । इसम से मूल आदे श म आरो पत शा त . 700/- एवं इस आदे श म आरो पत शा त . 5000/- के समयोजन प ात . 187122/- वापसी यो य मा य कये जाते। वापसी का कारण फम को जला उ ोग के प ना से पा ता माण प बलंव से ा होने के कारण कर भुगतान करके क चा माल य कया जाता रहा है । पा ता माण प के अनुसार करदाता को य के समय शू य दर से कर क दे यता रह है क तु वे त समय घोषणा प पर य करने म पा ता माण प नह ं होने के कारण स म नह ं रहे है । पा ता माण प के अनुसार उ ह इस संपूण अविध के िलए क चे माल क खर द पर छूट क पा ता होने के कारण िनयमानुसार वापसी दान क जाए।"
NEUTRAL CITATION NO. 2026:MPHC-JBP:30356
10 WP-28198-2003
19. In view of the above, nothing is placed on record to show that the aforesaid order has been challenged by way of revision by the Commercial Tax Department.
Conclusion.
20. After cancellation of registration certificates based on the report submitted by the Task Force, the assessment cases were reopened for various years, and the manufacturers were held liable for payment of tax and penalty. The said matter came up before this Court in a bunch of writ petitions i.e. M/s Shri Sharda Domestic Fuels Pvt. Ltd.(supra) and M/s Sanjay Fuels (supra) . The assessment matter was remanded back, and the same Authority which had cancelled the registration certificates, re-examined the matter and recorded the findings that industrial units were running during the relevant period. Thus, once the Authority has passed an assessment order after giving findings that the manufacturing activities were being carried on, the impugned order is not liable to be sustained.
21. With the aforesaid observations, all these writ petitions are disposed of. The order dated 19.10.2000 passed by the Commercial Tax Officer, Katni Circle, Katni (M.P.), cancelling the registration certificates under the Commercial Tax Act, 1994 and Central Sale Tax Act with effect from 01.04.2000 and the order dated 06.02.2003 passed by the Additional Divisional Deputy Commissioner, Commercial Tax, Jabalpur, are hereby quashed.
(VIVEK RUSIA) (PRADEEP MITTAL)
JUDGE JUDGE
Shivani
Digitally signed by SHIVANI TIWARI
Date: 2026.04.22 14:43:56 +05'30'