Case Note & Summary
The dispute arose from writ appeals before the Division Bench of the Karnataka High Court concerning the applicability of a Government Order under Section 8A of the Karnataka Sales Tax Act, 1957. The assessee challenged the High Court's judgment by special leave before the Supreme Court. During the hearing on 13 August 1996, the Supreme Court discovered that the High Court had decided the matter on the basis of a rejoinder filed by the State Government, which stated that Government Order No. CI 138 SPC 90 (P) dated 27 September 1990 had not been published in the Official Gazette and had not been laid before the State Legislature as required under Section 39 of the Act. This statement was verified on affidavit by R. Krishna Murthy, Deputy Commissioner of Commercial Taxes. However, it was found during the Supreme Court proceedings that the Government Order had in fact been published in the State Gazette dated 7 March 1991, rendering the State's statement false. The Supreme Court, by order dated 13 August 1996, directed the Chief Secretary of Karnataka to file an affidavit explaining the true position regarding compliance with Section 39 and the Deputy Commissioner's false verification. In response, the Chief Secretary filed an affidavit on 31 August 1996, concluding that the Deputy Commissioner had made a bona fide mistake and was not grossly negligent or deliberately misleading the court. The Deputy Commissioner also filed an affidavit apologizing for his unintended mistake. The Supreme Court examined the conduct and held that the State Government had made a categorical false statement on oath in a pending proceeding, which the High Court had acted upon. The Court rejected the Chief Secretary's conclusion of no gross negligence and expressed concern that such unconcern would encourage other officers to make statements without proper enquiry. Consequently, the Supreme Court allowed the appeals, set aside the High Court judgment, restored Writ Appeal Nos. 274-278 of 1994 to the High Court for fresh decision, directed expeditious disposal within four months, continued the interim order, and awarded costs of Rs. 50,000 to the appellants.
Headnote
A) Civil Procedure - Judicial Review - Incorrect Affidavit by State - Karnataka Sales Tax Act, 1957, Sections 8A and 39 - The Supreme Court found that the High Court had proceeded on the basis that a Government Order dated 27.09.1990 was not published in the Official Gazette, which was factually incorrect; the State's rejoinder on oath made a categorical false statement, and the High Court acted upon it - Held that a judgment based on such incorrect statement cannot stand and must be set aside and remanded for fresh decision (Paras 1-4) B) Conduct of Government Officers - False Statement on Oath - Gross Negligence and Misleading Court - Karnataka Sales Tax Act, 1957, Section 8A - The Supreme Court directed an inquiry into how a Deputy Commissioner could verify as true a false statement about gazette publication; Chief Secretary's affidavit concluded no gross negligence, but the Court disagreed, cautioning High Courts to be vigilant in accepting statements on oath by State Government - Held that the State Government's unconcern may encourage other officers to make statements with little or no enquiry (Paras 1-4)
Issue of Consideration
Whether the High Court judgment should be set aside because it was based on a factually incorrect statement made on oath by the State Government regarding publication of a Government Order under Section 8A of the Karnataka Sales Tax Act, 1957; whether the Deputy Commissioner of Commercial Taxes was grossly negligent or acted with deliberate intention to mislead the court; and what directions are appropriate regarding inquiry into compliance with Section 39 and the conduct of State officers in making statements before courts.
Final Decision
Appeals allowed; judgment and order under appeal set aside; writ appeals (Writ Appeal Nos. 274-278 of 1994) restored to High Court for fresh decision; High Court to hear and dispose expeditiously within four months; pending disposal, interim order passed earlier by Supreme Court to continue; State of Karnataka to pay costs of Rs. 50,000 to appellants.
Law Points
- A judgment based on an incorrect statement made on oath by the State Government cannot be sustained
- High Courts must be vigilant in accepting statements on behalf of the State even if made on oath
- Compliance with Section 8A and Section 39 of Karnataka Sales Tax Act
- 1957 regarding publication and laying before legislature must be accurately represented
