Case Note & Summary
The dispute concerned the obligation of Hindustan Vegetable Oils Corporation Limited, a purchasing dealer, to furnish Declaration Forms Form III-Kha under the Uttar Pradesh Sales Tax Rules to selling dealers who supplied tin containers used for packing vanaspati. The corporation had taken over the undertakings of Ganesh Flour Mills under the Ganesh Flour Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1984, with vesting on 1984-04-23. Prior to and after vesting, the purchasing dealer had issued purchase orders for tin containers and represented that Declaration Forms would be furnished, enabling selling dealers to charge concessional sales tax at one percent instead of the normal four percent. However, part of the tins was used for job work or for vanaspati sent to other States on consignment, which did not qualify under Section 4-B(2) of the Uttar Pradesh Sales Tax Act. Consequently, the selling dealers could not produce declaration forms during their assessments and faced full tax, interest, and penalty proceedings. They filed writ petitions in the Allahabad High Court seeking mandamus directing the corporation to furnish the declaration forms. The High Court allowed the writ petitions, holding that a purchasing dealer cannot withhold declaration forms after availing the concessional rate; that the corporation is liable for the pre-vesting period under Section 22 of the Acquisition Act; that the writ petitioners were enforcing statutory obligations and the corporation as State under Article 12 was amenable to writ jurisdiction; and that the corporation had arbitrarily picked and chosen dealers. The High Court also rejected the corporation's plea that issuing forms for non-qualifying uses would expose it to penalties, though it did not decide whether penalties would actually be imposed. In the Supreme Court, the appellant corporation argued through senior advocate Rohinton F. Nariman that issuance of such forms would be illegal and expose it to penalties under Section 4-B(6), and that no writ can compel an illegal act; it also denied liability for the pre-vesting period. The provided judgment text does not include the Supreme Court's final decision or ratio decidendi.
Headnote
A) Sales Tax - Concessional Rate and Declaration Forms - Section 4-B of Uttar Pradesh Sales Tax Act and Rule 25-B of Uttar Pradesh Sales Tax Rules - The concessional facility under Section 4-B is confined to purchases of raw materials or packing materials for manufacture of notified goods intended for sale within State, inter-State trade, or export; it does not extend to goods used for job work or consignment transfers outside those specified modes - High Court held that after availing the concession by purchasing at lower tax rate, the purchasing dealer cannot withhold Declaration Form III-Kha from selling dealer and cannot later disclaim the concession; the matter cannot be left to purchasing dealer's whims. B) Writ Jurisdiction - Mandamus to Enforce Statutory Obligation - Article 12 of Constitution of India - A writ of mandamus can issue to a State instrumentality to compel performance of a statutory obligation, not merely contractual; the corporation being 'State' under Article 12 is amenable to writ jurisdiction and bound to act fairly - High Court found that writ petitioners were enforcing statutory obligation and that the corporation arbitrarily picked and chose dealers in issuing forms. C) Acquisition and Transfer - Liability for Prior Period - Sections 22 and 6(i) of Ganesh Flour Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1984 - The transferee corporation remains liable for obligations of the acquired undertaking for the period prior to vesting by virtue of Section 22, and Section 6(i) does not relieve such liability - High Court held appellant corporation bound to issue declaration forms even for period before 1984-04-23. D) Penalty Exposure - Purchasing Dealer's Objection - Section 4-B(6) of Uttar Pradesh Sales Tax Act - High Court rejected the plea that issuing declaration forms for non-qualifying uses would expose the purchaser to penalties, but declined to express opinion on whether penalties would actually be imposed - The correctness of this finding was challenged in appeal.
Issue of Consideration
Whether a purchasing dealer can be compelled by writ of mandamus to issue Declaration Forms (Form III-Kha) for tin containers used for purposes other than those specified in Section 4-B(2) of Uttar Pradesh Sales Tax Act; whether appellant corporation is liable for pre-vesting period under Section 22 of the Acquisition Act; whether issuance of such forms would expose purchaser to penalties under Section 4-B(6); whether writ petition is maintainable to enforce statutory obligation; whether corporation acted arbitrarily in issuing forms selectively
Law Points
- Recognition certificate facility under Section 4-B of Uttar Pradesh Sales Tax Act is limited to raw materials for manufacture or packing of notified goods intended for sale within State
- inter-State trade
- or export
- purchaser cannot withhold declaration forms after availing concessional tax rate
- writ of mandamus lies to enforce statutory obligation against State instrumentality under Article 12
- transferee corporation liable for pre-vesting obligations under Section 22 of Ganesh Flour Mills Company Limited (Acquisition and Transfer of Undertakings) Act
- 1984
