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Judgment
Anand Byrareddy, J.—1. Heard the learned counsel for the petitioner. The learned Government Pleader is directed to take notice for the respondents.
The petitioner is a company incorporated under the Companies Act, 1956, now merged with M/s. Kirloskar Electric Company Ltd., Bangalore, and is a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as ''the KST Act'', for brevity). It is engaged in the manufacture and sale of electric motors and generators.
In respect of the assessment years 2003-04 and 2004-05, there were orders of assessment and reassessment concluded under the KST Act by the Deputy Commissioner of Commercial Taxes, Transition-21, Divisions-2 and 4, Bangalore, who passed orders dated 30.11.2007 respectively. In those orders, re-sale tax came to be levied under Section 6-B of the KST Act at the rate of 1.5% on the sale of branded electric motors and generators to the brand name holder.
Being aggrieved, appeals were filed, which were allowed by a common order. Thereafter, the Additional Commissioner of Commercial Taxes, initiated suo motu proceedings under section 22-A(1) of the KST Act, proposing to revise the order of the First Appellate Authority and to restore the order of Assessment and Reassessment passed by Assessing Authority on the ground that the order was erroneous and it was prejudicial to the interest of the revenue. The said proceedings culminated in an order dated 4.8.2008 and accordingly, the Assessing authority''s orders were restored, against which Sales Tax Appeals were filed before a Division Bench of this Court. The appeals were ultimately dismissed by a judgment dated 17.06.2013 along with other connected matters. The matter was then carried to the Supreme Court by way of Special Leave Petitions in S.L.P.(C) Nos. 31890 and 31861/2013. There was also an application for stay filed along with the petition seeking stay of operation of the judgment and order. It was listed before the Apex Court on 18.10.2013. Upon hearing the matter, the court was pleased to direct issuance of notice to the respondent-State of Karnataka through the second respondent in these petitions as well as on the application for stay. The matter was then listed for hearing before the Apex Court on 29.11.2013. The counsel appearing on behalf of the respondent therein entered appearance and sought time for filing a counter affidavit. The court was pleased to permit him to file a counter within three weeks and a rejoinder, if any, to be filed by the petitioner within two weeks thereafter and directed the matter to be listed on 17.02.2014. On 17.02.2014, the matter was listed for final hearing on 6.5.2014.
It is pointed out that on both the dates of hearing, namely on 17.02.2014 and 6.5.2014, the counsel appearing for the State significantly remained absent and in any event, the matter was not reached on 6.5.2014 and could not be heard and is pending even as on date. The application for stay has also not come up for orders before the Supreme Court. In the meanwhile, taking advantage of the lull in the proceedings, though the proceedings before the Supreme Court is still pending, the respondents have sought to recover monies from the petitioner, though over time the petitioner has deposited more than Rs. 1,30,00,000/- out of a total demand of more than Rs. 5,00,00,000/-.
The learned counsel for the petitioner would point out that actually in the view of the petitioner, there is no liability at all, in spite of which a large sum of over Rs. 1 crore having been paid. The matter being under consideration before the Supreme Court, it would be unjust and would cause irreparable injury to the petitioner if the respondents are permitted to take recourse to coercive measures in seeking to recover the amount, which is the subject matter of challenge before the Apex Court.
The learned counsel would also point out that there is input credit due to the petitioner, which has not been released in their favour till date. Therefore, the Revenue has the benefit of the said sum as well.
In such a circumstance, if the proposed action of the respondents is not prevented, the petitioner would face financial ruin and may even have to go out of business and hence, the present petition.
The learned Government Pleader, while opposing the petition, would submit that the matter pending before the Supreme Court would not assist the petitioner, as there is no interim order of stay granted even according to the petitioner, in which event, a Division Bench of this Court having dismissed the appeal filed by the present petitioner, it is open for the Revenue to enforce the same. It is not also in dispute that the Division Bench had disposed of the appeal as early as on 17.06.2013 and therefore, even after such a long lapse of time, if the petitioner is given a long rope, the Revenue would suffer losses, which would ultimately reflect on the public exchequer and therefore seeks that the petition be dismissed, as it is for the petitioner to approach the Apex Court in seeking expedition of the matter pending therein and there is no warrant for this court to interfere, as the appeal filed before the Division Bench has been dismissed and it would not enable the petitioner to seek any such relief of restraint on the respondents in this proceeding and seeks dismissal of the petition at the threshold.
Given the circumstances that the petitioner has indeed approached the Apex Court and the matter is pending as aforesaid, and the State also having entered appearance through counsel and not having effectively represented before the Apex court, it would not lie in the mouth of the State to hold that the petitioner should be left to his remedies. The law should take its course and the petitioner having taken recourse to law by seeking the appropriate remedy before the Supreme Court in the Special Leave Petition which is said to be pending, it would be unjust and unfair if the respondents should take the judgment passed by this Court to its logical conclusion by seeking to execute the same. In the further circumstance that substantial sum has been recovered from the petitioner, the proposed action of the respondents would appear onerous and would require the respondents to stay their hand at least for a period of eight weeks, to enable the petitioner to approach the Apex Court in order to seek that the matter be expedited and disposed of one way or the other on merits. If the respondents should be so directed, there is no injustice caused.
Accordingly, the petitions are disposed of while restraining the respondents from taking any further action to recover amounts from the petitioner pursuant to Annexure-"A", for a period of eight weeks.