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Judgment
C. Shivappa, J.—In both the Writ Petitions, the parties being the same, after hearing both the learned Counsel, the following common order is passed:
The Petitioner in both the Writ Petitions is seeking for a direction to forbear the Respondent No. 1 from proceeding further, pursuant to his C.S.T. No. 1211/80-81 and C.S.T. No. 1211/81-82, dated 19.5.1989 until return of records seized under Panchnama dated 5.2.1982 by the Respondent No. 2.
The Petitioner imported vegetable oil on behalf of the licence holders and as agents of the licence holders at the Port of Madras during the year 1980-81 and 1981-82. These oils were also either sent to the factories of the licence holders or despatched to consignment agents of the licence holders directly from the Port of Madras. Wherever immediate transport could not be made, the oils were stored at the premises of the Associated Concern of M/s. Oswal, Oil and Vanaspati Industries, Madras-21. It is the case of the Petitioner that subsequently these oils were despatched by way of transfer of stock on the inspection of the licence holders and it did not effect any inter-state sale taxable in Tamil Nadu. The Respondent No. 2 seized the entire records relating to the imports on behalf of the licence holders, under Panchanama dated 5.2.1982, and came to the conclusion that the despatch of oil from Madras harbour relates to inter-state sale and the Petitioner being the agent of the licence holders is liable to tax.
It is the grievance of the Petitioner that in the course of the assessment done by the Respondent No. 1 on 25.11.1987 for 1980-81, and 16.2.1988 for 1981-82 under the Central Sales Tax Act, 1956, though the Respondent No. 1 alleged that many records were not produced by the Petitioner, the Petitioner was neither granted time to produce the records nor did he examine the position about the seizure of entire records by the Respondent No. 2.
The Petitioner was finally assessed under the Central Sales Tax Act, 1956 (hereinafter referred to as ''The Act'', for short) for the years 1980-81 and 1981-82 to the best of judgment on a total and taxable turnover of Rs. 1,74,12,145/- and Rs. 2,92,45,668/- respectively vide proceedings No. CST.1211/80-81 dated 25.11.1987 and CST. No. 1211/81-82 dated 16.2.1988.
The Petitioner filed an appeal before the Appellate Assistant Commissioner (CT), Madras in Appeal Nos. CST 9/88 and 125/88 and the Appellate Authority remanded the case on 25.10.1988 to the assessing officer for fresh disposal on the ground that the Petitioner undertook before the Appellate Authority to produce all the records relating to the business to the Assessing Officer. Pursuant to the order of the Appellate Authority, summons were issued for the production-of accounts for fresh check.
It is the grievance of the Petitioner that since many of the records have been seized by the Respondent No. 2, the Petitioner cannot file objections until the records are returned by the Respondent No. 2. The Petitioner has also filed a Civil Revision Petition No. 11703/89 before the Punjab & Haryana High Court for the return of the records. The non-return of the records inspite of repeated letters has caused great prejudice to the Petitioner and it is under threat of assessment by the Respondent No. 1, hence, it is seeking for a direction not to complete the assessment.
The Respondent No. 1 in their counter contended that in response to the notice after remand, one Sri. A.P. Sharma, Authorised Representative of the Petitioner appeared on 21.4.1989 and 12.5.1989 and produced the cash book, ledger and vouchers, etc., maintained by their Head Office at Ludhiana. But the original books of accounts relating to Madras Office of their business were not produced. The Authorised Representative furnished the xerox copies of the statements showing the details of goods imported on behalf of the licence holders, copies of the agreement between the Petitioner and Tvl. Cashmero Wollen and Silk Mills, Tvl. Guide Knitwears Pvt. Ltd., and Tvl. Industrial Cables (India) Ltd., xerox copies of few bills of entries and copy of the statement of accounts in respect of Tvl. Seva International Fashioners, Tvl. Guide Knitwears (P) Ltd., Tvl. Cashmires Woollen and Silk Mills Ltd., from the books of Head Office at Ludhiana. This statements shows the payment of commission to the Petitioner herein by the licence holders.
It is also submitted that the original records as promised by the Petitioner before the Appellate Authority in October 1988 when the appeal was heard, were not produced on the pretext that they have been taken away by the Central Excise Department and that they may be available at Ludhiana. Thus, the Petitioner has not acted as per the undertaking given before the first Appellate Authority, based on which the Appellate Authority remanded the case to the Assessing Officer.
It is alleged that the Authorised Representative pursuant to the summons issued by the assessing officer, furnished the extracts from the register named ''Third Party''s Accounts'' which is the reproduction of documents. The quantitative details given in the records produced by the authorised representative are taken into accounts. The entries in the register of Third Party''s Accounts show the stock position that they have imported 837.406 M.T. of Acid Oil on behalf of Tvl. Zansal, which has not been included in the statement showing the details of goods imported. This quantity also included in the total quantity imported. It is averred that the Petitioner has taken delivery of 8823.457 M.T. of Acid Oil and 7486.431 M.T. of Stearim and despatched them to other States, of which, the Petitioner claimed that a tanker load of Acid Oil has been lost in transit and that the Railway Authority has been informed of it and has been requested to locate the missing wagon. No particulars have been furnished as to whether the missing wagon is traced. In the absence of proof that the goods have not reached the destination, the Petitioner''s plea was not accepted. Therefore, the total quantity which was cleared from Madras Harbour and taken to their godown and disposed of, has been taken into account for the purpose of assessment.
In the counter at para 8 it is stated that regarding the Petitioner''s liability to tax on the goods despatched to other States, the Petitioner''s contention is that it cleared the goods imported on behalf of the licence holders from Madras Harbour and despatched to different consignees as instructed by the licence holders who are residence in other States. But from the records they produced, it is clear that they have acted as agent of non-resident principal. It is contended that the records further show that the Petitioner had cleared the goods and met out all the expenses including the cost of the goods imported as per agreement produced. Hence, on the basis of the records produced before the Assessing Officer, the assessing officer has proposed to determine their total and taxable turnover at Rs. 1,72,93,845/- for the assessment year 1980-81 and for the assessment year 1981-82 at Rs. 11,05,93,860/- by the impugned pre-assessment notice dated 19.5.1989 and call for their objections, if any, to the abovesaid proposal from the Petitioner with connected records giving them time upto 15.5.1989.
It is to this pre-assessment notice, the Petitioner by its letter dated 19.6.1989 sought for certain clarifications. The Assessing Officer by his letter dated 4.8.1989, informed the Petitioners as follows:
You are hereby informed that you may appear before me in my office on any working day and gather any further particulars required by you and file your written objections with connected records at 12 Noon on 16.8.1989, failing which, the proposal notified in the pre-assessment notice will be confirmed and final orders passed for both the years 1980-81 and 1981-82.
The said notice was received by the Petitioner on 12.8.1989 and for that notice, a reply dated 16.8.1989 was sent through the counsel, whereby further time was requested to represent the case and to submit objections for the said notice. The Assessing Officer by his notice dated 2.9.1989 granted further time upto 7.9.1989. Again the Petitioner by its letter dated 3.9.1989 requested further time of one month for production of the connected records with their objections. While that being so, on 22.9.1989, the present Writ Petitions were filed by the Petitioner and interim injunction was obtained. Thus, the entire process of assessment in pursuance of the proposal notice is stalled.
The question that arises for consideration in these Writ Petitions is whether the conduct of the Petitioner entitles them for a direction preventing the Respondent No. 1 to proceed further in pursuance of the proposal notice?
Against the earlier assessment orders, the Petitioner filed Ap. No. CST No. 125/88 and 9/88 and the Appellate Authority on the undertaking of the Petitioner that it will produce the documents, remitted the matter to provide an opportunity to the Petitioner to produce all the records relating to the business, before the assessing officer. When the pre-assessment notice was issued after verifying the records and called for objections, if any, to the said proposal, the Petitioner through its authorised representative from May 1989 upto 22.9.1989 on various pretext sought for time to produce the records and to file objections, ultimately, approached this Court for the prayer not to proceed with the assessment till the records are produced.
The basis for the Writ Petition is that the records were seized on 5.2.1982 by the Assistant Collector (Preventive), Central Excise Collectorate, Chandigarh and the Enforcement Officer, Commercial Tax Department inspected the office of the Petitioner at Madras on 6.6.1981 and recovered certain files and came to the conclusion that the despatch of oil from Madras Harbour relates to interstate sale and that the Petitioner being the agent of the licence holders, is liable to tax.
It is the duty of the Petitioner to prove that its transactions are not interstate transactions, by producing material evidence before the assessing officer. Having given an undertaking before the Appellate Authority on 25.10.1988 that it will produce the relevant record before the assessing officer, taken a contrary stand now, the records have been taken away by the Central Excise Department and they may be available at Ludhiana and be made available, which fact is an afterthought. Because, if that was so, nothing would have prevented the Petitioner to state so, when the appeal was before the Appellate Authority. But instead, it gave an undertaking to produce the records in order to get over the order impugned in the appeal.
Having come forward with a particular stand, later shifting the stand, taking adjournments on one pretext or the other, not filing objections, approaching this Court for stalling further proceedings, goes to show that the Petitioner has not approached this Court with clean hands. This being an equity jurisdiction, this Court normally decline to go to the aid of a person who has suppressed the true state of affairs and has approached the Court with unclean hands.
The Petitioner has resiled from the undertaking given before the Appellate Authority for oblique and ulterior purpose, in which event, it is not only a case of suppression of facts, but also approaching the Court with unclean hands, which disentitles the Petitioner for any relief under Article 226 of the Constitution of India.
The Act contemplates successive opportunities and forums in the event of assessment. He can even raise such objections if it is open to him to contend so, but suppressing the undertaking, approaching this Court at a premature stage, when no prejudice is caused, speaks of the mind of the Petitioner as to how they have resorted to stall the assessment proceedings. From this angle also, the Petitioner is not entitled to the remedy sought for.
For reasons aforestated, the rule is discharged. The interim order stands dissolved. Both the Writ Petitions are dismissed, subject to the payment of Rs. 5000/- towards cost, to the Respondents.