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Sadhawal Enterprises, Delhi v. State Of U.P. & Others - WRIT TAX No. 20 of 2001 [2006] RD-AH 16816 (25 September 2006)


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Civil Misc. Writ Petition No. 20 of  2001

Sadhawal Enterprises v. State of U.P. and others.

Hon'ble R.K.Agrawal, J.

Hon'ble Vikram Nath, J.

(Delivered by R.K.Agrawal, J.)

By means of the present writ petition filed under Article 226 of the Constitution of India, petitioner, Sadhawal Enterprises, seeks the following reliefs:

"i)   issue a writ order or direction in the nature of mandamus commanding respondent no.3 to refund the excess deposit of Rs.1,71,000/- to the petitioner along with interest due thereon from the date of deposit.

ii) issue any other writ, order or direction which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case.

iv)     award the costs of the petition to petitioner."

Briefly stated the facts giving rise to the present petition are as follows:

According to the petitioner, it carries on the business in non-ferrous metals at Delhi.   It is not engaged in carrying on business of buying or selling in the State of Uttar Pradesh.  In the course of its business it had purchased 9.55 metric tonne (53 bundles) of copper wire from Nepal and was transporting it in Truck No.UP 53-J/5648. The vehicle entered the State of U.P. at Tumkuhi Raj  check post, Deoria and the truck driver was issued a transit pass in Form 34 prescribed under Section 28-B of the U.P. Trade Tax Act, 1948, hereinafter referred to as 'the Act',  for transportation of the aforesaid goods to Delhi through exit  check post at Transport Nagar, Sahayata Kendra, Ghaziabad. The form was applied on 10th April, 1999. The Officer Incharge of Tumkuhi Raj entry check-post, Deoria after verifying the consignment and accompanying documents issued the Form No.34 specifying  therein that the consignment would  go out of the State of Uttar Pradesh through Transport Nagar Sahayata Kendra, Ghaziabad by 13th July, 1999.  The vehicle reached at the Transport Nagar, Ghaziabad check-post in the night of 13th July, 1999  and after verification of the goods and accompanying documents the Officer Incharge of the said check post made necessary endorsement on the transit pass in Form 34 and the vehicle was permitted to go out of the State of Uttar Pradesh. However, according to the petitioner, before proceeding further the truck was taken to the godown of the transporter, situated beyond the Transport Nagar, check post of Uttar Pradesh Delhi border. On account of some unforeseen circumstances, the driver of the said truck instead of going to Delhi moved towards Ghaziabad by taking a wrong route and the moment the mistake was detected it started moving on the road towards Delhi. However, it was stopped at the Transport Nagar check post and on suspicion that the goods were being taken to Ghaziabad from Delhi the consignment was seized under Section 28-A of the Act. The seizure order was passed on 20th July, 1999 seizing goods with a direction that it can be got released on furnishing cash security of Rs.3,04,000/-.  The petitioner preferred a representation under proviso to Section 13-A(6) of the Act before the Assistant Commissioner (Pravartan), Trade Tax, Ghaziabad, who modified the seizure order by directing the petitioner to furnish bank guarantee for Rs.1,71,000/- and an indemnity bond for the balance amount of Rs.1,33,000/-. The petitioner furnished the requisite security in the forms of bank guarantee and indemnity bond reserving his right to file an appeal.  The petitioner preferred an appeal before the Trade Tax Tribunal, Ghaziabad, hereinafter referred to as 'the Tribunal' ,  which directed that the goods be released on furnishing indemnity bond for the entire amount of Rs.3,04,000/-. The Tribunal further directed that in case it was proved that the goods had eventually reached Delhi, the indemnity bond furnished by the petitioner would ipso facto become inoperative. The consequence of the order passed by the Tribunal on 15.1.2000, according to the petitioner, was that the bank guarantee furnished by the petitioner also became redundant and was liable to be discharged. The penalty proceedings under Section 15-A(1)(o) of the Act were initiated by the Trade Tax Officer, Sector-I, Ghaziabad, respondent no.3,  and vide order dated 20th January, 2000 a penalty of Rs.27,80,000/- was imposed.  The bank guarantee of Rs.1,71,000/- was got encashed on 25th February, 2000.  The penalty order was subject matter of appeal before the Deputy Commissioner(Appeals), Trade Tax, Ghaziabad, who vide order dated 20th March, 2000 quashed the penalty.  The amount of Rs.1,71,000/- as a result of encashment of the bank guarantee became refundable to the petitioner.   The petitioner vide letter dated 17th April, 2000 requested the respondent no.3 to refund the sum of Rs.1,71,000/-. When no action was taken, the petitioner sent reminders dated 7th August, 2000, 25th August, 2000 and 30th October, 2000 but without any success. It may be mentioned here that against the order of Deputy Commissioner(Appeals), Ghaziabad dated 20th March, 2000 quashing the penalty, the Commissioner, Trade Tax, Uttar Pradesh, had filed an appeal before the Tribunal but as no application for interim relief was filed, the petitioner is claiming refund of the aforesaid amount of Rs.1,71,000/- along with interest.

In the counter affidavit filed by Kamla Prasad, Trade Tax Officer, Sector-1, Ghaziabad on behalf of respondent no.3, it has been stated that the sum of Rs.1,71,000/- has already been refunded to the petitioner and it has received the refund voucher for the same on 26.5.2001 and now no cause of action survives. He further submitted that office of the Trade Tax Officer, Ghaziabad was not aware whether the bank guarantee was encashed or not. The correspondence took place between two officers, namely, Trade Tax Officer, Sector-1, Ghaziabad and Trade Tax Officer (Mobile Squad) II Unit, Ghaziabad and vide letter dated 22nd March, 2005, Trade Tax Officer(Mobile Squad) informed the Trade Tax Officer, Sector-1, Ghaziabad that the bank guarantee was encashed on 6th March, 2000 whereupon immediately a refund voucher was prepared and the same was sent to the Deputy Commissioner(Administration), Trade Tax, Ghaziabad for countersigning, which was received back on 14th May, 2001 and was handed over to the petitioner on 26th May, 2001. Thus, the question of payment of interest does not arise.

We have heard Sri Kunwar Saxena, learned counsel for the petitioner and Sri M.R. Jaiswal, learned Standing Counsel appearing for the respondents.

Learned counsel for the petitioner submitted that it is not in dispute that the bank guarantee for Rs.1,71,000/- was got encashed by respondent no.2 under the directions of respondent no.3 on 6th March, 2000 pursuant to the order of penalty dated 20th January, 2000 in which a huge sum of Rs.27,80,000/- was imposed as penalty. The said order was set aside by the Deputy Commissioner(Appeals) on 20th March, 2000.  The petitioner had communicated the order dated 20th March, 2000 passed by the Deputy Commissioner (Appeals) vide application dated 28th April, 2000. As the Deputy Commissioner (Appeals) while allowing the appeal had not only set aside the penalty order but also the provisional assessment order and had directed that the refund of the amount deposited, if any be made,  the amount of Rs.1,71,000/- which had been realised by the respondent no.3  by encashment of the bank guarantee, became refundable to the petitioner in terms of the order dated 20th March, 2000 and as it was not refunded within three months from 28th April, 2000, the respondents are liable to pay interest at the rate of 18% per annum from 28th April, 2000 till the date of actual refund i.e. 26th May, 2001.

Sri M.R. Jaiswal on the other hand submitted that the process of verification of the deposit and encashment of the bank guarantee actually took  time and the moment the Trade Tax Officer(Mobile Squad) informed the respondent no.3 on 22nd March, 2001, the refund voucher was prepared, got countersigned and the amount was refunded within three months from that date i.e. 22nd March, 2001. Thus, there is no liability of payment of interest.

We have given our anxious consideration to the various pleas raised by the learned counsel for the parties. We find that in Civil Misc. Writ Petition (Tax) No.17 of 2001, M/s. Technical Construction Company, Muzaffarnagar v. Trade Tax Officer, Sector-1, Muzaffarnagar and others, decided today we have held that the statute takes care of the situation and gives sufficient time to the Department to verify the claim of deposit and that is why a period of three months has been provided under sub-section (2) of Section 29 of the Act. For the reasons given in the aforesaid decision, we are of the considered opinion that inasmuch as the respondent No.3 has not refunded the amount of Rs.1,71,000/- within the period of three months from the date of communication of the order i.e. 28th April, 2000, they are liable to pay interest at the rate of 18% per annum from 28th April, 2000 till 26th May, 2001.

In view of the aforesaid discussion, the writ petition succeeds and is allowed in part and a writ of mandamus is issued to respondent no.3 to pay the interest at the rate of 18% per annum on the sum of Rs.1,71,000/- for the period from 28th April, 2000 to 26th May, 2001 within thirty days from the date a certified copy of this order is filed before the respondent no.3.

On the facts and circumstances of the case the parties are directed to bear their own costs.




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