M/S Murugan Agencies v State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM** ## **TUESDAY, THE 29TH DAY OF JANUARY 2013/9TH MAGHA 1934** ## **WP(C).No. 17385 of 2008 (T)** **---------------------------** **PETITIONER(S) :** **M/S.MURUGAN AGENCIES, D.NO.59/1348-A, GROUND FLOOR, ARANGATH ROAD, COCHIN- 682 018 RESPRESENTED BY ITS PROPRIETOR SRI.PRAKASHKUMAR CHOWDHARY.** **BY ADVS.SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR** **RESPONDENT(S) :** **1. STATE OF KERALA REPRESENTED BY SECRETARY (TAXES), SECRETARIAT, THIRUVANANTHAPURAM.** ## **2. DEPUTY COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM.** **3. SALES TAX OFFICER, OFFICE OF DEPUTY COMMISSIONER, THEVARA.** ## **R1 TO 3 BY SPECILA GOVERNMENT PLEADER DR. SEBASTIAN CHAMPAPPELLY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29-01-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **BP** ## **WP(C).No. 17385 of 2008 (T)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** - **P1: COPY OF THE LETTER DT 11/3/1997 ISSUED BY THE R2.** - **P2: COPY OF THE LETTER DT.8/10/1998, ISSUED BY THE R2.** - **P3: COPY OF THE LETTER DT15/11/1999, ISSUED BY THE R2.** - **P4: COPY OF THE LETTER DT 9/10/2000, ISSUED BY THE R2.** - **P5: COPY OF THE LETTER DT 15/2/2001, ISSUED BY THE R2.** - **P6: COPY OF THE PAYMENT DETAILS.** - **P7: COPY OF THE LEGAL NOTICE DT 24/6/2002 SENT ON BEHALF OF THE PETITIONER.** - **P8: COPY OF THE LETTER DT 28/6/2002 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER** - **P9: COPY OF THE JUDGMENT OF THE SUPREME COURT DT 22/2/2007 IN CIVIL APPEAL 391/2002.** - **P10: COPY OF THE LETTER DT 7/8/2007 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **P11: COPY OF THE LETTER DT 30/8/2007 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER** - **P12: COPY OF THE LETTER DT 18/10/2007 ISSUED BY THE PETITIONER TO THE R3.** - **P13: COPY OF THE LETTER DT 25/10/2007 ISSUED BY THE R3 TO THE PETITIONER** - **P14: COPY OF THE LETTER DT 17/12/2007 ISSUED BY THE PETITIONER TO THE R3 .** - **P15: COPY OF THE LETTER DT 21/1/2008 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER** ## **RESPONDENT'S EXHIBITS : NIL.** **//TRUE COPY//** ## **P.A. TO JDUGE** C.K.ABDUL REHIM,J. --------------------------------WP(C).NO. 17385 of 2008 --------------------------------Dated this the 29th day of January, 2013 ## JUDGMENT The petitioner is challenging Exts.P13 and P15 orders through which their claim for refund of the luxury tax paid was declined. Petitioner is a dealer in tobacco products. He had challenged the liability for payment of luxury tax under the Kerala Tax on Luxuries Act, 1976 by filing OP.No.2190/1995 before this court. An interim order was issued in that case on 10.2.1995 directing the petitioner to file returns under the Act and to furnish Bank Guarantee with respect to the tax amount due. Petitioner was filing returns and furnishing Bank Guarantee on the basis of the interim order. While so, the 2[nd] respondent had issued various letters as evidenced from Exts.P1 to P5, requesting the petitioner to make payment of tax instead of furnishing Bank Guarantee, considering the financial position of the State. In the said letters it was assured that on the event of the case being decided in favour of the petitioner, he can claim refund. In one of such letters (Ext.P5) it is specifically mentioned that, _“you are_ WP(C).17385 /2008 2 _also assured that the amount thus remitted by you shall be fully refunded if the final verdict in the cases filed by you before the Hon'ble Court is in your favour.”_ According to the petitioner, a total amount of Rs.11,24,92,135/- was paid on the basis of Exts.P1 to P5 letters, for the period from January 1995 to May 2001. OP.No.2190/95 was allowed by this court striking down the relevant provisions and holding that the petitioner is not liable to pay tax under the Act for the sale of tobacco products. A writ appeal filed by the State was also dismissed. Ultimately the matter was taken up before the Hon'ble Supreme Court. By Ext.P9 judgment following the decision in **Godfrey Philips India Ltd. and another vs. State of U.P and others (2005 (2) SCC 515),** the Civil Appeal was dismissed. The petitioner made various claims for refund of the amounts remitted. The claim was declined through Ext.P13 stating that the Hon'ble Supreme Court while striking down the impugned provision observed that it is not appropriate to allow any refund of tax already paid. The petitioner is challenging the said decision taken by the 3[rd] respondent declining the refund. WP(C).17385 /2008 3 2. Learned counsel for the petitioner contended that the amounts were paid in lieu of Bank Guarantee which was permitted by this court through the interim order. Further contention is that the amounts were paid only on the basis of Exts.P1 to P5 requests, on the specific undertaking to refund the same, if the final verdict is in favour of the petitioner. It is also contended that the judgment in **Godfrey's** case (cited supra) is not fully applicable since the liability of the petitioner has been determined finally through Ext.P9. Hence the petitioner seeks direction for effecting refund. 3. Learned Special Government Pleader had raised arguments pointing out the observations contained in **Godfrey Philip's** case. The Hon'ble Supreme Court following the principles in **Somalya Organics (India) Ltd. vs. State of U.P (2001 (5) SCC 519** observed that, “while striking down the impugned Acts we do not think it appropriate to allow any refund of taxes already paid under the impugned Acts. Bank Guarantee if any furnished by the assessee will stand discharged “. The above observations contained in para 93 of the judgment in WP(C).17385 /2008 4 **Godfrey's** case is made applicable totally on the facts of the case disposed through Ext.P9 judgment. Therefore it is evident that observations/directions contained in **Godfrey's** case with respect to refund is equally applicable to the petitioner. It is pertinent to note that the Supreme Court in **Godfrey's** case observed that if the appellants have collected any amount towards luxury tax from consumers/customers after obtaining interim orders from this court, they will pay the said amounts to the respective State Governments. 4. Contention of learned counsel for the petitioner is that, despite the observations contained in **Godfrey's** case, which was adopted in Ext.P9 judgment, the petitioner is entitled to get refund on the basis of the specific assurance made by the 2[nd] respondent in Exts.P1 to P5. He had also raised a contention that the payment made is in lieu of Bank Guarantee and since the Hon'ble Supreme Court has directed release of Bank Guarantee, the petitioner is entitled for the refund claimed. The above contentions could not be accepted, because the judgment of this court in OP.2190/95 got ultimately merged with Ext.P9 judgment. WP(C).17385 /2008 5 In Ext.P9 it is observed that the judgment in **Godfrey's case** has to be applied in the present case, including the direction given by the Supreme Court in paras 93, 94 and 95. Hence the direction contained in **Godfrey's case** restraining refund of tax already paid will be equally applicable in the case of the petitioner. Contention that the payment is made in lieu of Bank Guarantee cannot be accepted. The amounts were paid towards the liability of the tax covered by the returns filed. It is the payment of tax amount already collected. So it assumes all the characteristics of tax already paid as mentioned in para 93 of **Godfrey's** case. 5. Under the above mentioned circumstances, I do not find any justification to hold that the petitioner is entitled to get refund, drawing any distinguishment from orders issued by the Hon'ble Supreme Court restraining refund of the tax already paid. Hence the writ petition fails and the same is accordingly dismissed. C.K.ABDUL REHIM, JUDGE pmn/ WP(C).17385 /2008 6 WP(C).17385 /2008 7