# M/s Swarup Industries & another v. State of U.P. & others

- **Citation:** (2001) 1 ILRA 20
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2001
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-swarup-industries-another-v-state-of-u-p-others-39700
- **Pages:** 4

## Text

20 INDIAN LAW REPORTS ALLAHABAD SERIES [2001
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By the Court

1. Heard Sri Bharatji Agarwal
learned counsel for the petitioner and the
learned Standing Counsel.

2. The petitioner no. 1 is a registered
partnership firm of which petitioner no. 2
is one of the partners. The petitioner no. 1
is a registered under both U.P. and
Central Sales Tax Act. The petitioner firm
is carrying on the business of manufacture
and sale of R.C.C. Spun Pipes and Collars
etc. These goods are manufactured and
sold
by
the
petitioner
to
various
government departments including the
Public Works Department, Sharda Nahar
Samadesh, Lucknow and also to the Chief
Development
Officer
Bareilly/
Lakhimpur-Kheri/
Shahjahanpur/
Moradabad.

3. For the relevant assessment years
1990-91 to 1993-94 the petitioner sold the
R.C.C.
Spun
Pipes
and
collars
manufactured
by
them
to
various
government
departments.
In
all
the
invoices/bills raised by the petitioner
against these government departments it
is mentioned that the sales are against
form III-D. Since the petitioner made
sales to Government Departments it
charged concessional rate of tax at the
rate of 4% plus surcharge. In paragraph 7
of the petition it has been held that the
petitioners have been writing regularly to
all these government departments to
which
it
made sales including the
departments of respondents 3 to 5 to issue
form III-D but in spite of the best efforts
forms III-D were not given by the
Departments of respondents 3 to 5. A
summary list of sales made by the
petitioner in the State of U.P. for the
relevant assessment years against form III
D has been annexed as Annexure1 to the
writ petition. The petitioner sent several
reminders
to
the
Departments
of
respondents 3 to 5 but despite that form
III D were not issued to the petition.
1All] M/s Swarup Industries & another V. State of U.P. & others
21
4. In this connection reference may
be made to Section 3-G(1)j of the U.P.
Trade Tax Act which reads as follows:

"3-G Special rate of tax on certain sales
(1) Notwithstanding anything contained in
section 3-A or section 3-D or Section 3-F
and subject to the provisions of subsection (2) and such conditions and
restrictions, if any, as may be specified by
the State Government, by notification, tax
on the turnover of sales of goods to a
department of the Central Government or
of a State Government or to a Corporation
or undertaking established or constituted
by or under a Central Act or an Uttar
Pradesh
Act,
or
to a Government
Company as defined in section 617 of the
Companies Act, 1956 (not being a Nagar
Nigam, Nagar Palika Parishad, Zila
Panchayat, Nagar Panchayat, Cantonment
Board, a University or an educational
institution or an institution managed for
the
time
being
by
an
authorised
controller) shall , if the dealer furnishes to
the
assessing authority a certificate
obtained from such department or a
declaration
obtained
from
such
Corporation, Undertaking or Company in
such form and manner and within such
period as may be prescribed, be levied
and paid at the rate for the time being
specified in sub-section (1) of section 8 of
the Central Sales Tax Act, 1956, or at
such rate as the State Government may,
by notification, specify in relation to any
sales, unless the goods are taxable under
any other section of this Act at a rate
lower than the said rate."

5. The above provision indicates that
when
a
person
makes
sale
to
a
government department it is entitled to get
form III-D.

Section 8-A (2-b) of U.P. Trade Tax
Act states as follows:
"Where trade tax on sale of goods is
payable on any turnover by a dealer
(including a commission agent or any of
the persons mentioned in the explanation
to clause (c) of Section 2 registered under
this Act, such a dealer may recover an
amount, equivalent to the amount of trade
tax on sale of goods payable, from the
person to whom the goods are sold by
him. Whether on his own behalf or an
behalf of his principal."

6. The above provision indicates that
when trade tax is payable by a dealer it
can recover the amount from the person to
whom goods are sold. Since sales were
made to the government departments
which were covered by Section3-G the
petitioner can realise the tax only at the
rate of 4% plus surcharge, since all such
sales were made against form III-D,
which were to be supplied by the
departments of respondents 3j to 5 to the
petitioner.

7. In paragraph 14 and 15j of the
writ petition it is alleged that in view of
Section 15-A (1) (qq) of U.P. Trade Tax
Act the petitioner could not have realised
tax from these department in excess of
three times of the tax in excess of 4%
other wise the petitioner would have been
liable to penalty to the extent of three
times of the tax in excess of 4%. In
paragraph 17 of the writ petition it is
alleged that the petitioner made several
reminders to the departments concerned
to issue form III-D to the petitioner but
the same were not issued, with the result
that a huge illegal liability is being
created against the petitioner by the Trade
Tax
Officer,
Sector
3,
Bareilly,
respondent no. 2, True copies of the
22 INDIAN LAW REPORTS ALLAHABAD SERIES [2001
reminders are annexed as Annexures 2, 3
and 4 to the writ petition. In paragraph 19
of the writ petition it is alleged that
despite these reminders neither forms IIID were supplied nor any reply sent by
these Departments. In paragraph 20 of the
writ petition it is alleged that in view of
non-issuance of form III-D a huge illegal
liability has been created against the
petitioner for the assessment years 199091 to 1993-94. In paragraph 21 of the
writ petition it is alleged that petitioner
has filed appeal against the assessment
order but the appellate authority is not
admitting the appeal unless the tax
assessed on account of non-furnishing of
forms III-D is deposited by the petitioner
which the respondent no. 6 is treating as
the admitted tax for the purpose of filing
of ;the appeals.

8. Learned counsel for the petitioner
has relied on the decision of this Court in
M/s Tracto Auto Industries Pvt. Ltd. vs.
Union of India and others 1991(1) UPTC
241 where it has been held that there is
statutory
obligation
cast
upon
the
purchasing dealer to issue the declaration
forms to the selling dealer where the
purchases were made against form III-B.
He has also relied on the decision in M/s
G.G. Industries Pvt. Ltd. vs. Union of
India 1994 (2) UPTC 1032 and on the
decision of M/s Garg Plastics, Kanpur vs.
Pradeshiya Co-operative Dairy Federation
Ltd. 1995 UPTC 513 to the same effect.
Copies of these judgments have been
annexed as Annexure 5,6 and 7 to the writ
petition. In M/s Huma Pipes vs. State of
U.P., writ petition no. 857 of 1995
decided on 11.7.1997 a division bench of
this Court directed that forms III-D be
issued to the petitioner in respect of sales
to government departments.
9. A counter affidavit has been filed
and in paragraph 6 of the same it has been
alleged that assessee could have charged
the standard rate of tax from government
departments who had not issued form IIID. In paragraph 10 of the counter affidavit
it is alleged that in the absence of form
III-D the tax liability as ascertained by the
assessing authority is correct.

10. A rejoinder affidavit has been
filed. In paragraph 3 of the rejoinder
affidavit it is stated that respondent no. 4
the Chief Administrator, Sharda Nahar
Samadesh Lucknow has issued forms IIID after the filing of the present writ
petition when notices were served on
respondent no. 4 as per the list enclosed
as Annexure C.A. 1 to the counter
affidavit. However, in respect of sales
made
by
the
petitioner during the
assessment year 1990-91 the respondent
no. 4 has not issued form III-D to the
petitioner. A complete list of the bill
number, date and the sales made to the
respondent no. 4 during the assessment
year 1990-91 is Annexure R.A. 1 to the
rejoinder affidavit.

11. As regards respondents 3 and 5
it is alleged in paragraph 4 of the
rejoinder affidavit that they have not
issued the requisite forms III-D for the
assessment year 1990-91j to 1993-94. No
counter affidavit has been filed on behalf
of the respondents 3 and 5, and they have
not issued form III-D to the petitioner so
far. The petitioner did not realise any tax
in excess of 4% from respondents 3 and 5
since they were sales to government
departments. A complete list of sale made
by the petitioner to the respondent no. 5
giving the full details is Annexure R.A,3.
1All] Km. Meenakshi Agrawal & others V. State of U.P. & others
23
12. In our opinion, the stand taken
by the respondent in the counter affidavit
is wholly misconceived and not valid.
When a sale is made to a Government
department in our opinion form III-D has
to be issued to the selling dealer in view
of section 3 G. This is a statutory duty and
in our opinion the ratio of the decisions in
M/s Tracto Auto Industries Pvt. Ltd.
(Supra), M/s G.G. Industries Pvt. Ltd.
(supra) and M/s Garg Plastics (supra) and
M/s R.S. Huma Pipes (supra) squarely
apply to the facts of the present case also.

13. No doubt section 3-G does not
expressly mention that form III-D has to
be issued by the government department
to the seller, but in our opinion this duty is
clearly implied by section 3-G. In modern
Proteins Ltd. vs. Food Corporation of
India, 1983 (52) S.T.C. the Andhra
Pradesh High Court held that even though
there is no express provision imposing a
statutory
obligation
upon
the
Food
Corporation to issue form C there is an
implied obligation to issue such forms.
The Court held 'when the Act envisages
that only a tax of 4% is leviable in the
case of inter State Sales and not 10%
under the A.P. General Sales Tax Act, and
entitles the registered dealer to pay this
concessional rate of tax and prescribes the
mode by which he can claim the
concessional rate, it could not have been
the intention of the legislature to defeat
this provision at the sweet will and
pleasure of the purchaser of the goods.'
We are in respectful agreement with this
decision.
14. Similarly, in Hirdey Narain vs.
I.T.O. A.I.R. 1971 S.C. 33 the Supreme
Court observed; If a statute invests a
public officer with authority to do an act
in a specified set of circumstances, it is
imperative upon him to exercise his
authority in a manner appropriate to the
case when a party interested and having a
right to apply moves in that behalf and
circumstances for exercise of authority
are shown to exist. Even if the words used
in the statute are prima facie enabling the
Courts will readily infer a duty to exercise
power which is invested in aid of
enforcement of a right- public or private-
of a citizen'. The Supreme Court relied on
the decision of the House of Lords in
Julius vs. Bishop of oxford (1980) 5 A.C.
214 for the proposition that a power is
often coupled with an implied duty, and
such
duty
can
be enforced by a
mandamus. This view has also been taken
by the Supreme Court in Comptroller and
Auditor General of India vs. K.S.
Jagannathan, AIR 1997 SC 537.
15. Hence in our opinion section 3G imposes a duty on the government
departments to issue form III-D to the
seller whenever sales are made to it.

16. The writ petition is hence
allowed and a mandamus is issued to the
respondents 3 to 5 to issue forms III-D to
the petitioner for the relevant assessment
years as prayed for within one month of
production of a certified copy of this
order before the authority concerned.

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