IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2288  OF 2012 (@ SPECIAL LEAVE PETITION (C)NO.12588 OF 2011)

M/S.ZUNAID ENTERPRISES & ORS.   ... APPELLANTS

VERSUS

STATE OF CHHATTISGARH & ORS.  ... RESPONDENTS

WITH C.A.NOS.2289-2313/2012 @ SLP(C)NOS.13206-13230/2011

WITH C.A.NOS.2314-2332/2012 @ SLP(C)NOS.13721-13739/2011

WITH C.A.NOS.2333-2338/2012 @ SLP(C)NOS.13789-13794/2011

WITH C.A.NOS.2339-2341/2012 @ SLP(C)NOS.13837-13839/2011

WITH C.A.NOS.2342-2362/2012 @ SLP(C)NOS.13848-13868/2011

WITH C.A.NOS.2363-2392/2012 @ SLP(C)NOS.23669-23698/2011

WITH C.A.NOS.2396-2397/2012 @ SLP(C)NOS.19785-19786/2011

WITH C.A.NOS.2398-2406/2012 @ SLP(C)NOS.19470-19478/2011

WITH C.A.NOS.2407-2429/2012 @ SLP(C)NOS.23631-23653/2011

WITH C.A.NO.2430/2012     @ SLP(C)NO. 27388/2011

WITH C.A.NOS.2431-2440/2012 @ SLP(C)NOS.28156-28165/2011

WITH C.A.NOS.2441-2449/2012 @ SLP(C)NOS.29189-29197/2011

WITH C.A.NOS.2450-2453/2012 @ SLP(C)NOS.6980-6983/2012

O R D E R

SLP(C)NOS.13206-13230/2011:

Respondent nos.10-12 are deleted from the array  

of parties, at the risk of the petitioner(s).

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SLP(C)NOS.13721-13739/2011:

Respondent nos.10-12 are deleted from the array  

of parties, at the risk of the petitioner(s).

SLP(C)NOS.13837-13839/2011:

Respondent  no.5  is  deleted  from  the  array  of  

parties, at the risk of the petitioner(s).

SLP(C)NOS.13848-13868/2011:

Respondent nos.13 and 17 are deleted from the  

array of parties, at the risk of the petitioner(s).

SLP(C)NOS.23669-23698/2011:

Respondent nos.5-13 are deleted from the array  

of parties, at the risk of the petitioner(s).

SLP(C)NOS.23631-23653/2011:

Respondent  no.4  is  deleted  from  the  array  of  

parties, at the risk of the petitioner(s).

SLP(C)NOS.28156-28165/2011:

Respondent  no.3  takes  notice  through  learned  

counsel.  Respondent nos.11,12,13,16,17,19,24,27 to  

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30 and 36 are deleted from the array of parties, at  

the risk of the petitioner(s).

SLP(C)NO.27388/2011:

Learned  counsel  appears  and  accepts  notice  on  

behalf of respondent nos.1 to 3.  

SLP(C)NOS.29189-29197/2011:

Learned  counsel  appears  and  accepts  notice  on  

behalf of respondent no.3.  Respondent nos.4 & 5 are  

deleted from the array of parties, at the risk of the  

petitioner(s).

1. Delay condoned in SLP(C)Nos.6980-6983/2012.

2. Leave  granted  in  all  the  Special  Leave  

Petitions.

3. The  Chhattisgarh  State  Minor  Forest  Product  

(Trading  &  Development)  Co-operative  Federation  

Limited ('the Federation' for short) had initiated  

the tender process for sale of Tendu leaves, which  

are minor forest produce.  One of the condition that  

was stipulated in the tender documents was that the  

highest bidder whose bid is accepted, has to remit  

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the taxes under the VAT Act to the State Government.

4. The  appellants  herein  are  successful  bidders.  

When they were demanded to pay the taxes under the  

VAT Act, they thought it fit to approach the High  

Court by filing a petition/appeal under Article 226  

of the Constitution,  inter alia, seeking a writ in  

the nature of mandamus to the respondents/revenue to  

treat the sales, made by the Federation in favour of  

the  appellants  as  purely  inter-state  sale  and,  

therefore, not exigible for the levy of tax under the  

VAT Act.  They had also sought for incidental and  

ancillary prayers in the writ petition.

5. The  High  Court,  after  hearing  the  learned  

counsel for the parties to the lis,   merely  relying  

upon  certain clauses in the tender documents, has  

proceeded to hold that the purchase of tendu leaves  

by the appellants is pursuant to the tender process  

initiated  by  the  Federation  and  in  view  of  a  

particular  clause  in  the  tender  documents,  the  

assessees are liable to be taxed under the VAT Act.  

The reasoning and the conclusions reached by the High  

Court  is  flawed  by  the  appellants  in  these  Civil  

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Appeals.

6. We have heard Shri Ravindra Shrivastava, learned  

senior counsel appearing for the appellants and other  

learned  counsel  appearing  for  other  appellants  in  

these appeals and learned counsel for the State of  

Chhattisgarh.

7. At the outset, we intend to remark that in these  

type  of  cases,  the  High  Court  ought  not  to  have  

entertained the writ petition(s)/writ appeal(s) filed  

under Articles 226/227 of the Constitution. We say so  

for the reason, that, particularly a transaction is  

under  the  Central  Sales  Act,  intra-state  sales  or  

inter-state  sales  are  mixed  questions  of  fact  and  

law. Those facts requires to be brought to the notice  

of the Assessing Authority by the appellants and it  

is  for  the  assessing  authority  to  come  to  a  

conclusion, based on those facts whether a particular  

transaction is intra-state sales which is exigible to  

the taxes under the VAT Act or inter-state sales, as  

envisaged under Section 3 of the Central Sales Tax  

Act read with Section 6 of the charging provisions  

therein.  It is after such adjudication, the matter  

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can travel from one stage to the other as provided  

under the Act.

8. In the instant case, as we have already stated,  

the relevant factors were not before the Court nor  

the  finding  of  the  assessing  authority  to  decide  

whether the transactions in question are intra-state  

sales  or  inter-state  which  are  exigible  to  taxes  

under the VAT Act or taxes under the provisions of  

the Central Sales Tax Act.  Merely based on certain  

clauses in the agreement, in our opinion, the High  

Court ought not to have decided that the transactions  

in question would be  purely and simply inter-state  

sales and not intra-state sales, as contended by the  

appellants, who are dealers in tendu leaves.  In that  

view of the matter, we cannot sustain  the orders  

passed by the High Court.

9. In view of the above, we set aside the orders  

passed  by  the  High  Court  and  now  we  direct  the  

appellants/assessees  in  these  cases  to  file  their  

monthly/annual returns before the assessing authority  

within a month's time   from   today.   We also  

direct the assessing authority to adjudicate upon the  

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returns  so  filed  in  accordance  with  law  after  

affording  opportunity  of  hearing  to  the  

appellants/assessees.   Till  such  proceedings  are  

completed, the assessing authority(s) are restrained  

from  issuing  further  demand  notices  to  the  

appellants/assessees.  We also make it clear that the  

amounts deposited by the appellants/assesses, during  

the  pendency  of  other  writ  petitions/writ  appeals  

before the High Court or during the pendency of the  

Special Leave Petitions before this Court, shall not  

be demanded to be refunded to them.  The assessing  

authority(s)  shall  decide  the  issue  and  shall  

complete the adjudication process within two months'  

time from the date of filing of the returns by the  

assessees, uninfluenced by the observations made by  

the High Court.

10. In such of those cases where the assessees have  

already  filed  their  monthly/annual  returns,  the  

assessing  authority  is  directed  to  complete  the  

assessments, if not already done.  Liberty is also  

reserved  to  the  appellants/assesses  to  file  the  

appeal(s) before the appellate authority within the  

time prescribed under the statute.

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11. The appeals are disposed of accordingly, with no  

order as to costs.

Ordered accordingly.   

...................J. (H.L. DATTU)

...................J. (ANIL R. DAVE)

NEW DELHI; FEBRUARY 23, 2012

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