HINDUSTAN VEGETABLE OILS CORPORATION LTD. versus PROGRESSIVE INDUSTRIES AND OTHERS ETC.

Citation: [1995] SUPP. 3 S.C.R. 386 · Decided: 07-09-1995 · Supreme Court of India · Bench: B.P. JEEVAN REDDY, M.K. MUKHERJEE · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
HINDUSTAN VEGETABLE OILS CORPORATION LTD. 
v. 
PROGRESSIVE INDUSTRIES AND OTHERS ETC. 
SEPTEMBER 7, 1995 
B 
[B.P. JEEVAN REDDY AND M.K. MUKHERJEE, JJ.] 
U.P. Sales TaxAct/U.P. Sales Tax Rules-Section 4B/Rule 25B-Decla-
ration F onns agreed to be provided for purchase of raw mate1ial for manuf ac-
turing notified goods intended to be sold within the State or in the course of 
C 
inter-State Trade or commerce or in the course of exp01t out of India-Not to be 
extended to cases other than sale and for raw materials used for st01ing pur-
poses. 
Sections 6 & Section 22-Ganesh Flour Mills Company Ltd. (Acquisi-
tion and Transfer of Undenakings Act),. 1984-Contract between Ganesh 
D Flour Mills and the Respondent selling dealers-Not liable to be honoured by 
the appellant buying dealers (in whom the Ganesh Flour Mills have vested) 
prior to the date of vesting unless the contract is ratified within 30 days from 
the appointed day. 
E 
F 
As per Section 4-B of the U.P. Sales Tax Act, and Rule 25-B of the U.P. 
Sales Tax Rules, Ganesh Flour Mills which was a manufacturer of notified 
. goods obtained recognition certificate and applied for declaration Form 
111-B for concession in the rate of Sales Tax. Ganesh Flour Mills was sub-
sequently taken over by the Central Government and came to be vested in the 
Appellant corporation. 
The appellant Corporation had also obtained recognition certificate. 
Both Ganesh Flour Mills and the Appellant had purchased raw materials 
viz. tins for packing Vanaspati from the Respondents against Declaration 
Form llI-B. They were not only engaged in manufacturing Vanaspati by 
themselves but were also undertakingjob works and part of the Vanaspati in 
G tins was also sent to other States on consignment basis, i.e., without effecting 
sale within the State of U.P. 
The appellant could not issue Declaration Form 111-B in respect of 
those tins which were not sold within U.P. or those tins which were used for 
storing other Vanaspati. The Assessing Authorities accordingly levied tax 
. H at the full rate on the selling dealers and also levied interest on those sales 
386 
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HINDU ST AN VEG. OILS CORPN. LTD. v. PROGRESSIVE INDS. 
387 
for which no declaration forms were produced. Penalty proceedings were A 
also initiated against the selling dealers. 
In a writ petition filed by the selling dealers (Respondents) for 
directing the appellants to issue Declaration Form 111-B for both the 
periods viz. before vesting and after vesting of Ganesh Flour Mills Com-
pany, the High Court directed the appellant to furnish declaration forms B 
for both the periods. 
On Appeal the appellant contended that - (a) no mandamus ought 
to have been issued by the High Court compelling the appellant to issue 
declaration Forms, in respect of tins utilised for purposes other than those C 
permitted by law since it would expose them to penalties under the U.P. 
Sales Tax Act; 
(b) That in such a case, the appellant could have been directed to 
reimburse the tax levied upon the respondents for the period after 
23.4.1984. However they can not be made liable to reimburse the interest D 
and penalty; and 
(c) The appellant cannot be held responsible for any of the acts, 
defaults or liabilities for the period prior to acquisition i.e. 23.4.1984. 
Allowing the appeal in part, this Court 
HELD: 1. That with respect to the period subsequent to 23.4.1984 it 
was not open to the Appellant to refuse to issue Declaration Forms on the 
plea that they have used the tins for purposes other than those mentioned 
in Section 4(B) (2) of U.P. Sales Tax Act. However, the direction given by 
the High Court could be modified to the extent that, if the appellan~ could 
not produce Declaration Form 111-B, they ought to reimburse the respon-
dents (selling dealers) the entire amount of tax which the respondents were 
made to pay as also for the interest and penalties paid by them. [ 400-E] 
E 
F 
2. With respect to period prior to 23.4.1984 the Appellant Company G 
is not liable since the contract between Ganesh Flour Mills and the 
respondent had not been ratified by the Central Government within 30 
days from the appointed day as required under section 22 of the Act of 
1984. [402-F-G] 
3. Since the writ petitions did not challenge the omission of Central H 
388 
SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R. 
A 
Government to ratify the contract there is no need for any discussion in 
regard to proviso to Section 22 of the Act of 1984, 

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