INDIAN OIL CORPORATION LIMITED versus STATE OF U.P. & ORS.

Citation: [2019] 6 S.C.R. 601 · Decided: 22-04-2019 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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INDIAN OIL CORPORATION LIMITED
v.
STATE OF U.P. & ORS.
(Civil Appeal Nos. 3257-3268 of 2019)
APRIL 22, 2019
[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]
Code of Civil Procedure, 1908 – s.11, Explanation IV –
Respondent-State enacted the 2007 Act after the High Court declared
the 2000 Act to be ultra vires inter alia holding that Entry Tax levied
on crude oil does not fulfil the requirements of compensatory tax –
Challenged by the appellant before the High Court – Supreme Court
in Jaiprakash Associates Limited case referred the issue of levy of
Entry Tax in various States enactments including U.P. for
determination by nine Judges Bench – High Court held that the
State did not lack legislative competence in enacting the 2007 Act –
SLP filed by the appellant – Supreme Court passed interim order
staying the operation of the judgment of the High Court inter alia
subject to the appellants in each case depositing 50% of the accrued
tax liability under the 2007 Act – Determination of interest, payable
by the appellant was to be determined subsequently – Nine Judges
Bench decided the reference in Jindal Stainless Limited case –
Thereafter, the matter was taken by the Regular Bench and by
judgment dtd. 21.03.17 Supreme Court granted liberty to the
appellant to question the levy of Entry Tax under the 2007 Act, on
the issues left open in the order of the Nine Judges Bench, before
High Court by way of fresh writ petition – Appellant filed Writ
Petition No.25730 of 17 before the High Court, where assessment
orders were also assailed – Dismissed vide judgment dtd.04.05.18
upholding the validity of the 2007 Act– Demand notices issued–
Challenged by the appellant in so far as demand towards interest
was concerned – Respondents raised preliminary objection that the
writ petition is second writ petition on the same and consequential
cause of action– Dismissed – On appeal, held: Writ Petition
No.25730 of 17 was filed by the appellant in pursuant to the liberty
dtd. 21.03.17 challenging the vires of 2007 Act – s.11, Explanation
IV provides that a plea which might and ought to have been taken
   [2019] 6 S.C.R. 601
601
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
in the earlier suit, shall be deemed to have been taken and decided
against person raising the plea in the subsequent suit – Present is a
case where the plea questioning the leviability of the interest was
specifically raised by the appellant in the Writ Petition No.25730
however, the Division Bench took the view that it was to deal with
the challenge on the grounds as reflected in the judgment dtd.
21.03.17 and thus did not permit the consideration of any other
questions including the question of interest – Issue which was not
expressly permitted to be decided cannot operate as res judicata in
subsequent writ petition where the challenge was to the leviability
of the interest – Further, the High Court de-tagged the writ petition
from the the main bunch where the challenge to levy of interest was
made – High Court committed error in upholding the preliminary
objection of the respondent – Matter remitted to High Court inter
alia for determining the liability of interest – U.P. Tax on Entry of
Goods Ordinance, 2000 – U.P. Tax on Entry of Goods into Local
Areas Act, 2000 – U.P. Tax on Entry of Goods into Local Areas Act,
2007 – ss.4, 9, 10, 12 and 13 – Constitution of India – Arts. 301
and 304.
U.P. Tax on Entry of Goods into Local Areas Act, 2007 – s.13
– Held: Application of provisions of VAT Act is provided by s.13 of
the 2007 Act with certain changes – s.13 mutatis mutandis applies
s.33 of the VAT Act – s.33 has to be applied with respect to payment
and recovery of tax – Thus, the payment of interest which is
contemplated u/s.33 on the amount of tax has to be applied with
regard to the payment of Entry Tax and the interest thereon – Even
if provision of s.33 of VAT Act is to be treated as machinery provision
which is to be applied by virtue of s.13 of 2007 Act, the machinery
provision has to be interpreted in a manner so as to make the liability
effective and treated to be substantive law – Submission of the
appellant that 2007 Act does not contain any substantive law for
levy of the interest, rejected – U.P. Value Added Tax Act, 2008 –
s.33 – Machinery provision when treated as substantive law.
Words & Phrases – ‘mutatis mutandis’ – Meaning of –
Discussed.
Allowing the appeals, the Court
HELD: 1.1 Writ Petition No.25730 of 2017 was filed by the
appell

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