LIFE INSURANCE CORPORATION OF INDIA versus STATE OF RAJASTHAN AND ORS.

Citation: [2007] 2 S.C.R. 114 · Decided: 01-02-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

A 
LIFE INSURANCE CORPORATION OF INDIA 
v. 
STATE OF RAJASTHAN AND ORS. 
FEBRUARY I, 2007 
B 
[DR. ARIJIT PASA YAT AND S.H. KAPADIA, JJ.] 
Rajasthan Stamp Law (Adaptation) Act, 1952: 
Purchase of stamps from outside State-Causing revenue loss to State 
C Government-Order and notice of demand issued by Additional Collector-
Validity of-Held, since matter is pending consideration of High Court, it 
would be appropriate if the High Court hears the mailer expeditiously 
considering importance of the issues involved regarding permissibility of the 
levy and the manner adopted 
D 
Several divisions of appellant-Corporation in State of Rajasthan 
purchased stamps from the State of Maharashtra. This was said to have caused 
revenue loss to the respondent-State. The Additional Collector accordingly 
issued a notice to the appellant raising the demand. The notice was challenged 
in a writ petition and on its dismissal a special appeal was filed before the 
E Division Bench of the High Court. The High Court disposed of the appeal 
and directed the State Government to constitute a High Power Committee to 
resolve the dispute. The Committee held the Corporation liable to pay the 
State Government a certain amount. The Corporation filed an application for 
revival of the special appeal and the interim order passed therein. Dealing 
F with the said application the High Court held that the demand did not exceed 
the loan advanced by the Corporation to the State Government and the latter 
may adjust the amount of demand against the said loan. 
In the appeal filed by the Corporation it was contended on its behalf that 
the Act did not authorize the demand as made by the respondent-State. On 
G the other hand, for the respondent-State it was contended that purchase of 
stamps from outside the State was against the provisions of the Act, and 
officers of the appellant-Corporation should purchase stamps from the 
Rajasthan treasuries only. 
Disposing of the appeal, the Court 
I-I 
114 
LIFE INSURANCE CORPN. OF INDIA r. ST ATE OF RAJASTHAN [PASAYA T,J.] 
] J 5 
HELD: Since the matter is pending consideration of the High Court it A 
would not be proper for this Court to decide the issues on merits. It would be 
appropriate if the High Court hears the matter expeditiously, considering the 
importance of the issues involved regarding the permissibility of the levy and 
the manner adopted. Needless to say the decision of the High Court shall be 
uninfluenced by the view taken by the High Power Committee. (Para 6 & 7] B 
(116-D-FJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 413 of 2007. 
From the Interlocutory Order dated 23.5.2005 of the High Court of 
Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil M.R.A. No. 204/ C 
2005 in D.B.C.M.A. No. 214/2005 in D.B.S.A. (Writ) No. 670/2004. 
T.R. Andhyarujina and A.V. Rangam for the Appellant. 
Aruneshwar Gupta, A.S.G, Naveen Kumar Singh, Mukul Sood, Shashwat 
Gupta and Shikha Tandon for the Respondents. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASA Y AT, J. I. Leave granted. 
2. Challenge in this appeal is to the order dated 23.5.2005 passed by a 
D 
Division Bench of the Rajasthan High Court, Jaipur Bench. 
E 
3. A brief reference to the factual aspect would suffice. 
The appellant filed the writ petition challenging the order dated 16.9.2004 
and notice dated 16.9.2004 issued by the Additional Collector (Stamps) Jaipur. 
The demand raised by the State of Rajasthan was in respect of alleged F 
revenue loss caused by the appellant to the State Government by its 
purchasing stamps from other State i.e. Maharashtra. The writ petition was 
dismissed by learned Single Judge on the ground of availability of alternative 
remedy. Appellant filed the Special Appeal questioning correctness of the 
order passed by the learned Single Judge. Along with Special Appeal an G 
application for stay was also filed. The Special Appeal was disposed of with 
the direction to the respondent- State to constitute a High Power Committee 
to resolve the dispute. The High Power Committee by its order dated 27 .4.2005 
held that the appellant is liable to pay to the State of Rajasthan a sum of 
Rs.576. 72 lakhs Appellant filed an application for revival of the Special Appeal 
and revival of the interim direction passed in the said appeal. Though initially H 
116 
SUPREME COURT REPORTS 
[2007] 2 S.C.R. 
A the application was dismissed, subsequently the same was revived. Dealing 
with the said a
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