Yashwant Co-Op. Processors
Ltd. Etc. Vs. Union of India & Ors.  INSC 1941 (12 November 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6663 OF 2008 (Arising
out of S.L.P.(C) No.10272/2007) Yashwant Co-op. Processors Ltd. Etc.
...Appellant(s) Versus Union of India & Ors. ...Respondent(s)
claim that they are engaged in the business activity of bleaching, dyeing and
processing of grey fabrics. They claim that such grey fabrics are supplied to
them by power loom industries for job-work.
They were called upon
to furnish Return in Form A and Form B of Textiles Committee (Cess) Rules, 1975
on the basis that they undertook work of manufacturing, that what they
(appellants) called as job-work was in fact a process of manufacturing and,
consequently, they (appellants) were liable to pay cess under the provisions of
the Textiles Committee (Cess) Act, 1963.
amongst several questions, which arises for determination, the main question
is: whether the process undertaken by the appellants constituted manufacture or
processing, whether the 2 appellants were job-workers or manufacturers and
whether, consequently, the appellants were liable to pay cess under the
Textiles Committee (Cess) Act read with Textiles Committee (Cess) Rules? It may
also be mentioned that the method of quantification and liability also arises
for determination. Consequently, the meaning of the words "value of
textiles" used in the Act/Rules is also required to be decided.
coming to the impugned judgment, we may state that the above questions arose
before the Bombay High Court in a batch of writ petitions, whose particulars
are given in Chart-I hereinbelow, which writ petitions came to be disposed of
by the Division Bench vide its Order dated 18.4.2007 (impugned order). These
writ petitions covered the period between December, 1998 to December, 2000. It
appears that there were twelve writ petitions before the High Court. They were
filed by twelve independent processing companies/firms. We annex Chart- I
Chart - I Demand for
the period December, 1998 to December, 2000 which is the subject matter of the
writ petitions whose numbers are given in the chart below:
S. Name of the
Petitioner WP No. Amount No. Demanded
1. Yashwant Co-op.
Processors Ltd. 2959/07 3,15,837.00
2. Radha Kanhaiya
Textile Processors 2909/07 1,45,620.50 Ltd.
3. Mahesh Textile
Processors 2910/07 2,13,833.00
4. Unirose Textile
Processors Pvt. Ltd. 2927/07 2,69,180.00
5. Radha Mohan
Processors 2930/07 2,04,934.50
Synthetics Pvt. Ltd. 2928/07 1,96,568.00
7. Balaji Dyeing
& Bleaching Mills 2929/07 1,92,061.50
8. Manpasand Textile
Processors Pvt. 2951/07 2,04,441.00 Ltd.
9. Jubilee Fabrics
Pvt. Ltd. 2960/07 1,40,455.00
10. Swastik Dyeing
& Bleaching 2922/07 3,30,364.50
11. Amit Weaving
12. Arihant Yarn
Processors 2953/07 2,01,356.00
for the period 2001-02 to 2002-03, the appellants who were given show cause
notice(s) did not file their monthly Returns under Rule 4 of the Textiles
Committee (Cess) Rules, 1975. Consequently, ex parte assessment order came to
be passed. Since appellants failed to pay cess, each of them was served with
notice of demand under Rule 7 of the Textiles Committee (Cess) Rules, 1975 on
the basis of ex parte assessment orders (best judgment assessment). The
particulars of such cases are given hereinbelow in Chart-II:
Chart - II Demand for
the periods 2001-02 to 2002-03 which is covered by Notice(s) of demand served
upon the Assessees who failed to submit monthly Returns:
S. Name of the
Assessee Notice of Period Amount No. Demand Outstanding dated
1. Shantinath 30.10.03
01-02 139097.50 Synthetics Pvt. 02-03 79442.50 2,18,540.00 Ltd.
2. Mahesh Textiles
30.10.03 01-02 196768.50 Processors 02-03 123624.00 3,20,393.00
3. Unirose Textile
30.10.03 01-02 172394.00 Processors Pvt. 02-03 23645.50 1,96,040.00 Ltd.
30.10.03 01-02 77137.50 Processors 02-03 29060.00 1,06,198.00
5. Shri Balaji Dyeing
30.10.03 01-02 39767.00 & Bleaching Mills 02-03 48145.00 87,912.00
6. Manpasand 08.12.05
01-02 to Textile Processors 02-03 1,14,878.50 Pvt. Ltd.
7. Jubilee Fabrics 28.01.04
01-02 142201.00 Pvt. Ltd. 02-03 48011.00 1,90,212.00
30.10.03 01-02 18071.00 Textiles 02-03 21591.50 39,663.00 Processors Ltd.
the impugned Order dated 18.4.2007, the High Court dismissed the above writ
petitions on the ground of delay, hence, this civil appeal.
may state at the outset that although we do not find error in the judgment of
the High Court in dismissing the writ petitions on the ground of delay, since
the appellants on instructions have agreed to discharge their outstanding
liabilities without prejudice to their rights and contentions in the writ
petitions and since interpretation of the Textiles Committee Act/ Rules is
involved, we are inclined to restore the above writ petitions on the file of
the Bombay High Court subject to the appellants satisfying the following
conditions so that the Department earns its revenue:
(i) In Chart-I we
have furnished the names of the appellants who are 5 the petitioners and the
amount outstanding against their names.
Each of the
appellants shall deposit with the Department the outstanding amount shown
against its name within eight weeks from today.
(ii) Each of the
appellants whose name appears in Chart-II (who incidentally are also writ
petitioners in the Bombay High Court) shall, without prejudice to its rights
and contentions in the writ petition, file its monthly Returns before the AO
within twelve weeks from today. At the same time, along with the Returns, each
of the appellants whose name appears in Chart-II shall deposit the outstanding
amount with the Department for the period 2001-02 and 2002-03. On such deposit,
which will be under protest, the AO will set aside the ex parte Assessment
Order passed earlier and the AO shall hear and pass an Assessment Order on such
Returns on merits within three months from the date of filing of the said
Returns. If the appellants fail to deposit the outstanding amount as indicated
in Chart-II, then the ex parte order passed earlier by the AO and the notice of
demand issued earlier will stand and the Department would be at liberty to
initiate recovery proceedings against such appellant (assessee).
the appellants' satisfying the above conditions, the writ petitions dismissed
by the Bombay High Court on the ground of delay shall 6 stand restored to the
file of the High Court. Needless to mention that, if any of the above
conditions remain unsatisfied then the writ petition filed by the processor
shall not be restored to the file of the Bombay High Court and in such
eventuality, the impugned order of the High Court dated 18.4.2007 shall stand.
In other words, till the above conditions are satisfied, the High Court shall
not proceed to entertain the writ petitions mentioned in Chart-I, which
concerns the period December, 1998 to December, 2000.
concluding, we may state that we have not gone into the merits of the matter
and we keep all contentions on both sides on merits expressly open.
the civil appeal stands disposed of with no order as to costs.
Delhi, November 12, 2008.
7 ITEM NO.1 COURT
NO.5 SECTION III SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Petition(s) for
Special Leave to Appeal (Civil) No(s).10272/2007 (From the judgement and order
dated 18/04/2007 in WP Nos.2959, 2909, 2910, 2922, 2926, 2927, 2928, 2929,
2930, 2951, 2953 & 2960 of 2007 of the HIGH COURT OF BOMBAY) YASHWANT
CO-OP.PROCESSORS LTD.ETC. Petitioner(s) VERSUS UNION OF INDIA & ORS.
Respondent(s) (With prayer for interim relief )(FOR FINAL DISPOSAL) (FOR
ORDERS) Date: 12/11/2008 This Petition was called on for hearing today.
HON'BLE MR. JUSTICE
S.H. KAPADIA HON'BLE MR. JUSTICE B. SUDERSHAN REDDY For Petitioner(s) Mr. Vijay
Mr. B.K. Barve, Adv.
Mr. Sanjay Sarin,
Ms. Samina Sheikh,
Mr. Ashok Mathur,Adv.
No.2: Mr. B.A. Desai, Sr.Adv.
Mr. N.V. Solanki,
Mr. Dattatray Vyas,
Mr. Chirag M.Shroff,
For UOI: Ms. S. Wasim
A. Qadri, Adv.
8 Mrs. Anil Katiyar,
Mr. Jufer A.Khan,
UPON hearing counsel
the Court made the following ORDER Leave granted.
Civil Appeal is
disposed of in terms of the signed order, with no order as to costs.