Special Leave Petition Civil Nos
15054 57 of 1985
From the Judgment and Order dated 3011985 of the Allahabad High Court in Sales Tax Revision No 334 418 285 and 332 of 1984
SC Manchanda RS Rana and Ashok K Srivastava for the Petitioner
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an application for leave to 448 appeal under Article 136 of the Constitution against the Judgment and order of the High Court of Allahabad dated 30th January 1985
The respondent carried on the business at the relevant time in Tendu leaves
The respondent s case was that there was no inter state sales of Tendu leaves in question
On the contrary its case was that the entire sales of Tendu leaves were effected in Uttar Pradesh
This contention was not accepted by the assessing authority
Having failed in the first appeal the assessee went up in second appeal and the Tribunal allowed the appeal and quashed the orders passed by the assessing authority as well as the Assistant Commissioner Judicial
The Tribunal exhaustively discussed the facts
They found that the assessee carried on business in Tendu leaves and for the year 1976 77 the assessee had been assessed under Section 21 of the UP Sales Tax Act on inter state sales of Rs21050 to a tax of Rs2105 whereas the case of the assessee was that the inter state sales were nil
It was contended on behalf of the assessee that the assessee had effected the sales in UP
According to the assessee out of the above sales of Rs21050 Tendu leaves worth Rs 10000 were sold on 24th April 1976 to Sri Gulam Mohammad of Kanpur and those worth Rs11050 were sold in cash at Lalitpur on 5th May 1976
It was further contended that the assessee did not know if the purchasers had taken these Tendu leaves to places outside UP and even if they had so taken the assessee could not be assessed to tax under the as the contract between him and the purchaser was to purchase goods in UP
The Tribunal took notice of TP Form IV which is a transport permit issued by the Forest Department
The Forest Department had given in writing that this transport permit did not relate to sale but it was a certificate regarding the validity of Nikasi of Tendu leaves from the forest
It is well settled that even if it is established that the assessee had obtained TP Form IV that by itself will not show that the assessee had entered into inter state sales
Merely because TP Form had been issued it does not follow that there were inter state sales
The principles of inter state sales were well settled
In Bengal Immunity Co vs State of Bihar 6 STC 446 Justice Venkatarama Ayyar had held that sale could be said to be in the course of inter state trade only if two conditions concur namely 1 a sale of goods and 2 a transport of those goods from one State to another
Unless both these conditions were satisfied
there could be no sale in the course of 449 inter state trade
There must be an evidence that the transportation was occasioned by the contract and as a result goods moved out of the bargain between the parties from one State to another
It is apparent from the facts found by the Tribunal that the assessee had since the very beginning been contending that he had effected only local sales
He had also filed an affidavit stating that he had not effected any sales of Tendu leaves during the course of inter state trade and commerce and that the had never applied to the Forest Department for issue of Form TP IV and that no such Form was ever issued to him and the Tendu leaves in dispute were not booked by him through railways or trucks for places outside UP
The Tribunal found nothing to discredit this version of the assessee
The onus lies on the Revenue to disprove the contention of the assessee
The Tribunal found no material to do so
On these facts the Tribunal rejected the contention of the assessee
On these contentions the Revenue went up in appeal before the High Court
The question posed before the High Court was as follows Whether on the facts and under the circumstances of the case the Tribunal Sales Tax Kanpur was legally justified in knocking off the tax imposed by the assessing authority The High Court addressed itself to the question whether the sales effected by the respondent were inter state sales or not
On an analysis of the findings of the Tribunal the High Court found that the goods were not moved out of UP in pursuance of an agreement for sale entered into between the assessees and their customers
The existence of TP Form IV was taken note of but that did not conclude the matter
The condition precedent for imposing sales tax under the  is that the goods must move out of the State in pursuance of some contract entered into between the seller and the purchaser
If that is a correct principle in law the Tribunal applied this correct principle of law to the facts of this case taking into cognizance the existence of TP Form
In view of the facts of this case the High Court found no material to interfere and dismissed assessee s contention
We are of the opinion that the High Court was right
In the premises this application for leave must fail and is accordingly dismissed
NVK Petition dismissed


Summary:
 In this appeal the appellant questioned the constitutional validity of sub section 4 of section 6 of the UP  The Act  and also the validity of the order passed by the Govt
remitting the award passed by the Labour Court for reconsideration by it
The appellant was an employee of respondent No 5
Ms Electric India Ltd Meerut
The services of the appellant were terminated by the Management of the said respondent
The termination of services led to an industrial dispute
The State Government of Uttar Pradesh under section 4 K of the Act referred the said dispute for adjudication of the Labour Court Meerut
The Labour Court passed an award and forwarded it to the State Government
Instead of publishing the award in the Official Gazette as required by sub Section 3 of section 6 of the Act the State Government passed an order under section 64 of the Act remitting the award for reconsideration
The appellant submitted before the Labour Court that he did not want any re consideration of the award
On 721985 the Management filed an application saying that the case might be fixed for hearing after two months
The appellant opposed the application
The case was adjourned to 11385 and on 11385 to 26385 at the further request of the management
In the meanwhile the management moved the State Government to transfer the case from the Labour Court Meerut to another Labour Court or the Industrial Tribunal
The State Government passed an order transferring the case to the Industrial Tribunal Meerut
Aggrieved by the order remitting the award to the Labour Court and the subsequent order transferring the case to the Industrial Tribunal the appellant filed a writ petition in the High Court challenging the above said two orders
The High Court dismissed the writ petition in respect of the order made under section 64 of the Act but set aside the order of transfer
Aggrieved by the judgment of the High Court upholding the 470 order passed under section 64 of the Act the appellant filed this appeal in this Court for relief by special leave
Allowing the appeal the Court  HELD By leave of the Court the appellant raised an additional ground before the Court questioning the constitutional validity of sub section 4 of section 6 of the Act itself and the Court first took up for consideration the question relating to the constitutional validity of sub section 4 of section 6 of the Act
476B C The questions raised before the Labour Court were very simple ones
They had no effect on the national economy
They did not in any way interfere with the principles of social justice
No grave consequences would have ensued if the award had been published in the Official Gazette and the parties allowed to question its validity before the High Court under Article 226 of the Constitution of India or before the Supreme Court under Article 136 of the Constitution
The parties had not been given notice by the State Government to show cause why the award should not be remitted to the Labour Court for a fresh consideration
The order of the State Government also did not state why and on what points the State Government was not satisfied with the award and the questions on which the Labour Court was required to reconsider its award
479G H 480A B When once a decision is given by a quasi judicial authority it would not be safe to confer on any executive authority the power of review or remission in respect of the said decision without imposing any limitation on the exercise of such power Even when a Court is conferred the power of review such power can be exercised ordinarily under the well known limitations as are found in Order 17 of the Code of Civil Procedure
Similarly under section 16 of the  the power to remit an award to the Arbitrator can be exercised by a Civil Court only under the circumstances specified in that connection
Sub section 4 of section 6 of the act imposes no such limitations
482C D The argument of the State Government that it was open to the State Government to seek necessary guidance from the object and contents of the Act and that the State Government could remit the award to the Labour Court only for a reason which was germane to the statute in question was not of any assistance to the State Government in this case because even though the reason for remitting the award may be a 471 reason connected with industry or labour it can still be used arbitrarily to favour one party or the other
The ground for remitting the award should be one corresponding to a ground mentioned in section 16 of the  otherwise the power is capable of serious mischief
The facts in this case themselves serve as a good illustration of the above proposition
There were only two main issues for consideration before the Labour Court 1 whether the appellant was a workman and 2 whether his services had been validly terminated
The Labour Court had recorded its findings on both the issues in favour of the appellant
From the prayers made before the Labour Court after the case had been remitted to it it is seen that the Management wanted to adduce additional evidence before the Labour Court in support of its case
It was not the case of the Management that the Labour Court had unreasonably refused permission to the Management to adduce all its evidence before the award was passed
It was not even a case where industrial peace was likely to be disturbed if the award had been implemented as it was
The award would not have also affected prejudicially either national economy or social justice
In the above circumstances it would not certainly be proper for the State Government to make an order remitting the award
The State Government in this case could do so because it had been entrusted with such unguided power under section 64 of the Act
482E H 483A C It was urged by counsel for the State Government that sub section 4 of section 6 of the Act needed not to be struck down but the Court might direct that the State Government should give a hearing to the parties before an order was passed under section 64 remitting the award and also require the State Government to give reasons in support of its order
The Court did not think that this was an appropriate case where the impugned provision could be upheld by reading into it the requirement of issuing notice to the parties and the requirement of giving reasons for its orders
The provisions could not be upheld in the absence of necessary statutory guidelines for the exercise of the power conferred by it having regard to the fact that the proceeding before the Labour Court or the Industrial Tribunal is in the nature of quasijudicial proceeding where parties have adequate opportunity to state their respective cases to lead evidence and make all their submissions
It is significant that the corresponding Act which is in force in the other parts of India ie the Industrial Dispute Act 1947 Central Act XIV of 1947 does not contain any provision corresponding to section 64 of the Act and the absence of such a provision in the Central Act has not led to any serious inconvenience to the general public
483D F 472 The Management could not derive much assistance from the decision of this Court in the Sirsilk Ltd  Ors vs Government of Andhra Pradesh  Anr1964 2 SCR 448 as in this case there was no settlement arrived at between the appellant and the Management which made the publication of the award unnecessary
484H 485F There was one other good reason for taking the view that without any guidelines it will not be appropriate to confer power on the State Government to nullify virtually the effect of an award by exercising its power under section 64 of the Act
applies not merely to disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by the State Government and their workmen
In the cases where the Government is the owner of the industry it would be inappropriate to confer uncontrolled and unguided power on the State Government itself to remit the award passed on the industrial disputes arising in such industries for there is every chance of the power being exercised arbitrarily in such cases
The danger of entrusting unguided and uncontrolled power to remit an award for reconsideration of the Labour Court or Industrial Tribunal can very well be perceived particularly where the award has gone against the State Government in a dispute arising out of an industry owned by it
The sub section 4 of section 6 of the Act which is so widely worded is therefore likely to result in grave injustice to a party in whose favour an award is made as the said provisions can be used to reopen the whole case
The Court did not agree with the view expressed by the High Court of Allahabad in VE Thamas  Ors
vs State of Uttar Pradesh  Ors
  in which the validity of sub section 4 of section 6 of the Act had been upheld
485F H 486G H 487C D Taking into consideration all the aspects of the case including the object with which the Act was enacted the Court felt that sub section 4 of section 6 of the Act was violative of Article 14 of the Constitution of India as it conferred unguided and uncontrolled powers on the State Government
The Court declared sub section 4 of section 6 of the Act as unconstitutional and struck it down
It followed that the order passed by the State Government remitting the case for reconsideration by the Labour Court was also liable to be set aside
The State Government was directed to publish the award under section 63 of the Act
On publication of the award it was open to any of the parties aggrieved by the award to resort to such remedies as might be available to it in law
487H 488A C 473 Messrs Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others   State of Bihar vs DN Ganguly  Ors   Sirsilk Ltd 448 P Sambamurthy  Ors
vs State of Andhra Pradesh  Anr
  and Star Paper Mills Mazdoor Sangh  Ors
vs Star Paper Mills Ltd Saharanpur  Ors  referred to
VE Thamas  Ors
vs State of Uttar Pradesh and Ors  disapproved