IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.735 of 2011 The Food Corporation Of India Exhibition Road, 4th Floor, Arunachal Building, Patna through Senior Regional Manager, now General Manager, Patna. … Respondent.. Appellant Versus 1. M/S Adarsh Rice Mill, Khaira Bhudhar, P.S.- Bikramaganj, Distt.- Rohtas, through its Partner Sri Bishundeo Ojha. 2. M/S Adarsh Chawal Mill, Khaira Bhudhar, P.S.- Bikramganj, Distt.- Rohtas, through its Partner Sri Birendra Ojha. 3. M/S Adarsh Modern Rice Mill, Relwaiya, P.S.- Dinara, Distt.- Rohtas, through its Partner Satyendra Ojha. 4. M/S Parwati Jee Rice Mill, Dinara, P.S.- Dinara, Distt.- Rohtas through its Partner Arvind Ojha. .. Petitioners/Respondents 5. The State Of Bihar 6. Union of India through the Secretary, Govt. Of India, Krishi Bhawan, New Delhi . Respondents-Respondents. With LPA No.774 of 2011 1. The Senior Regional Manager, now General Manager, Food Corporation of India, Arunachal Bhawan, Exhibition Road, Patna. 2. The Food Corporation of India constituted under the Food Corporation of India Act, 1964 (Central Act 37 of 1974) having its Headquarters situated at 16-20, Barakhamba Lane, New Delhi-1 through its Managing Director. 3. The Manager (M & P), Food Corporation of India, 16-20, Barakhamba Lane, New Delhi-1. 4. The Regional Manager, Food Corporation of India, Regional Office, Exhibition Road, Patna. 5. The District Manager, Food Corporation of India, Firdaus Building, Exhibition Road, Patna. 6. The Purchase Incharge, Food Corporation of India, FSD, Buxar. …..Respondents/Appellants . Versus 1. M/S Shree Bishwanath Jee Mills , a partnership firm having its place of business at Gajadharganj, Buxar, District- Buxar, through its one of the partners Hem Prakash. … Petitioner/ Respondent. 2 2. The Union of India through its Under Secretary, Ministry of Consumer Affairs & Public Distribution (Department of Public Distribution), Krishi Bhawan, New Delhi-110001. .. Respondent/ Respondent. With LPA No.861 of 2011 1. The Senior Regional Manager, now General Manager Food Corporation of India, Arunachal Bhawan, Exhibition Road, Patna. 2. The Food Corporation of India Constituted under the Food Corporation of India Act, 1964 (Central Act 37 of 1974) having its Headquarters situated at 16-20, Barakhamba Lane New Delhi-1 through its Managing Director. 3. The Manager (M & P), Food Corporation of India, 16-20, Barakhamba Lane, New Delhi-1. 4. The Regional Manager, Food Corporation of India, Regional Office, Exhibition Road, Patna. 5. The District Manager, Food Corporation of India, Firdaus Building, Exhibition Road, Patna. 6. The Purchase Incharge, Food Corporation of India, FSD Buxar. … Respondents/Appellants Versus 1. M/S Shree Shankar Rice Mills, a partnership firm having its place of business at Akhauripur Gola, Chausa (Buxar) through its one of partners Shree Krishna Gupta. 2. The Union of India through its Under Secretary, Ministry of Consumer Affairs & Public Distribution (Department of Public Distribution), Krishi Bhawan, New Delhi-110001. … Respondents/Respondents. ------------ For the appellants : Mr. S. K. P. Sinha, Adv. For the respondent : Mr. Dhanendra Chaubey, (in LPA No.735 of 2011) : Mr. Ramesh Kumar, Adv. For the respondent : Mr. Ramesh Kumar Agrawal, Adv. ( in LPA Nos. 861 of 2011 : Mr. Vikash Kumar Singh, Adv. & 774 of 2011) ----------- 3. 11.08.2011 Heard the parties in respect of limitation as well as on merits of the appeals. For the reasons mentioned in the limitation petitions, delay is condoned. The limitation petitions are 3 allowed. All the three appeals arise out of a common judgment and order passed in three different writ petitions. The petitioners had accepted the offer of Food Corporation of India and sold rice to the appellant-Corporation to meet its procurement plans. The issue before the writ court was whether the appellant- Corporation was under contractual obligation to reimburse the writ petitioners to meet the demands for sales tax, market fee, transportation and other cost components. The Court considered the relevant notification and categorical statement therein that the price is exclusive of taxes, if any, leviable at rice stage and on that basis the issue was decided in favour of the writ petitioners. While holding that the FCI has a legal obligation to pay not only the price of rice duly notified, but also to reimburse the component of sales tax and market fee wherever required to be paid as well as the calculation of transportation, price of gunny bags, stitching charges etc, conditions have been imposed by the writ court that the petitioners will have to satisfy FCI that demands under sales tax have been made or paid and same condition is to apply to market fee and other demands. 4 Learned counsel for the appellants has confined his submission mainly on the basis of a new grievance raised before us in appeal that the FCI was not supplied Form IX C at the appropriate time and therefore it had to pay the sales tax on the procured rice in course of second sale by the Corporation to different distributors of rice. Hence, a grievance has been raised that if the direction to reimburse the sales paid by the writ petitioners is complied by the FCI, it will be a double burden because it has already paid sales tax as a second seller. There is no dispute in law that legal liability to pay sales tax on rice is upon the first seller. In order to claim exemption as a second seller, FCI had to obtain Form IX C from the petitioners after satisfying their demand for reimbursement of the sales tax. It is further clear that in the case of M/s Adarsh Rice Mill and others (respondents in LPA No. 735 of 2011), the relevant assessment year was 1997-1998 and in other two cases, it is 1999-2000 and 2000-2001. The writ petitions were filed in the year 2001 and till then and even thereafter for a long time FCI did not raise this issue apparently because it was under an impression that it is not required to reimburse such liability. 5 In a supplementary counter affidavit filed in November 2003 in C.W.J.C. No. 6768 of 2001 ( related to LPA No. 861 of 2011), a simple statement was made in paragraph 10 in following words:- “If Form IX C under sales tax is not furnished by the writ petitioner, the Corporation has to pay the sales tax again to the sales tax authority.” In paragraph 11 of the said supplementary counter affidavit, it was alleged that in the year 2000 FCI had demanded Form IX C but it was not supplied. In paragraph 12, it was stated that an amount of Rs.1,75,975.59/- was lying with a writ petitioner and he was entitled for the sales tax but after furnishing Form IX C to the District Office of Food Corporation of India, Patna. The stand of the writ petitioners, in reply to the supplementary counter affidavit, was to the effect that required Form IX C are available with them and FCI can be supplied those forms provided it pays the amount of sales tax. The allegation of any excess amount lying with the petitioner was also denied. On behalf of the respondents in LPA No. 735 of 2011, who were writ petitioners in CWJC No. 2421 of 2001, it has been fairly admitted that these writ 6 petitioners have not paid any sales tax and hence they are willing to co-operate with the FCI, if the sales tax liability of these petitioners is adjusted against the payment of sales tax made by FCI for the transactions in question. The demand raised by the sales tax authorities against this writ petitioner is however still pending. In this factual state of affairs, so far as the respondent of LPA No. 735 of 2011 is concerned, they would have to meet the liability of sales tax as the first seller and then they would be entitled to claim reimbursement on submission of Form IX C or any proof showing that they have paid the sales tax, unless the sales tax authorities exempt them on account of sales tax payment by FCI. The peculiar facts noted above have been highlighted by us not with a view to pass any further directions over and above what have been issued by the writ court but only to highlight the stand of the parties. In our considered view, the grievance raised on behalf of the appellant- Corporation ought to have been raised before the writ court along with full details as to when the sales tax proceedings were initiated and when they reached finality leading to payment of sales tax by the 7 Corporation. As respondents in the writ petitions, Corporation can not seek any independent relief but it can raise all defence against grant of relief prayed by the writ petitioners. On that basis if an appropriate case is made out, the Writ Court may, in the interest of justice and equity make suitable observations if it is found that such observations can save the Corporation from an unjust situation where it has to pay sales tax liability twice. The order under appeal clearly shows that no such issue was raised on behalf of the Corporation although some foundation for such a plea, as noted above, is available in the supplementary counter affidavit in one of the cases. We do not find any good reason to interfere with the decision of the writ court but in larger interest of justice and for a limited purpose as to whether any equitable observation can be made in favour of Corporation or not, we grant liberty to the appellant-Corporation to file a review/modification petition highlighting the grievance that has been raised before us along with full particulars and factual details. In case such a review petition is filed, it is expected that writ court will consider the same on its own merit keeping in view the observations made by us in this 8 order. The appellant Corporation will also be at liberty to seek review in respect of direction for payment of interest, if it can satisfy the writ court that it had acted bona fide and paid the sales tax dues to the department in due time. The appeals are disposed of, accordingly. Kanchan (Shiva Kirti Singh, J.) (Amaresh Kumar Lal, J.)