IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.VINOD CHANDRAN THURSDAY, THE 22ND DECEMBER 2011 / 1ST POUSHA 1933 W.A.No.1969 of 2011 ---------------------------------- (AGAINST THE JUDGMENT DATED 22.11.2011 IN W.P.(C).NO.25852/2011) ------ APPELLANT/PETITIONER:- ------------------------------------- HINDUSTAN ANTIBIOTICS LIMITED, MYTHRI BUILDINGS, PERANDOOR ROAD, ELAMAKKARA, COCHIN - 26, REPRESENTED BY ITS REGIONAL MANAGER, P.V.ANUPKUMAR. BY ADV. SRI.R.MURALIDHARAN (AROOR) RESPONDENTS/RESPONDENTS:- ------------------------------------------------ 1. ASSISTANT COMMISSIONER, SPECIAL CIRCLE-II, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM - 682 015. 2. THE DIRECTOR OF MEDICAL COLLEGE HOSPITALS, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM - 695 001. 3. THE DIRECTOR OF HEALTH SERVICES, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM - 695 001. 4. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM - 6892 030. 5. STATE OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. R1 TO R5 BY GOVERNMENT PLEADER SRI.BOBBY JOHN THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- C.N.Ramachandran Nair & K.Vinod Chandran, JJ. ------------------------------------------ W.A.No.1969 of 2011 ------------------------------------------ Dated this, the 22nd day of December, 2011 JUDGMENT C.N.Ramachandran Nair,J.: The Writ Appeal is filed against the judgment of the learned Single Judge, partially allowing the writ petition by directing the Medical Colleges and Government Hospitals, the purchasers of medicine from the appellant/petitioner, to issue declaration in terms of S.R.O. No.1728 of 1993, which entitles the appellant to claim concessional rate of sales tax at 4% on sale of medicine to Government Departments. The assessments involved are of the years 2003-04 and 2004-05. 2. We have heard the learned counsel appearing for the appellant and the learned Government Pleader. 3. The appellant's counsel submitted that the appellant is a public sector undertaking, under the control of Central Government, supplying medicines only to Government Hospitals and Medical Colleges under the Government. In spite of best efforts, the appellant has been able to obtain declaration forms only for 50% of the sales W.A.No.1969 of 2011 - 2 - made to Medical Colleges and Government Hospitals. The surprising aspect is that the appellant has been receiving payments for the supplies made during the above two years from the Directorate of Health Services and the Director of Medical College Hospitals, so much so actually the payments received by the appellant is for intrinsic supply of medicines to those Departments. As and when supplies are received, it is the duty of the concerned purchasing department of the Government Medical College Hospital or the Government Hospital to issue declaration to the appellant. In fact, when tax collection itself is at concessional rate, it is the purchaser's duty to issue the declaration to entitle them for the benefit of concessional rate granted by the supplier in the invoices. If there is lapses on the side of the Government officers in the Medical College Hospitals or the Government Hospitals to issue the declaration, disciplinary action is called for because a public sector Company has to litigate before higher Courts to get their grievances redressed. We have no doubt in our mind that the buyer Departments are indifferent and irresponsible in not issuing declarations on receipt of goods covered by invoices charging concessional rate of tax under the notification. W.A.No.1969 of 2011 - 3 - Having regard to the facts and circumstances stated above, we dispose of the Writ Appeal by modifying the judgment of the learned Single Judge as follows:- (i) The respondents 2 and 3 will conduct enquiry as to the reasons why declarations are not issued by their purchasing departments against the supplies made by the appellants for which payments have been made. Disciplinary action should be initiated against those involved for not issuing or delaying the issue of declaration. On production of this judgment, whichever is the officer responsible for purchase and issue of declaration forms, under the notification above referred, shall issue the declaration to the appellant after verifying the purchase details within two weeks from the date of production of a copy of this judgment, failing which the appellant can complain to the Directorate of Health Services and Directorate of Medical College Hospitals for taking disciplinary action against such officers. (ii) There will also be a direction to the respondents to withhold the steps taken for recovery of arrears of tax from the appellant for the assessment years 2003-04 and 2004-05 for a period of two months from now. W.A.No.1969 of 2011 - 4 - (iii) All the certificates obtained by the appellant will be produced before the 1st respondent by February 15, 2012 for him to verify the same and rectify the assessments by granting eligible rate of tax and issue fresh assessment orders by the Fast Track Team. Sd/- C.N.Ramachandran Nair, Judge Sd/- K.Vinod Chandran, Judge. vku/- - true copy -