IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION SALES SALES SALES TAX APPLICATION NO.3 OF 2006 TAX APPLICATION NO.3 OF 2006 TAX APPLICATION NO.3 OF 2006 in in in REFERENCE REFERENCE REFERENCE APPLICATION NO.48 & 49 of 2002 APPLICATION NO.48 & 49 of 2002 APPLICATION NO.48 & 49 of 2002 (in (in (in Appeal No.114 and 115 of Appeal No.114 and 115 of Appeal No.114 and 115 of 1997 1997 1997 decided on 25.1.2002) decided on 25.1.2002) decided on 25.1.2002) The The The Commissioner of Sales Tax Commissioner of Sales Tax Commissioner of Sales Tax Maharashtra Maharashtra Maharashtra State Mumbai... State Mumbai... State Mumbai... Applicant Applicant Applicant Vs. Vs. Vs. M/s M/s M/s Godrej Soaps Ltd Godrej Soaps Ltd Godrej Soaps Ltd ... ... ... Opponent Opponent Opponent Mr.Vinay Mr.Vinay Mr.Vinay Sonpal AGP for Applicant Sonpal AGP for Applicant Sonpal AGP for Applicant Mr.S.S.Gaitonde Mr.S.S.Gaitonde Mr.S.S.Gaitonde for Opponent for Opponent for Opponent CORAM CORAM CORAM : Dr.S.Radhakrishnan and : Dr.S.Radhakrishnan and : Dr.S.Radhakrishnan and A.V.Nirgude, A.V.Nirgude, A.V.Nirgude, JJ JJ JJ DATED DATED DATED : 13th June, 2008 : 13th June, 2008 : 13th June, 2008 JUDGMENT JUDGMENT JUDGMENT ( Per A.V.Nirgude, J ) ( Per A.V.Nirgude, J ) ( Per A.V.Nirgude, J ) 1. 1. 1. The present Application is filed under section The present Application is filed under section The present Application is filed under section 61 61 61 of the Bombay Sales Tax Act, 1959 challenging of the Bombay Sales Tax Act, 1959 challenging of the Bombay Sales Tax Act, 1959 challenging the the the Judgment and Order of the Maharashta Sales Tax Judgment and Order of the Maharashta Sales Tax Judgment and Order of the Maharashta Sales Tax Tribunal Tribunal Tribunal at Mumbai on 20.4.2005 passed in at Mumbai on 20.4.2005 passed in at Mumbai on 20.4.2005 passed in Reference Reference Reference Application Nos. 48 and 29 of 2002. Application Nos. 48 and 29 of 2002. Application Nos. 48 and 29 of 2002. The The The Respondent-Company is a manufacturer of soaps Respondent-Company is a manufacturer of soaps Respondent-Company is a manufacturer of soaps and and and other articles and sought decision of the other articles and sought decision of the other articles and sought decision of the Commissioner Commissioner Commissioner of Sales TAx under section 52(1) (e) of Sales TAx under section 52(1) (e) of Sales TAx under section 52(1) (e) of of of Bombay Sales TAx Act and expressed their desire Bombay Sales TAx Act and expressed their desire Bombay Sales TAx Act and expressed their desire to to to know as to which schedule entry and what rate know as to which schedule entry and what rate know as to which schedule entry and what rate of of of taxes would be applicable to their products by taxes would be applicable to their products by taxes would be applicable to their products by name name name " Shaving Rounds " and " Shaving Creams." The " Shaving Rounds " and " Shaving Creams." The " Shaving Rounds " and " Shaving Creams." The Commissioner Commissioner Commissioner of Sales Tax vide his order dated of Sales Tax vide his order dated of Sales Tax vide his order dated 2 28th 28th 28th July, 2007 passed under section 52 (1) (e) of July, 2007 passed under section 52 (1) (e) of July, 2007 passed under section 52 (1) (e) of the the the Bombay Sales Tax Act, 1959 held that the Bombay Sales Tax Act, 1959 held that the Bombay Sales Tax Act, 1959 held that the products products products were covered under schedule entry C-II were covered under schedule entry C-II were covered under schedule entry C-II -35 -35 -35 and rates of tax applicable was 19% from and rates of tax applicable was 19% from and rates of tax applicable was 19% from 1.10.96 1.10.96 1.10.96 to 30.10.96 and 20% from 1.10.96 onwards. to 30.10.96 and 20% from 1.10.96 onwards. to 30.10.96 and 20% from 1.10.96 onwards. 2. 2. 2. Being aggrieved by the said DDQ of the Being aggrieved by the said DDQ of the Being aggrieved by the said DDQ of the Commissioner Commissioner Commissioner of Sales Tax the Respondent-Company of Sales Tax the Respondent-Company of Sales Tax the Respondent-Company preferred preferred preferred an appeal before the Maharashtra Sales an appeal before the Maharashtra Sales an appeal before the Maharashtra Sales Tax Tax Tax Tribunal and sought a declaration that the Tribunal and sought a declaration that the Tribunal and sought a declaration that the products products products mentioned above would come under schedule mentioned above would come under schedule mentioned above would come under schedule entry entry entry No.C-II-35 and so the rates of taxes would No.C-II-35 and so the rates of taxes would No.C-II-35 and so the rates of taxes would be be be lesser than what is mentioned above. The Sales lesser than what is mentioned above. The Sales lesser than what is mentioned above. The Sales Tax Tax Tax Tribunal dismissed their appeal. However, it Tribunal dismissed their appeal. However, it Tribunal dismissed their appeal. However, it preferred preferred preferred to give prospective effect to the to give prospective effect to the to give prospective effect to the applicability applicability applicability of the DDQ from the date of the of the DDQ from the date of the of the DDQ from the date of the order order order of the learned Commissioner namely i.e. of the learned Commissioner namely i.e. of the learned Commissioner namely i.e. 28.7.1997. 28.7.1997. 28.7.1997. The applicant thereafter filed a The applicant thereafter filed a The applicant thereafter filed a Reference Reference Reference Application on 10.4.2002 before the Application on 10.4.2002 before the Application on 10.4.2002 before the Tribunal Tribunal Tribunal and sought the reference of the following and sought the reference of the following and sought the reference of the following questions questions questions of law to this Court under section 61 of of law to this Court under section 61 of of law to this Court under section 61 of the the the Bombay Sales Tax Act, 1959. Bombay Sales Tax Act, 1959. Bombay Sales Tax Act, 1959. " Whether on the facts and in the Whether on the facts and in the Whether on the facts and in the circumstances circumstances circumstances of the case and on the true of the case and on the true of the case and on the true and and and correct interpretation of the schedule correct interpretation of the schedule correct interpretation of the schedule 3 entry entry entry C-II-35 the Tribunal was justified C-II-35 the Tribunal was justified C-II-35 the Tribunal was justified in in in law in granting prospective effect to law in granting prospective effect to law in granting prospective effect to the the the determination order passed by the determination order passed by the determination order passed by the Commissioner Commissioner Commissioner though the said entry is though the said entry is though the said entry is quite quite quite clear and unambiguous ? clear and unambiguous ? clear and unambiguous ? " 3. 3. 3. The Tribunal however, rejected the Reference The Tribunal however, rejected the Reference The Tribunal however, rejected the Reference Application Application Application vide its Judgment and order dated vide its Judgment and order dated vide its Judgment and order dated 20.4.2005. 20.4.2005. 20.4.2005. This order is being challenged in this This order is being challenged in this This order is being challenged in this Application. Application. Application. 4. 4. 4. This Court on 29.6.2006 admitted the This Court on 29.6.2006 admitted the This Court on 29.6.2006 admitted the application application application on the above mentioned questions of on the above mentioned questions of on the above mentioned questions of law. law. law. 5. 5. 5. Having heard both the learned counsel Having heard both the learned counsel Having heard both the learned counsel appearing appearing appearing for the parties we are of the considered for the parties we are of the considered for the parties we are of the considered opinion opinion opinion that the application deserves to be that the application deserves to be that the application deserves to be dismissed. dismissed. dismissed. The reasons are as under : The reasons are as under : The reasons are as under : 6. 6. 6. The only question that we propose to deal with The only question that we propose to deal with The only question that we propose to deal with is is is whether the Tribunal’s order granting whether the Tribunal’s order granting whether the Tribunal’s order granting prospective prospective prospective effect to the determination order effect to the determination order effect to the determination order gives gives gives rise to any " question of law." Our answer rise to any " question of law." Our answer rise to any " question of law." Our answer to to to this is in the negative. The schedule entry this is in the negative. The schedule entry this is in the negative. The schedule entry No.C-II-35 No.C-II-35 No.C-II-35 was brought into operation on 1.10.1995 was brought into operation on 1.10.1995 was brought into operation on 1.10.1995 4 and and and on 1.10.1996. The products in question were on 1.10.1996. The products in question were on 1.10.1996. The products in question were brought brought brought under the purview of this entry and the under the purview of this entry and the under the purview of this entry and the rate rate rate of tax was imposed at the rate of 19% for the of tax was imposed at the rate of 19% for the of tax was imposed at the rate of 19% for the initial initial initial year and at the rate of 20% from year and at the rate of 20% from year and at the rate of 20% from 1.10.1996. 1.10.1996. 1.10.1996. There is no dispute between the There is no dispute between the There is no dispute between the parties parties parties as to whether entry no.35 would be as to whether entry no.35 would be as to whether entry no.35 would be applicable applicable applicable to the products in question. The to the products in question. The to the products in question. The applicant applicant applicant felt aggrieved only because the learned felt aggrieved only because the learned felt aggrieved only because the learned members members members of the tribunal in their discretion made of the tribunal in their discretion made of the tribunal in their discretion made the the the entry effective from 28.7.1997. Mr. Sonpal, entry effective from 28.7.1997. Mr. Sonpal, entry effective from 28.7.1997. Mr. Sonpal, learned learned learned counsel appearing for the applicant counsel appearing for the applicant counsel appearing for the applicant asserted asserted asserted that the decision was ’arbitrary that the decision was ’arbitrary that the decision was ’arbitrary’ in the in the in the light light light of the fact that the entry was brought into of the fact that the entry was brought into of the fact that the entry was brought into operation operation operation very specifically and clearly from very specifically and clearly from very specifically and clearly from 1.10.1995 1.10.1995 1.10.1995 and from 1.10.1996 and so the Tribunal’s and from 1.10.1996 and so the Tribunal’s and from 1.10.1996 and so the Tribunal’s decision decision decision to post-pone the effect of the same gave to post-pone the effect of the same gave to post-pone the effect of the same gave rise rise rise to the question as to whether the decision to the question as to whether the decision to the question as to whether the decision was was was in its true and correct interpretation of the in its true and correct interpretation of the in its true and correct interpretation of the entry. entry. entry. We do not agree with this argument. The We do not agree with this argument. The We do not agree with this argument. The Tribunal Tribunal Tribunal discussed the facts and gave its reasons discussed the facts and gave its reasons discussed the facts and gave its reasons as as as to why they thought it fit to postpone the to why they thought it fit to postpone the to why they thought it fit to postpone the applicability applicability applicability date. Indeed, they used their date. Indeed, they used their date. Indeed, they used their judicial judicial judicial discretion to do so. But, it cannot be discretion to do so. But, it cannot be discretion to do so. But, it cannot be said said said that the said decision was unsustainable in that the said decision was unsustainable in that the said decision was unsustainable in law. law. law. The discretion was used on the appreciated The discretion was used on the appreciated The discretion was used on the appreciated facts facts facts of the case. There can be two views on of the case. There can be two views on of the case. There can be two views on 5 facts. facts. facts. But the decision does not give rise to any But the decision does not give rise to any But the decision does not give rise to any question question question of law in respect of the interpretation of law in respect of the interpretation of law in respect of the interpretation of of of the schedule entry. the schedule entry. the schedule entry. 7. 7. 7. Application should therefore, fail and is Application should therefore, fail and is Application should therefore, fail and is hereby hereby hereby dismissed. dismissed. dismissed. {A.V.Nirgude, {A.V.Nirgude, {A.V.Nirgude, J} J} J} {Dr.S.Radhakrishnan, {Dr.S.Radhakrishnan, {Dr.S.Radhakrishnan, J} J} J}