1 nms2970.10.sxw IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2970 OF 2010 IN SALES TAX REFERENCE (L) NO. 50 OF 2007 IN REFERENCE APPLICATION NO. 9 OF 2006 WITH SALES TAX REFERENCE (L) 50 OF 2007 The Commissioner of Sales Tax Maharashtra State, Mumbai ...Applicant Vs. M/s Tata Engineering & Locomotive Company Ltd., ..Respondent Mr. Vinay A. Sonpal, A Panel Counsel for the Applicant. Mr. R.A. Dada, Sr. Advocate with Mr. A.Gokhale, Ms. M.R. Dada, Mr. H.N. Vakil and Mr. Sunil Chavan i/by Mulla & Mulla &CBC for the Respondent. CORAM : DR. D.Y. CHANDRACHUD AND A.A. SAYED, JJ. DATE : 8 SEPTEMBER, 2011. P.C. 1. This Notice of Motion has been taken out by the Commissioner of Sales Tax for (i) condoning a delay of 852 days in taking out a Motion; (ii) setting aside the order of the Prothonotary and Senior Master, High Court dated 29 January 2008 passed under Rule 986 of the Bombay High Court (Original Side) Rules; and (iii) for restoring the Sale Tax Reference to file. 2 nms2970.10.sxw 2. In the affidavit in support of the Motion, it has been stated that the Reference was made under section 61 of the Bombay Sales Tax Act, 1959 by the Maharashtra Sales Tax Tribunal. In paragraph 4, it has been stated that the office of the Sales Tax Commissioner could not keep track of the References being listed on the Board of the Prothonotary and Senior Master for directions to remove office objections inadvertently and as a result of a lack of follow up by his office, the office objections remained to be removed. It has been stated by the Deponent, Shri J.B. Dipte, Deputy Commissioner of Sales Tax (Court Matters), Maharashtra State, that he was not aware of the various Sales Tax References lodged with this Court and dismissed by this Court and hence, appropriate proceedings could not be taken out for restoration of the dismissed matters after he was posted in April 2009. 3. A Reference was filed in this Court being Reference Application No.9 of 2006 by the State of Maharashtra under Section 61 of the Act. It has been stated in the affidavit in reply that normally when a Reference Application is sent by the Registrar of the Tribunal, a copy of the letter of intimation to the Prothonotary is sent to the Commissioner of the Sales Tax. On 24 April 2007 a Reference was filed in this Court. On 10 January 2008, the matter came up 3 nms2970.10.sxw under Rule 986 of the Bombay High Court Rules on the Original Side for rejection, as the applicant had failed to remove the office objections. On 29 January 2008, the Government Pleader appeared before the Prothonotary and Senior Master and took time to remove office objections till 25 March 2008, failing which the Reference was to stand dismissed under Rule 986 of the Bombay High Court (O.S.) Rules. On 26 March 2008 the Prothonotary and Sr. Master dismissed the reference under Rule 986 of the Bombay High Court (O.S.) Rules as office objections were not removed. On 26 August 2010 an affidavit in support of the Notice of Motion for condonation of delay was affirmed in this Court. The Motion was taken up on 18 October 2010. The Notice of Motion along with the Affidavit in support of the Motion was served upon the Respondents on 20 January, 2011. 4. Though the Deputy Commissioner of Sales Tax had moved the Notice of Motion before this Court for restoration, it appears that he moved the Prothonotary on 30 October 2010, when an order was passed for restoration of the reference and for extension of time to remove the office objections till 20 January 2011. Hence in his rejoinder filed on 3 March 2011, the Deputy Commissioner of Sale Tax sought to contend in paragraph 9 that the order of the Prothonotary and Senior Master should be upheld and time to remove office objections should be granted. Now it was improper on 4 nms2970.10.sxw the part of the Deputy Commissioner of Sales Tax, having moved this Court for restoration of the Reference, to have moved the Prothonotary & Senior Master and to have got the earlier order, rejecting the Reference, set aside and the Reference restored. The Prothonotary was evidently not informed of the pendency of the Motion which had already been filed before the Court. As a matter of fact, it appears from the subsequent affidavit dated 6 April 2011 filed by the Deputy Commissioner of Sales Tax that nearly 81 References which had been dismissed in a similar manner, were got restored before the Prothonotary & Sr. Master, merely on the basis of a letter addressed to the Prothonotary on 29 October 2010. 5. The dismissal of a reference for removal of office objections under Rule 986 of Bombay High Court Rules on the Original Side creates a right in favour of the opposing party. Hence Rule 986 makes a provision under which upon rejection of a proceeding under Rule 986, the provisions of Rule 130 are made applicable. Before the Reference can be restored, notice has to be issued to the other side in whose favour certain rights have enured. Even if the other side is not before the Prothonotary when the Reference was rejected under Rule 986, once a rejection has taken effect, certain rights enure in its favour. Notice has to be issued before restoration of the Reference. This is in fact the procedure which is followed even by the Court, 5 nms2970.10.sxw when it is moved for setting aside an order of rejection passed under Rule 986. Service of notice is directed to be effected on the other side before an order for restoration is passed. The procedure was sought to be obviated by the Deputy Commissioner of the Sales Tax moving Prothonotary & Senior Master including in the present matter and obtaining orders of restoration without service on the parties who were affected by the restoration. When this was brought to the attention of the Court by Senior Counsel appearing on behalf of the Respondent, the Court was informed that the revenue would now move an application before the Prothonotary & Senior Master to recall and set aside the earlier order. On 25 April 2011 the Prothonotary & Senior Master passed an order on the said application of the Deputy Commissioner of Sales Tax, setting aside the said order dated 30 October 2010, restoring the application and granted time till 21 January 2011. The Prothonotary & Senior Master modified the earlier order by extending time to remove office objections till two weeks after the disposal of the present Notice of Motion (N.M.No.2970 of 2010). Subsequently, the Prothonotary & Senior Master has passed a further order dated 5 July 2011, modifying the earlier order dated 25 April 2011 so as to provide that the order dated 30 October 2010 is recalled. 6. Normally and as a matter of first principle, the Court is inclined to 6 nms2970.10.sxw approach cases for restoration, where a dismissal order has been passed under Rule 986 for the removal of objections with a considerable degree of latitude since a party should not be adversely affected by technicalities. At the same time, whether it be a private party or the Revenue, the Court expects a degree of candour and fair dealing on part of the litigating parties. The Deputy Commissioner of Sales Tax, having moved this Court for restoration of the Reference, chose it appropriate to move the Prothonotary & Senior Master on 30 October, 2010. The Deputy Commissioner of Sales Tax states that he did so in order to seek the guidance of the Prothonotary & Senior Master. In this process the Deputy Commissioner of Sales Tax obtained orders of restoration in as many as 81 References without service of notice. These orders appear to have been passed without even issuing notices to the private parties, who would have been affected by restoration of the References. Some of the References are of the year 2006, 2007 and 2008 as is evident from the Exhibit to the affidavit dated 6 April 2011. We are therefore, of the view that what has taken place was contrary to law. We are not inclined to exercise our discretion to restore the present case having regard to the improper conduct on the part of the officer of the State Government. 7. For these reasons, we dismiss the Notice of Motion. However, as we 7 nms2970.10.sxw have noted earlier, our attention has been drawn to the fact that 81 other such References have been restored to the file by the Prothonotary and Senior Master on 30 October 2010 merely at the behest of the Assistant Commissioner of Sales Tax Shri Kiran Kakad, who appeared before the Prothonotary & Senior Master. We direct that the Prothonotary & Senior Master shall place all the aforesaid References which have been restored without notice to the opposing parties before this Court for directions so that the appropriate directions can be considered in each of these cases. 8. In view of the disposal of the Motion, the Sales Tax Reference does not survive on the file. ( A.A. SAYED, J. ) (DR. D.Y.CHANDRACHUD, J.)