SM 1 wp.96.108 gr IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 96 OF 2011 WITH WRIT PETITION NO. 97 OF 2011 WITH WRIT PETITION NO 98 OF 2011 WITH WRIT PETITION NO. 99 OF 2011 WITH WRIT PETITION NO. 103 OF 2011 WITH WRIT PETITION NO. 104 OF 2011 Hindustan Petroleum Corporation Limited ....Petitioner Versus State of Maharashtra and another ....Respondents WITH WRIT PETITION NO. 105 OF 2011 WITH WRIT PETITION NO. 106 OF 2011 WITH WRIT PETITION NO. 107 OF 2011 WITH WRIT PETITION NO. 108 OF 2011 (W.P.No.108/2011 is not on Board) Bharat Petroleum Corporation Limited ....Petitioner Versus State of Maharashtra and another ....Respondents ____________ Mr. Arshad Hidaytullah, Sr. Advocate with Mr. Mohan P. Tekavde, Mrs. Swati M. Tekavde, Mr. Sachin Dere and Ms. Jayashri Gade for the Petitioner. Ms. Geeta Shastri, AGP for the Respondent Nos. 1 and 2 in W.P. No. 96/2011 and 97/2011. Mr. J. S. Saluja, AGP for the Respondent Nos. 1 and 2 in W.P. No. SM 2 wp.96.108 gr 98/2011 and 99/2011. Ms. Uma Palsuledesai, AGP for the Respondent Nos. 1 and 2 in W. P. 103/2011 and 104/2011. CORAM: DR. D. Y. CHANDRACHUD & A. A. SAYED, J.J. DATED : AUGUST 25, 2011. P.C.: All these Petitions under Article 226 of the Constitution have been instituted by the Hindustan Petroleum Corporation Limited, or as the case may be, Bharat Petroleum Corporation Limited, Government of India undertakings, to impugn a common order passed by the Maharashtra Sales Tax Tribunal on 16 June 2009. The order of the Tribunal arose out of directions that were issued by the Collector of Motor Spirit Sales Tax for the deposit of 70% of the Motor Spirit Tax due under the Bombay Sales of Motor Spirit Taxation Act, 1958. The order of the Collector was challenged before the Tribunal in revision, which reduced the amount payable to 5% of the amount demanded. 2. Counsel appearing on behalf of the Petitioners submitted that since the Tribunal came to the conclusion that the issues which were raised are “highly debatable and arguable”, in that view of the matter, the Tribunal was not justified in passing an order for deposit, though of a reduced amount. The learned Senior Counsel submitted that consistent with the provisions of Section 16 of the Act, even an order for furnishing security would have met the ends of justice, which the Petitioners are willing to provide. Moreover, it was sought to be urged that in the present case, the Petitioners have raised the question as to whether the SM 3 wp.96.108 gr Assistant Collector of Motor Spirits had jurisdiction to pass an assessment order and, particularly having regard to the fact that the Petitioners are public sector corporations, an order for furnishing security would have met the ends of justice. 3. On the other hand, the AGP has urged that, though the Tribunal came to the conclusion that the issues in dispute are “highly debatable and arguable”, the Tribunal had exercised its discretion by reducing the amount payable to 5%, from about 70% that was directed to be deposited by the Collector. Hence, the AGP submitted that no case for interference under Article 226 of the Constitution is made out. 4. Section 16 of the Bombay Sales of Motor Spirit Taxation Act, 1958 provides in Sub-Section 2 that no appeal against an order of assessment, with or without penalty, shall be entertained by the appellate authority unless it is accompanied by satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred. Under the Second Proviso, the Appellate Authority can entertain an appeal without insisting on payment of tax or penalty, but on furnishing in the prescribed manner security for such amount of the tax and penalty as it may direct or on proof of payment of such smaller sum, with or without security, in a like manner, for such amount of the tax and penalty which remains unpaid. In the present case,an important aspect of the matter is that, the Tribunal itself found in paragraph 11 of its impugned decision that the disputed issues are highly debatable and arguable. The Tribunal considered it SM 4 wp.96.108 gr appropriate on this ground to reduce the amount to be deposited from 70% as directed by the Collector to approximately 5% of the demand. We are of the view that, having regard to the fact that the Tribunal has itself found that the Petitioners have raised highly debatable and arguable issues, the end of the justice would be met by directing that the Petitioners to furnish a Bank guarantee of a nationalised bank in respect of the amount as directed to be deposited by the Tribunal within a period of four weeks from today. The Petitioners are public sector undertakings owned by the Central Government. The dues of the of the State Revenue are hence not in jeopardy. During the course of the submissions, as noted earlier, Counsel appearing on behalf of the Petitioners stated that the Petitioners are willing to furnish security, as may be directed by this Court. Accordingly, we modify the order passed by the Maharashtra Sales Tax Tribunal and direct the Petitioners to furnish Bank guarantees of a nationalised bank in the respective amounts as directed by the Tribunal in each of the Petitions. The Bank guarantees shall be furnished within a period of four weeks from today to the satisfaction of the Deputy Collector, Motor Spirits (Appeal) and shall be kept alive during the pendency of the Appeals. Having regard to the amount involved and the long pendency of the appeals, we request the Appellate Authority to dispose of the appeal in any case within a period of 8 weeks from the date on which the guarantees are furnished. Counsel appearing on behalf of the Petitioners assures the Court that the Petitioners would cooperate in the expeditious disposal of the appeals. 5. All the Petitions are accordingly disposed of. SM 5 wp.96.108 gr 6. In the event that the Petitioners fail to furnish guaranties as directed by the Court, the Appeals shall stand dismissed without further reference to the Court. (A. A. SAYED, J.) (DR. D. Y. CHANDRACHUD, J.)