Case: Delta Distilleries Ltd Vs. United Spirits Limited

if necessary the same can be used. However, as observed by the learned Arbitrator in her order dated 27.3.2007, the documents sought in the present matter were required to arrive at the decision on the claim of the respondent no. 1, since, the quantification in support of the claim had been done by the respondent no. 1 on a theoretical basis. A hypothetical calculation should not be resorted to when actual Sales Tax Assessments are available, which would show as to whether the quantum of set-off allowed and claimed was in fact justified. 22. In the circumstances, there is no substance in the first objection viz. an order passed by the earlier Arbitrator dated 27.3.2007, and the subsequent enabling order passed by the Arbitral Tribunal dated 16.9.2011 permitting the respondent to apply under Section 27 could not have been passed. 23. The second objection was that the assessment orders were confidential documents, and Section 71 of the Maharashtra Value Added Tax, 2002 and its pre-cursor Section 64 of the Bombay Sales Tax Act, did not permit production of these documents, and a direction as sought could not have been granted. Since, these two sections are invoked, the relevant part of both the sections are quoted below. “Section 71 (1) – All particulars contained in any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act (other than proceeding before a Criminal Court) or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act shall, save as provided in sub-section (3), be treated as confidential; and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall save as aforesaid, be entitled to require any servant of the Government to produce before it any such statement, return, account, document or record or any part thereof, or to given evidence before it in respect thereof.”“Section 64 (1) – All particulars contained in any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act (other than proceeding before a Criminal Court) or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act shall, save as provided in sub-section (3), be treated as confidential; and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall save as aforesaid, be entitled to require any servant of the Government to produce before it any such statement, return, account, document or record or any part thereof, or to given evidence before it in respect thereof.” 24. If we look at the words used in these two sections, they very clearly state that particulars contained in any return or statement made by a party, or document produced along therewith are confidential, and no court shall pass any order requiring the Government or a Government servant to produce any such statement, document or return. It is a settled principle of law that the words used in a statute are to be read as they are used, to the extent possible, to ascertain the meaning thereof. Both these provisions contained a bar only against the Government officers from producing the documents mentioned therein. There is no bar therein against a party to produce any such document. In Tulsiram Sanganaria and Another v. Srimati Anni Rai and Ors. reported in 1971 (1) SCC 284 , a bench of three Judges of this Court interpreted an identical provision in Section 54(1) of the Income Tax Act, 1922, and held that the said provision created a bar on the production of the documents mentioned therein by the officials and other servants of the Income Tax Department, and made it obligatory on them to treat as confidential the records and documents mentioned therein, but the assessee or his representative-in-interest could produce assessment orders as evidence, and such evidence was admissible. Thus, if a claim is to be decided on the basis of an order of assessment, the claimant as well cannot be denied the right to seek a direction to the party concerned to produce the assessment order. It is this very prayer which has been allowed by the earlier order dated 27.3.2007 passed by the then Arbitrator, and also by the subsequent order dated 16.9.2011 passed by the Arbitral Tribunal, and in our view rightly so. There is no substance in the second objection as well. 25. There is one more aspect which we must note, i.e., when the first respondent made an application for production of the assessment orders, the defence taken by the appellant in their affidavit dated 16.9.2011 was that those documents were confidential documents, and could not be directed to be produced. It was not stated at that time that the said documents were not available. It is ten months thereafter, that when the second affidavit was filed in the High Court, that the respondent for the first time contended that the said documents were not available. This was clearly an after thought, and this attitude of the Respondent in a way justified the earlier order permitting an application under Section 27 passed by the Arbitral Tribunal. The Assistant Commissioner of Sales Tax of the concerned area was also joined as respondent so that he could be directed to produce the required documents. However, he reported that those documents were old records, and were destroyed. The learned Single Judge did not pass any order against the respondent No.2 to produce the documents, as sought. However, the learned Single Judge rightly allowed the petition as against the appellant in terms of prayer clause ‘A’, directing the appellant to produce the documents which were sought by the respondent no. 1. 26. In the circumstances,

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]As far as the first ground of challenge is concerned, as pointed out earlier, reliance was placed by the respondent no. 1 on the judgment of a Division Bench of Delhi High Court in Bhatia Tanning Industries (supra). Now, what had happened in this matter was that the respondent/industries were to supply certain material to the appellant, and since the respondent had committed default in making the supply, the appellant had raised a claim on account of risk purchase which was referred to arbitration. The arbitrator sent notices to the address of the respondents on record twice, and on both occasions the registered notices were returned to the arbitrator stating that the addressee was not available. It was in these circumstances that the arbitrator ordered that there shall be a publication of the notice in a newspaper. That having being done, nobody appeared for the respondent thereafter also, and the arbitrator made an ex-parte award. After the award was filed in court, and notice was sent to the respondent, an objection was raised that the arbitrator had no power to order service by means of publication in the newspaper. The learned Single Judge who heard the matter, set aside the award on the ground that the arbitrator should have gone to the court under Section 43 of the Arbitration Act, 1940 (Act of 1940 for short), and obtained an order from the Court for service by publication which had not beentherefore, fail to see as to how this judgment can advance the submission of the appellant, though it was contended that Section 27 of the Act of 1996 is similar to Section 43 of the Act of 1940. On the other hand, as stated above, the Division Bench judgment of Delhi High Court clearly lays down that Section 43 of the pre-cursor Act permitted the arbitrator to call a third person as well as a party as a witness, and the section was not confined only to calling third persons asis one more aspect which we must note, i.e., when the first respondent made an application for production of the assessment orders, the defence taken by the appellant in their affidavit dated 16.9.2011 was that those documents were confidential documents, and could not be directed to be produced. It was not stated at that time that the said documents were not available. It is ten months thereafter, that when the second affidavit was filed in the High Court, that the respondent for the first time contended that the said documents were not available. This was clearly an after thought, and this attitude of the Respondent in a way justified the earlier order permitting an application under Section 27 passed by the Arbitral Tribunal. The Assistant Commissioner of Sales Tax of the concerned area was also joined as respondent so that he could be directed to produce the required documents. However, he reported that those documents were old records, and were destroyed. The learned Single Judge did not pass any order against the respondent No.2 to produce the documents, as sought. However, the learned Single Judge rightly allowed the petition as against the appellant in terms of prayer clausedirecting the appellant to produce the documents which were sought by the respondent no. 1.