(1.)- Special Leave is granted.
Common questions of law and fact are involved in these two appeals and they are being disposed of by this common judgment. The appellants are registered exporters under the provisions of the Coffee Act, 1942 and the Coffee Rules, 1955. The respondent-Coffee Board conducts auction of coffee for the purpose of effecting export. The registered exporters participate in the auction and purchase coffee for export. The terms and conditions of the auction-sale are fixed by the Board. The auction on account of which the dispute involved in these appeals arose was held on 18 th May, 1977. The dispute relates to the interpretation of clause 10 of the terms and conditions of the said auction. The clause reads as follows:
"10. Tender of Bids: - The Bid tendered shall be exclusive of Sales Tax, Central Excise Duty, Customs Duties, Octroi Duty and every other imposts and shall be on the basis of delivery of coffee ex-bags, ex-curing works.
However, should there be any change in the rates, taxes, duties and imposts mentioned above between the date of auction at which the exporter purchased the coffee and the expiry of a period of 45 days from the date of such auction, including the date of the auction, the consequent enhancement of the liability of the exporter for the payment o any or all of such levies in respect of the coffees purchased at such auction and shipped within the abovesaid period shall be to the account of the Board to the extent of 50 per cent of the increase in the rates of any or all such levies.
Provided, however, the extent of such enhanced liability which will be to the account of the Board shall be 75 per cent of the increase in the rates of any or all such levies, if the coffees purchased at the auction are shipped within a period of 30 days from the date of the auction.
Any increase in the rates of any or all of such levies on coffee attracting the increased rates and not shipped within a period of 45 days from the date of the auction at which the coffees were purchased shall be entirely to the account of the exporter.
In case of any reduction of the liability of the exporters on account of any reduction in the rates of any or all the taxes, duties and imposts within a period of 45 days from the date of the auction on coffees attracting such reduced rates of levies such reduction of liability shall accrue to the Board to the extent of:
(a) 50 per cent of the reduction in the rates of any or all of such taxes, duties and imposts on coffees attracting such reduced rates of levies and shipped within a period of 30 days from the date of auction.
(b) 75 percent of the reduction in the rates of any or all of such taxes duties and imposts on coffees attracting such reduced rates of levies and shipped beyond a period of 30 days from the date of auction.
The additional sums that may become payable by the exporter to the Board as a consequence of such reduction in the rates of taxes, duties and other imposts shall be paid within seven days from the date of shipment."
(2.)Before we proceed further, it is necessary to note two facts. The first is, as has been stated clearly in the above clause, that the period of 45 days is to be calculated from the date of the auction inclusive of that date. Secondly, the provision in the clause for sharing the excess or reduction in the rates, taxes, duties, imposts etc. is made for the express purpose of fixing the reserve price below which the specific lot of coffee is not to be sold at the auction. For fixing such upset price, the Board takes into account, among other things, the existing rates of taxes and duties. Admittedly, when the auction was held on 18th May, 1977, the Board had taken into consideration, among other things, the export duty which existed till 17th May, 1977, i.e., the day prior to the date of the auction, and had fixed the reserve price accordingly. Since export duty is a component factor for the fixation of the upset price, the quantum thereof depends upon what the export duty at a given point of time is.
(3.)It appears that till 17th May, 1977 the export duty on coffee was Rs. 2,200/- per quintal. However, on the 18th May, 1977, i.e., the date on which the auction was held, it was reduced to Rs. 1,600/- per quintal. Admittedly, at the time the auction was held no communication of the reduction of the duty issued at New Delhi had-been received by the Board, and the reserve price, therefore. was not altered by the Board to reflect it. There is no dispute that if the Board had received the said communication, the reserve price would have been fixed at a different level.