Mathew, J. - (1.) These are petitions filed under Article 32 of the Constitutions praying for issue of appropriate direction or order for the enforcement of the fundamental right of the petitioners under Article 31(1) of the Constitution.
(2.) The question raised in the two petitions is the same we propose to deal with Writ Petition No. 39 of 1969 and our decision there will govern and dispose of Writ Petition. 92 of 1969.
(3.) The petitioner is a company incorporated under the Indian Companies act, 1913. It has its registered office in Calcutta and a branch office at Binani House, Khundi Katra, Mirzapur, U.P. The petitioner is an importer and a dealer in non-ferrous metals like zinc, lead, copper tin, etc. and is on the approved list of registered suppliers to the Directorate General of Suppliers and Disposals, hereinafter referred to as DGS and D. It is also a registered dealer in the State of West Bengal under the Bengal Finance Act, 1941 and the Central Sales Tax Act, 1956. The petitioner used to procure non-ferrous metals from various countries and also from within the country for fulfilling its contracts with the Government of India through the DGS and D. The import of non-ferrous metals was under Open General Licence till June 30, 1957. Thereafter, a licensing system was introduced by the Government of India and the established traders including the petitioner were asked to get their quotas fixed on the basis of their past imports. On April 2, 1958, the Government of India promulgated the Non-ferrous Metals Control Order, 1958, under the Essential Commodities Act, 1951 by virtue of which free sale of copper was banned. Any import of copper by the established licence holders was to be distributed under the directions of the Controller of Non-ferrous Metals. Under the Non-ferrous Metals Control Order, 1958, and also under the Import Trade Regulations, the established importers were not free to sell the metals imported by them against their quota licences even to the DGS and D. The petitioner, in order to effect supplies to the DGS and D had to obtain additional import licence. Under the Import Trade Control Policy, the established importers including the petitioner obtained quota licences for import of non-ferrous metals for the licensing period up to April, 1964-March, 1965, but the imports mentioned here were to be distributed only under the directions of the Controller of Non-ferrous Metals or the Import Trade Control Authority. On September 14, 1965, the Government of India promulgated the Scarce Industrial Materials Control Order, 1965, under the Defence of India Rules Stocks of non-ferrous metals including incoming imports were thus frozen. The Non-ferrous Metals Control Order, 1958, was repealed, the Scarce Industrial Materials Control Order, 1965 was also repealed on June 6, 1966. The Government of India, in placing orders with the petitioner used to grant import licences in terms of the contract. The petitioner had been importing and supplying non-ferrous metals to respondents 1, 2, and 3 during the last 19 years. Respondent No. 2 had agreed to pay and was paying the Central Sales Tax and / or West Bengal Sales Tax whichever was applicable to the petitioner in terms of the contract. In 1966, this Court held in K. G. Khosla and Co. v. Deputy Commr. of Commercial Taxes, (1966) 3 SCR 352 , hereinafter referred to as the Khosla Case, that the sale by Khosla and Co. to DGS and D in India of axle-box bodies manufactured in Belgium by their principal occasioned the movement of goods in course of import and sales tax was not exigible on the transaction in view of Section 5 (2) of the Central Sales Tax Act, 1956. On the basis of this judgment, respondent No. 2 issued an order (Annexure P-1) to all the authorities concerned including respondent No. 4, namely, the Pay and Accounts Officer, Ministry of Works, Housing and Supply, directing that sales tax should not be allowed in respect of supply of stores which has been specifically imported against licences issued by the Chief Controller of Imports and Exports on the basis of Import Recommendation Certificates issued by the DGS and D or other authorities like the State Trading Corporation for supplies against contract placed by the DGS and D. The Pay and Accounts Officer, acting on Annexure P-1 deducted the amounts of sales tax paid by the respondents under all the old contracts from the current bills falls which were submitted by the petitioner to him. Respondent No. 4 actually deducted a sum or Rs. 60,780/- from the bills which were pending payment and also threatend to recover Rupees 2,35,130.01 being the amount paid by respondent No. 2 as sales tax in respect of contracts which had already been executed. The assessments on the petitioner up to the year ending October 27, 1962, were completed prior to the date of judgment in Khosla case (1966) 3 SCR 352 and the issue of the order at Annexure P-1. The petitioner, when it came to know of Annexure P-1 order, approached the sales tax authorities in West Bengal and filed revised returns in the pending assessments and claimed refund of taxes paid on the sales, treating the sales as having been made in the course of import on the basis of the judgment in Khosla case, (1966) 3 SCR 352 . The West Bengal sales tax authorities took the view that there were two sales involved in the transactions in question, namely, sale to the petitioner by the foreign sellers and sale by the petitioner to the DGS and D, that there was no privity of contract between the DGS and D and the foreign sellers that the petitioner under the import licences granted to it, was entitled to import the goods from any person or country and that the import licences issued as against the contracts with the DGS and D imposed no obligation on the petitioner to supply the goods to the DGS and D after they had been imported. They, therefore, held that tax was exigible on the sales by the DGS and D.;