M/S. RICHPAL BIRMADUTTA AND ORS. Vs. THE STATE OF BIHAR AND ORS.

JUDGEMENT

(1.) These two writ applications have been heard together as common questions of fact and law are involved in them and both are being disposed of by a common judgment. In C.W.J.C. 856 of 1969 there are 11 petitioners, out of whom petitioner no. 11, the Jamshedpur Chamber of Commerce, seems to be an unnecessary party. The three respondents are (1) the State of Bihar, (2) the Deputy Commissioner, Singhbhum, Chaibassa and (3) the District Supply Officer, Singhbhum, Chaibassa. The petitioners have obtained a rule from this Court under Article 226 of the Constitution of India against the respondents to show cause why Clause 6 of the Bihar Foodgrains Dealers' Licensing Order, 1967 made under Sec. 3 read with Sec. 5 of the Essential Commodities Act, 1955 (Central Act 10 of 1955), hereinafter called the Licensing Order, be not declared ultra vires and why a writ in the nature of certiorari should not issue to call up and quash the order dated 19.6.69 passed by the Deputy Commissioner, Singhbhum, respondent 2, a copy of which is Annexure 4, as also the circular of the State Government contained in Annexure 5 along with the covering letter (Annexure 6) and the letter (Annexure 7) written to some of the petitioners. Cause has been shown by filing a counter -affidavit on behalf of respondent 2. Learned Standing Counsel I appeared at the time of the hearing of the application.

(2.) Petitioners 1 to 10 are wholesale dealers in foodgrains who had valid licences granted or renewed under the Licensing Order upto the year 1968. In December of that year they applied for renewal of their licences for the year 1969. Upon this, a letter dated 14.1.69 was written to petitioner no. 10 by the Deputy Commissioner, a copy of which is Annexure 1 to the writ application, to produce the up to date Income Tax and Sales Tax payment certificates and the assets of its property duly verified by the Income Tax authorities within a week from the receipt of the said notice, failing which adverse inference on these points would be drawn. According to the petitioners' case, they approached the Income Tax Department for the said purpose, but in spite of their best efforts they were not able to obtain the required certificates. The Deputy Commissioner then wrote a letter to the petitioners on 1.7.69, a copy of which letter written to petitioner no. 10 is Annexure 2 to the writ application. He directed the petitioners to file the payment certificates of the Sales Tax and the Income Tax Departments, but, as it appears from this letter, certificates in regard to the property were not insisted upon. Some of the petitioners were able to comply with some of the requirements - -some were able to comply with all. But at the time the impugned order was made they had not done so, and renewal of the licence, in case of some, was postponed and in case of some it was refused, as would appear from the certified copy of the report made by the District Supply Officer, respondent 3, to the Deputy Commissioner, respondent 2 (Annexure 4), upon which the latter passed the orders on the margin of the report. In some cases time was granted and in the case of petitioner no. 1, to connect his serials 5 to 8 in Annexure 3, the chart prepared by the office of the District Supply Officer, the reason found mentioned by the Deputy Commissioner in his order dated 19.6.69 is as follows:

(3.) In the counter affidavit it is mentioned in Paragraph 6 that subsequently licences of petitioners 2, 4 and 9 have been renewed and those of petitioners 3, 6, 7 and 8 were under consideration. The ground on which the licences of petitioners 1 and 5 are said to have been refused to be renewed is that petitioner no. 1 had not furnished its Sales Tax clearance certificate and stated that it was not an assessee under the Income Tax Act. Regarding petitioner no. 5 it is mentioned in Clause (v) of Paragraph 6 that it filed Sales Tax clearance certificate and expressed its inability to produce the Income Tax clearance certificate on the ground that it was its new business, but this explanation was not accepted as satisfactory by the licensing authority. In regard to petitioner no. 10, it is not clear as to why its case has not been disposed of one way or the other. In Paragraph 7 of the counter -affidavit, the order of the Deputy Commissioner is sought to be sustained on the ground that under Clause 2(d) of the Licensing Order one who deals in foodgrains of more than 100 quintals at a time, as defined therein, is expected to invest more than Rs. 10,000/ - as the minimum value of 100 quintals would be Rs. 10,000/ -. He is, therefore, to be assessed to Sales Tax and Income Tax. He who invests more than Rs. 10,000/ - in trade should invariably be an income -tax assessee. Failure on the part of the dealers to produce Income Tax and Sales Tax clearance certificates tends to confirm the belief that they are either tax evaders or are not financially sound to run the wholesale business.