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CASE NO.: Appeal (civil)  413 of 2007

PETITIONER: Life Insurance Corporation of India                     ...Appellants

RESPONDENT: State of Rajasthan & Ors.                               ...Respondents

DATE OF JUDGMENT: 01/02/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T (Arising out of SLP(C) No. 21033 of 2005)  

Dr. ARIJIT PASAYAT, J.

       Leave granted.

Challenge in this appeal is to the order dated 23.5.2005  passed by a Division Bench of the Rajasthan High Court,  Jaipur Bench.  

A brief reference to the factual aspect would suffice.   

The appellant filed the writ petition challenging the order  dated 16.9.2004 and notice dated 16.9.2004 issued by the  Additional Collector (Stamps) Jaipur.  The demand raised by  the State of Rajasthan was in respect of alleged revenue loss  caused by the appellant to the State Government by its  purchasing stamps from other State i.e. Maharashtra. The writ  petition was dismissed by learned Single Judge on the ground  of availability of alternative remedy.  Appellant filed the Special  Appeal questioning correctness of the order passed by the  learned Single Judge.  Along with Special Appeal an  application for stay was also filed.  The Special Appeal was  disposed of with the direction to the respondent- State to  constitute a High Power Committee to resolve the dispute.  The  High Power Committee by its order dated 27.4.2005 held that  the appellant is liable to pay to the State of Rajasthan a sum  of Rs.576.72 lakhs   Appellant filed an application for revival of  the Special Appeal and revival of the interim direction passed  in the said appeal.  Though initially the application was  dismissed, subsequently the same was revived.  Dealing with  the said application it was noted by the High Court by order  dated 11.12.2004 that the demand of Rs.1,19,75,000/- made  against the appellant does not exceed the loan advanced by  the appellant-Corporation to the State of Rajasthan.  Liberty  was given to the State of Rajasthan to adjust the amount of its  demand against the loan advanced by the appellant- Corporation to the State Government.

Learned counsel for the appellant submitted that the  Rajasthan Stamp Law (Adaptation) Act, 1952 (in short the  ’Act’) does not in reality authorize the demand as has been  made in the present case.

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Learned counsel for the respondent-State on the other  hand submitted that the provisions contained in the aforesaid  Act clearly permit the action as taken by the authority.   

Since the matter is pending consideration of the High  Court it would not be proper for us to decide the issues on  merits though learned counsel for the parties made a request  in that regard.  It would be appropriate if the High Court hears  the matter expeditiously, considering the importance to the  issues involved regarding the permissibility of the levy and the  manner adopted. Undisputedly several divisions of the  appellant-Corporation in Rajasthan purchase stamps from  Maharashtra.  Stand of the State Government is that purchase  of stamps from outside Rajasthan was against the provisions  of the Act and the Rules made thereunder.  The view  expressed was that officers of the appellant-Corporation would  purchase stamps from the Rajasthan treasuries only.   

In the circumstances, the High Court is requested to take  up the Special Appeal for disposal expeditiously.  The High  Court is also requested to explore the possibility to dispose of  the matter by the end of August, 2007.  Needless to say the  decision of the High Court shall be uninfluenced by the view  taken by the High Power Committee.  The interim order dated  24.10.2005 passed by this Court shall continue to be operative  till disposal of the matter by the High Court.  It is made clear  that it shall not be construed that we have expressed no  opinion on the merits by granting interim protection as afore-  noted.

The appeal is accordingly disposed of. No costs.