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PETITIONER: M/S. LIPTON INDIA LTD. & ANR.

       Vs.

RESPONDENT: STATE OF KARNATAKA & ORS.

DATE OF JUDGMENT:       08/10/1996

BENCH: S.P. BHARUCHA, S.C.SEN

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      The judgment  and order of a Division Bench of the High Court at  Karnataka in  writ  appeals  is  challenged,  with special leave,  by the assessee.      During the  course of the argument on 13th August, 1996 we found  that the  Division Bench  had proceeded  upon  the basis that Government Order No. CI 138 SPC 90 (P) dated 27th September,  1990,  had  not  been  published  in  the  State Government Gazette. The reason for doing so was the stand of the State  Government. In a rejoinder filed on behalf of the State Government  in   the writ  appeals, the  following had been stated :-      "It   is    submitted   that    the      Government  Order  dated  27.9.1990      (vide Annexure A) was not issued in      exercise  of   its   powers   under      Section 8A of the KST Act, 1957. It      was  neither   published   in   the      Official  Gazette   nor  was   laid      before the Statement Legislature as      contemplated under  Section  39  of      the  Act."           (Emphasis supplied)      The  averments   in  the  rejoinder  were  verified  on affidavit, as  true to  his knowledge, by R. Krishna Murthy, Deputy Commissioner of Commercial Taxes (Assessments VI). It was found  during the  course of  the argument that the said Government Order  had, in  fact, been published in the State Government Gazette  dated 7th  March, 1991.  We,  therefore, passed the following order :-      "It, is  therefore,  becomes  clear      that  the  statement  made  in  the      rejoinder verified Government Order      was not  published in  the Official      Gazette is false. It is, therefore,      necessary to  ascertain whether the      other Government Order was not laid      before    the     Legislature    as      contemplated under  Section  39  of      the Karnataka  Sales  Tax  Act,  is

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    also incorrect.  An enquiry must be      made and  an affidavit  setting out      the true position must be filed.      It also  becomes necessary  to find      out how  a Deputy  Commissioner  of      Commercial Taxes  could  verify  on      oath as  true to  his own knowledge      that a Government Order relating to      his   own    department   was   not      gazetted,  when   it  was.  It  was      either done out of gross negligence      or  deliberately   to  mislead  the      Court.      Having regard to the seriousness of      what is involved, we direct that an      affidavit in  regard  both  to  the      compliance with  Section 39  and in      regard to the Deputy Commissioner’s      affidavit be put on affidavit to be      made by  the Chief Secretary of the      State of  Karnataka. This  shall be      done within 3 weeks from today.      One week,  thereafter, is  given to      the appellants to file an affidavit      in reply  thereto.  The  matter  is      adjourned for  4 weeks.  This shall      be treated as part-heard.      The State  Government Gazette dated      7.3.91 is marked as Exhibit ’A’ and      shall be  treated as  a part of the      record."      In  response   to  that  order,  Cecil  Noronha,  Chief Secretary of  the State  of Karnataka, has made an affidavit on 31st August, 1996. With respect to the stand taken in the rejoinder about the publication of the said Government Order in the  State Government Gazette, the Chief Secretary states that he  found "from the enquiries made that Shri R. Krishna Murthy had  bona fide  believed that no publication had been effected. The  said Government Order was prepared and issued by the  Commerce and  Industries  Department  of  the  State Government. The Office and Department of Commercial Taxes to which Shri Krishna Murthy belongs had nothing to do with the preparation of  the Government  Order in  question. Shri  R. Krishna Murthy  had himself  personally looked  through  the back numbers  of the  Karnataka Gazette  for a  period of  3 months after 27.9.90 having regard to the normal practice of State Government’s  Notification under  S.8A of  the KST Act being generally published within a week or two of their date of issue. The statement made to the effect that there was no publication of  the Government Order in question in Official Gazette could  have been  circumscribed in  respect  of  the period for which he had made a thorough search, namely three months, instead of making it an absolute statement. However, in the circumstances of the case, what Sri R. Krishna Murthy had stated  may not  be construed as gross negligence on his part". The Chief Secretary goes on to state, "The conduct of Sri R.  Krishna Murthy  in making the statement which he did not know to be false at the time of its being made, leads me to conclude  that there  had been  no  wilful  intention  to mislead the  Hon’ble High  Court of  Karnataka". Again,  "In view of  the above,  I respectfully  submit that I am of the opinion that there was no gross negligence or any deliberate intention to  mislead the  Hon’ble High Court on the part of Sri R. Krishna Murthy".                     (Emphasis supplied)

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    The said  officer has  also made an affidavit, in which he apologizes  and  seeks  pardon  for  his  bona  fide  and unintended  mistake.   It  was,  he    states,  his  genuine impression that  if  the  said  Government  Order  had  been published in  the State  Government Gazette,  it would  have been published  within a  reasonable time from its date and, on   this basis,  he carefully  checked and examined all the Gazettes which were issued during the subsequent three month period and  found  that  it  had  not  been  published.  He, therefore, believed that it had not been  published, "having made all sincere and diligent efforts ......"      The Government  Order states  that it  issued from  the Commerce and  Industries Secretariat.  A copy  of the letter sending it  for publication  to the State Government Gazette was marked  to the  Commissioner for  Commercial Taxes.  the rejoinder  makes  the  categoric  statement  that  the  said Government Order was not published only upon the  basis that it was not published in the State Government Gazettes of the following three  months. No  reference was  made by the said officer to  the Commerce  and Industries  Secretariat or the relevant files of his own department.      The rejoinder  filed by  the said  officer in  the High Court categorically  stated that  the said  Government Order was not  published in  the  State  Government  Gazette.  The statement was  made by  the said  officer  as  true  to  his knowledge. The  statement was  made on oath on behalf of the State Government.  The  statement  was  made  in  a  pending proceeding before the High Court at Karnataka. The statement was made  with the  intention that the High Court should act upon it.  The High  Court did  act upon  the statement.  The statement now turns out to have been incorrect.      The  administration   of   the   State   of   Karnataka represented by  its Chief  Secretary, does not find the said officer guilty of gross negligence. The Chief Secretary does not find it unpardonable that the statement was made on oath on behalf  of the  State Government  in a pending proceeding before the   High  Court. We cannot agree. Whether the Chief Secretary thinks  it necessary  to take  action against  the said officer  or not is not our concern. Our concern is that the State  Government made  a statement  on oath  before the High Court  that was  incorrect and the judgment of the High Court  accepts   and  proceeds   upon  the   basis  of  that statement. The High Court’s judgment must, therefore, be set aside and  the matter remanded to the High Court to be heard and decided afresh.      We must  caution the  High Court  at Karnataka,  having regard to  what we have stated above, that it should be very vigilant in accepting as correct a statement, even though it be made  on   oath, on behalf of the State Government. It is unfortunate that  we should  have to  pay this  of  a  State Government, but the record before us leaves us no option.      Learned counsel  for the  State Government  now submits that we  should not make this general observation in respect of affidavits filed on behalf of the State Government. As we have already  stated, we  have done  so  because  the  Chief Secretary  of   the  State   of  Karnataka   does  not  seem particularly troubled  by the  fact that a Government before the High  Court which  was not  correct. He  does  not  even think that  the said officer was grossly negligent in making the  statement  that  the  said  Government  Order  was  not gazetted only on the basis of going through the Gazettes for the succeeding  three months.  We  must  assume  that  other officers of  the State Government will be encouraged to make statements before  the courts  on oath  upon as little or no enquiry,  expecting   from  the  Chief  Secretary  the  same

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unconcern.       The  appeals are allowed. The judgment and order under appeal is  set aside.  The writ  appeals (being  Writ Appeal Nos. 274  278 of  1994) are restored to the file of the High Court at  Karnataka to  be heard  and decided afresh, having regard to  what is  stated in  this judgment  and order. The Division Bench  hearing the  appeals before  us. The appeals shall be  heard and  disposed of with expedition and, as far as possible,  within a  period of  four months  from  today. Pending the  disposal of  the appeals,  the order  passed by this Court on 13th August, 1994, shall continue to operate.      The State of Karnataka shall pay to the appellants the costs of these appeals and thrown away, quantified in the sum of Rs. 50,000/- (Rupees fifty thousand).