IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6905 OF 2008 (Arising out of S.L.P.(C) No.10123/2008)

M/s. Continental Builders & Developers  through its Proprietor ...Appellant(s)

Versus

State of Karnataka thr. C.C.T. ...Respondent(s)

O R D E R

Leave granted.

A dispute  arose  before  the  Tribunal  in  the  context  of  sales  tax  liability

towards development charges received by the appellant-builder.

We quote hereinbelow para 9 of the Order of the Tribunal.

“The appellant has placed reliance over the decision of this Tribunal in respect  of  the  same  appellant  in  STA  No.239  to  243  of  2003  dated 11.09.2003.   We are  all  unable  to follow the  said  decision as  with  due respects  to  the  said  bench  we  are  of  the  opinion  that  the  law  is  not properly applied to the set of similar facts obtaining as in this case and for this year.”

As stated above, the Tribunal observed that it was not in agreement with

the view expressed by its earlier coordinate bench in S.T.A.Nos.239-243/2003, dated

11th September, 2003.  We are surprised that despite the existence of  the  Regulation

54(a)(i) stipulating that in the event of

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conflict of decisions, the matter is required to be referred to the Chairman, that was

not done in this matter.  In that connection, we quote Regulation 54(a) in extenso as

follows:

“54(a) The Members of a Bench shall refer any proceeding before them to the Chairman with a recommendation that it may be placed before a Full Bench:-

(i) When they consider that the decision which they propose to take  in  the  proceeding  involves  a  substantial  departure  from the previous decision of the Tribunal; or

(ii) When  the  case  involves  a  point  of  law  of  general importance; or

(iii) When conflicting decisions of the Tribunal are brought to their notice; or

(iv) When they differ in opinion on any point material for the decision of the case.

While  making  the  recommendation  for  constitution  of  Full  Bench,  the Members shall formulate the specific points for determination by the Full Bench.”

In the above circumstances, without expressing any opinion on the merits of

the  case  and  keeping  contentions  on  both  sides  expressly  open,  we  direct  the

S.T.A.No.2601/2004 to be placed before the Chairman, who is requested to constitute

a special Bench in view of the conflicting opinions of the coordinate Benches of the

Tribunal in terms of Regulation 54(a)(i).   

Before concluding,  we request the Tribunal to dispose

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of the matter as expeditiously as possible.  We make it clear that the departmental

enquiry ordered to be held by the High Court is not being interfered with despite our

present order of setting aside the impugned judgment of the High Court.

Civil  Appeal  stands  allowed  accordingly,  with  no  order  as  to  costs.

Consequently, the impugned judgment of the High Court is set aside.   

                         ...................J.               (S.H. KAPADIA)

                        ...................J.

                                       (B. SUDERSHAN REDDY) New Delhi, November 28, 2008.

ITEM NO.50                 COURT NO.5               SECTION III

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      Petition(s) for Special Leave to Appeal (Civil) No(s).10123/2008

(From the judgement and order dated 11/10/2007 in STRP No.22/2006 of the HIGH COURT OF KARNATAKA AT BANGALORE)

M/S CONTINENTAL BUILDERS & DEV.THR.PROP.             Petitioner(s)

                     VERSUS

STATE OF KARNATAKA THR.C.C.T.                        Respondent(s)

(With prayer for interim relief)

Date: 28/11/2008  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE S.H. KAPADIA         HON'BLE MR. JUSTICE B. SUDERSHAN REDDY

For Petitioner(s) Mr. Soli J. Sorabjee, Sr.Adv. Mr. Ashok Kumar Sharma,Adv. Mr. Avinash Kumar Jain, Adv. Mr. Sanjay Misra, Adv.

For Respondent(s) Ms. Anitha Shenoy,Adv.

          UPON hearing counsel the Court made the following                                O R D E R  

Leave granted.

Civil Appeal stands allowed with no order as to costs in terms of the

signed order.

         (N. ANNAPURNA)       (MADHU SAXENA)         COURT MASTER     COURT MASTER

(Signed order is placed on file)