Writ Jurisdiction Cannot Be Utilised By A Litigant Only To Take Chance: Supreme Court

"In our view, the extraordinary writ jurisdiction cannot be utilised by a litigant only to take chance and then to seek recourse to the other remedy after failing in its attempt on the basic merits of the case before the High Court", the Supreme Court remarked in a judgment delivered on Wednesday (13 Jan 2021).

The bench comprising Justices AM Khanwilkar and Dinesh Maheshwari observed that a litigation cannot be allowed to be unendingly kept alive at the choice of a litigant.

The court observed thus while dismissing an appeal filed against the judgment passed by High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh. The High Court, while dismissing the writ petition filed by Vellanki Frame Works, had upheld the assessment orders passed by the Commercial Tax and held that the transactions in question were not the sales in the course of import but had been inter-State sales, liable to Central Sales Tax; and denied the exemption claimed under Section 5(2) of the Central Sales Tax Act, 1956.

The legal issue considered by the bench was whether the sales in question took place in the course of the import of the goods into the territory of India and qualify for exemption under Section 5(2) of the CST Act? Referring to various judgments on the subject, the bench concluded that the High Court was right in observing that once the appellant got released the goods after filing the bill of entry for home consumption, the import stream dried up and the goods got mixed in the local goods.

Regarding the submission that, in view of the disputed questions of fact involved, the appellant may be relegated to the remedy of appeal, the bench observed:

Despite being aware of the availability of remedy of statutory appeal, consciously chose to file writ petitions against the assessment orders aforesaid and consciously contested the entire matter in the High Court..... After having consciously invoked the writ jurisdiction of the High Court and having contested the matter on merits, the appellant cannot now be allowed to reopen the matter in appeal.

The judgment also discussed the concept of 'sale in the course of import'  and 'Definition of importer'

'Sale in the course of import' 

The phrase 'sale in the course of import' carries three essential features - (i) that there must be a sale; (ii) that goods must actually be imported into the territory of India; and (iii) that the sale must be part and parcel of the import. A sale would become part and parcel of import if it either occasions such import or if it occurs by way of a transfer of document of title to the goods before the goods cross the customs frontiers of India.

'Definition of importer'

Though the definition of importer includes owner or any person holding out himself as the importer; and this definition of importer is not really relevant to the question of title but, that does not mean that a person who holds out himself to be the importer; and who files the bill of entry for home consumption; and who is assessed for customs duty; and whose suggestion about transfer of title to a third person is not established by any reference to any official record, the transfer on high seas may be presumed on mere suggestion about the alleged endorsement of bill of lading

CASE: VELLANKI FRAME WORKS vs COMMERCIAL TAX OFFICER  [CIVIL APPEAL NOs. 1322-1323 of 2019]
CORAM: Justices AM Khanwilkar and Dinesh Maheshwari
CITATION:  LL 2021 SC 19

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