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of <h1>Appellate court partially overturns lower court decision, awards damages and interest in breach of contract case</h1> <h3>Lloyd Bitumen Products Pvt. Ltd. Versus Oil and Natural Gas Commission</h3> The appellate court partly allowed the appeal, overturning the lower court's decision on the limitation issue and dismissal decree. The suit by Lloyd ... - Issues Involved:1. Recovery of Central Sales Tax dues.2. Jurisdiction of the City Civil Court.3. Limitation period for filing the suit.4. Submission of Central Sales Tax declaration form ('C' form).5. Liability to pay interest on the amount due.Detailed Analysis:1. Recovery of Central Sales Tax Dues:The plaintiff, Lloyd Bitumen Products Private Limited, filed a suit against the defendant, Oil and Natural Gas Commission, to recover Central Sales Tax dues amounting to Rs. 23,163.21. The plaintiff sold and delivered coal-tar enamel and primer to the defendant, who agreed to submit the requisite Central Sales Tax declaration form within 30 days or pay an additional 10% tax. The defendant paid 3% tax but failed to submit the declaration form, leading to the plaintiff's assessment at the higher rate. The lower court found an implicit agreement that the defendant would bear the 10% tax if the form was not submitted.2. Jurisdiction of the City Civil Court:The defendant contested the jurisdiction of the City Civil Court to entertain the suit. However, the lower court ruled in favor of the plaintiff, confirming that the court had territorial jurisdiction to try the case.3. Limitation Period for Filing the Suit:The primary issue on appeal was whether the suit was barred by limitation. The lower court held that the suit was barred as it was not filed within three years from the date of supply or the last bill payment. The plaintiff argued that the limitation period should start from the date of the defendant's refusal to submit the declaration form (9th January 1976). The appellate court agreed, stating that the cause of action arose on the refusal date, making the suit filed on 22nd September 1976 within the limitation period.4. Submission of Central Sales Tax Declaration Form ('C' Form):The defendant argued that there was no contract requiring the submission of the 'C' form and that the plaintiff's claim was contingent on the free supply of 48.118 M.T. of coal-tar enamel as replacement for defective materials. The court found that the defendant's refusal to submit the form on 9th January 1976, based on an extraneous condition, constituted a breach of contract. The plaintiff's right to recover the tax at the higher rate arose from this breach.5. Liability to Pay Interest on the Amount Due:The plaintiff claimed interest at 6% per annum on the amount due. The appellate court, agreeing with the plaintiff's arguments, awarded a sum of Rs. 21,970 with proportionate costs and simple interest at 6% from the judgment date until realization.Conclusion:The appeal was partly allowed, setting aside the lower court's judgment on the issue of limitation and the decree of dismissal. The suit was decreed in part for Rs. 21,970 with proportionate costs and interest, while the cross-objection by the defendant was dismissed.
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