Form-C burden and urgent relief exception sustain recovery claim despite mediation objection

A buyer's claim for differential tax and unpaid consideration succeeded where the contract made the price inclusive of taxes and required Form-C, but the seller proved it had incurred additional tax because Form-C was not furnished. The court held that the defendant bore the burden of proving dispatch of Form-C and failed to do so through any supporting documentary evidence, so the plaintiff could recover the claimed amount. On pre-institution mediation, the suit was not barred under Section 12A of the Commercial Courts Act because it was accompanied by an application for urgent interim relief, bringing it within the urgency-based exception; the prospective operation of the mandatory-compliance ruling also preserved the suit.

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Issues: (i) Whether the plaintiff was entitled to recover the differential tax amount and balance consideration, including the amount paid on account of non-furnishing of Form-C; (ii) Whether the suit was liable to be dismissed for non-compliance with Section 12A of the Commercial Courts Act, 2015.

Issue (i): Whether the plaintiff was entitled to recover the differential tax amount and balance consideration, including the amount paid on account of non-furnishing of Form-C.

Analysis: The purchase order expressly provided that the price was inclusive of taxes and that Form-C would be provided. The invoice reflected CST at 2% against Form-C. The plaintiff proved, through the assessment material and waiver order, that it had in fact suffered and paid the differential tax attributable to the defendant's failure to furnish Form-C. The defendant did not discharge the burden of proving that Form-C had been forwarded, and no supporting communication or documentary proof was produced. The attempt to rely on additional evidence at the appellate stage did not displace the plaintiff's proved liability.

Conclusion: The plaintiff was entitled to recover the claimed amount of Rs. 9,54,094/-, and the finding on this issue was in favour of the plaintiff.

Issue (ii): Whether the suit was liable to be dismissed for non-compliance with Section 12A of the Commercial Courts Act, 2015.

Analysis: The suit was instituted along with an application for urgent interim relief under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908. In the facts of the case, the plaintiff's need for immediate protection could not be treated as a mere ruse. Although pre-institution mediation under Section 12A is mandatory, the urgency-based exception was attracted on the facts. The Supreme Court's pronouncement on mandatory compliance was noted, but its prospective operation preserved the present suit.

Conclusion: The suit was not barred for want of pre-institution mediation, and this issue was decided against the appellants.

Final Conclusion: The decree in favour of the plaintiff was upheld, and the appeal failed on both grounds.

Ratio Decidendi: Where the contract expressly requires Form-C to enable concessional sales tax, the party asserting supply of Form-C bears the burden of proving it by cogent evidence; and pre-institution mediation under Section 12A does not bar a suit where the facts bring the matter within the urgent interim relief exception, particularly in view of the prospective operation of the mandatory-rule decision.

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