1997 (9) TMI 502

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.... M. JAGANNADHA RAO, J.-The appellant before us is the Central Arecanut Marketing and Processing Co-operative Ltd., Mangalore. It was impleaded as the second respondent in Writ Petition No. 15495 of 1981 filed by the respondents 2 to 19 in the Karnataka High Court. The writ petition filed in 1981 was allowed after nine years by the High Court by judgment dated 27th August, 1990 (Kamat & Co. v. State of Karnataka [1991] 80 STC 226.) 2.. The relevant facts of the case are as follows: The writ petitioners were all registered dealers under the Karnataka Sales Tax Act, 1957 and claimed to be purchasers of arecanut from local registered dealers by paying sales tax on the first sale in the State and contended that thereafter they sold the same o....

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....of the exemption stood extended from March, 1984 to all other traders. In other words, it was pointed out that the issue itself had become academic. 4.. The High Court, even though it noticed that the benefit of the exemption notification of September, 1977 in favour of all traders was issued by March, 1984, proceeded to go into the merits of the case and quashed the exemption notification of September, 1977, without considering the peculiar consequences of such quashing as against the appellant in 1990. It is against the said judgment of the High Court that this appeal has been preferred. 5.. In this appeal, the respondent-writ petitioners have not chosen to appear. The learned counsel for the State has supported the case of the appe....

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....y appear to be so." 7.. But the High Court went on to observe that it was none the less deciding the issue, so that in future when power is exercised by the State, the State could benefit by what was stated in the judgment. 8.. In our view, the High Court ought not to have gone into the question merely for the purpose of the future and, at any rate, ought to have noticed the highly inequitable consequences of its interference so far as the appellant-society was concerned. The appellant was given the exemption by the State, it was challenged by the respondents, the High Court did not suspend the notification pending the writ petition, the appellant was statutorily prohibited from collecting the sales tax which was exempt and when the w....