TaxTMI 
TaxTMI 
2016 (11) TMI 1754
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....nd others, which was filed as a Public Interest Litigation, challenging the order dated 18.012.2000 issued by the third respondent Principal Secretary, Department of Forests, Govt. of Uttar Pradesh, Lucknow, the Division Bench of this Court vide interim order dated 20.12.2000, restrained the Managing Director, Forest Corporation, Uttar Pradesh from withdrawing any amount deposited against the name of Uttar Pradesh Forest Corporation kept in the reserved fund of the Uttar Pradesh Forest Corporation. The above mentioned writ petition was disposed of vide order dated 11.07.2005 in view of the Government Orders which have been mentioned in the selfsame order. 3) According to the petitioner corporation, the respondents be directed to pay the entire amount of money due to the petitioner pursuant to the order dated 11.07.2005 passed by Hon'ble Division Bench of this Court and the Government Orders dated 13.02.2004 and 28.07.2004 in the ratio of 46:54, i.e., 54%, to the petitioner Uttaranchal Forest Development Corporation. 4) After the reorganization of the State of Uttar Pradesh, w.e.f. 09.11.2000, bifurcation of various government companies and statutory corporations was on the an....
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....re, for sharing the tax liability, the Uttaranchal Forest Development Corporation has to implead itself in all cases of income tax. 10) In para 10 of the counter affidavit, it has been stated that several meetings took place between the two States for implementing the orders of Govt. of India. The last meeting was held on 16.02.2005, in which it was decided that Uttaranchal Forest Development Corporation would obtain the consent of Uttarakhand Government on agreed points and will intimate to Forest Department of Uttar Pradesh accordingly. On receiving the consent of the Uttarakhand Government, the Forest Department would seek approval from the Government of Uttar Pradesh and thereafter when approval / consent is received from both the State Governments, the successor corporations of both the States shall complete the formalities of division of assets / liabilities and of personnel / posts, as early as possible. 11) As per para 11 of the counter affidavit, the consent of Uttarakhand Government is still awaited on the points agreed upon in the meeting dated 16.02.2005 and, therefore, the matter is pending at the end of Uttaranchal Forest Development Corporation. In para 12 of t....
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....er Uttar Pradesh or Uttaranchal will pass on to the Successor Corporation of the State in which they are located. (b) Movable assets and stores of the field units shall be transferred on the basis of location. Stores, furniture and vehicles of the Head Office shall be divided according to the year of purchase in the ratio 46:54 between the successor Corporation of Uttar Pradesh and Uttaranchal. (ii) Liabilities: (a) Asset specific liability of the erstwhile Corporation shall pass on to the Successor Corporation of the Successor State to which the asset has been allocated. (b) Liability of the erstwhile Corporation that cannot be assigned to any asset shall be apportioned between the two Corporations of Uttar Pradesh and Uttaranchal in the ratio of 46:54. (iii) Employees: Employees of the erstwhile Corporation shall be allocated to Forest Corporation of the Successor States of Uttar Pradesh and Uttaranchal in the manner already agreed upon between the States. (iv) Reserve and surplus: The reserve and surplus as reflected in the balance sheet of erstwhile Corporation for the year ended 31st March 2001 will ....
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....existing State of Uttar Pradesh or any part thereof has, by virtue of the provisions of Part II become an inter-State body corporate, then, the body corporate shall, on and from the appointed day, continue to function and operate in those areas in respect of which it was functioning and operating immediately before that day, subject to such directions as may from time to time be issued by the Central Government, until other provision is made by law in respect of the said body corporate. (2) Any directions issued by the Central Government under sub-section (1) in respect of any such body corporate shall include a direction that any law by which the said body corporate is governed shall, in its application to that body corporate, have effect subject to such exceptions and modifications as may be specified in the direction." 19) At this stage of dictation, it will be appropriate to quote Para 8 of the counter affidavit of respondent corporation here-in-below for convenience: "The U.P. Government sent a representation dated 28.04.2004 on behalf of U.P. Forest Corporation to the Government of India in which it was also requested that there is huge liability of....
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.....04.2001, therefore, needs to be rectified. Accordingly, the Registration u/s 12A of the I.T. Act is allowed from 25.11.1974, the date of creation of the AOP(Trust) by an enactment i.e. U.P. Forest Corporation Act." 21) The necessary consequence, therefore, would be that income of the AOP (Trust) is exempted from the income tax liability. Now, the only income which is assessable to tax after the exemption certificate under Section 12AA of the Income Tax was granted, is only the interest accrued on the FDR of the AOP(Trust). Clause (iv) of Notification dated 13.02.2004 provides that the reserve and surplus as reflected in the balance sheet of erstwhile corporation for the year ended 31.03.2001 will be apportioned between the successor corporation of Uttar Pradesh and Uttaranchal in ratio of 46:54, and it cannot be said that the interest accrued on the FDR of the AOP(Trust) is liability, which should be apportioned among the successor corporations of two States. 22) In letter dated 17.11.2011, written by the Managing Director of U.P. Forest Corporation to the Principal Secretary to the Government of U.P. in the Forest department, it is mentioned that, as per balance sheet, the ....
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....el for the respondent corporation has already been negatived by this Court in Paras 20 and 21 of this judgment. 25) This fact is under no dispute that the money has been kept in the reserve fund of the U.P. Forest Corporation. This fact is also under no dispute that when two States were carved out from the parent State, the successor State of Uttarakhand created its own Forest Development Corporation which became functional from 01.04.2001. Apportionment of the assets of the statutory corporations, therefore, became imminent. The successor States tried to made an attempt to settle their dispute relating to their Forest Corporations by mutual agreement, but when they failed to settle the same through mutual agreement, Central Government stepped in and issued a Notification on 13.02.2004 to the effect that reserve and surplus as reflected in the balance sheet of the erstwhile corporation for the year ending 31.03.2001, will be apportioned between the successor corporations of Uttar Pradesh and Uttaranchal in the ratio of 46:54. On the representation of the Government of Uttar Pradesh, the Government of India, vide order dated 28.07.2004 clarified that the MHA order dated 13.02.200....