TaxTMI 
TaxTMI 
2026 (5) TMI 576
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....mount of Rs. 46,43,158/- to the plaintiff with subsequent interest at the rate of 18% per annum on Rs. 25,08,218/- from the date of suit till realization and for costs. 2.3. C.O.S.No.19 of 2022 was filed by the respondent/plaintiff for a judgment and decree directing the appellant/defendant in Appeal (CAD) No.34 of 2024 to pay the suit claim amount of Rs. 61,23,825/- to the plaintiff with subsequent interest at the rate of 18% per annum on Rs. 33,08,069/- from the date of suit till realization and for costs. 3. The gist of the plaintiff's case in both the suits, as per the plaint averments, runs thus:- The plaintiff is a manufacturer of tapioca starch, Sago (Sabudhana), modified starches and is a registered private company. The defendant(s) were purchasing sago from 2016. The defendant(s) were making payments and as well issuing 'C' Form declarations as required under the Central Sales Tax Act for the inter-State purchases made by them from the plaintiff. The plaintiff has maintained proper accounts for the sales and as well for the payments made. In respect of C.O.S.No.18 of 2022, based on the books of accounts, the balance due is Rs. 25,08,218/- and the defendant made pa....
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....t the payments towards each and every agreement was made and there was no dues of any kind. There was no outstanding amount. The plaintiff has failed to give the essential details of the business transactions. The defendant(s) also filed additional written statements stating that the plaintiff has failed to mention which particular contract in the form of purchase order was breached by the defendant(s). During the relevant time 2016 - 2017, the account of the defendant(s) was handled by the accountant, namely, Mr. Govind Jhalani who is no more. Post 2017 no business transaction was carried between the parties and all the old transactions were closed in full satisfaction. The old record of the defendant(s) pertaining to the plaintiff business could not be traced earlier. These invoices were not furnished to the defendant(s) at the relevant point of time and not found in the defendants' books of accounts. The relevant copy of the invoice enclosed with the plaint were taken by the defendant(s) to the practising Chartered Accountant for inspection. On inspection it was discovered that these invoices are falsely fabricated. There is no purchase order nor the goods were supplied to the d....
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.... admission by the defendant(s) for the receipt of the goods from the plaintiff and encashing the same by selling the goods. Without the invoice from the plaintiff and the sale bills of the defendant(s), they cannot submit the 'C' Form. Without valid purchase documents (Invoice) the defendant(s) cannot submit 'C' Forms for post 2017 period. Hence, the suits are to be decreed with exemplary cost. 6. Based on the above pleadings, the following issues were framed in both the suits:- i. Whether the Court has territorial jurisdiction to entertain the suit(s)? ii. Whether the suit(s) are within limitation? iii. Whether the plaintiff is entitled to the suit claims from the defendant(s) as prayed? iv. To what other relief? 7. In C.O.S.No.18 of 2022, the authorised representative of the plaintiff company was examined as PW1 and Ex.A1 to Ex.A8 were marked. The sole Karta of the defendant was examined as DW1 and Ex.B1 to Ex.B6 were marked. The non starter report issued by Mediation Authority submitted by plaintiff along with the plaint and the Licence copy issued to defendant by Food and Drugs Administration, Madhya Pradesh, submitted by defendant are ....
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....he respondent were carried on as per the terms and conditions agreed order-to-order basis and there is no whisper in the plaint to aver that the respondent was maintaining a running account in respect of the appellant(s) business transactions, since each order is treated separately and dealt with independently. The trial Court failed to appreciate the fact that on 29.08.2017, when the respondent received the payment of Rs. 4,59,756/- and Rs. 12,15,804/- respectively, in full and final settlement with regard to the supply of their last transactions, no demand or objection was raised by the respondent inasmuch as it was fully settled. However, after two years, the respondent came forward with Ex.A4-legal notice dated 31.10.2019 demanding Rs. 25,08,218/- and Rs. 33,08,069/- respectively, for the first time based on cooked up and fabricated invoices to defraud and deceit the appellant(s) with such false claims. The trial Court also failed to take judicial notice of Ex.B2-Inspection Report of Chartered Accountant, wherein the Auditor confirms that no purchase orders shown in Bill No.423 dated 20.02.2017 for Rs. 10,95,881/-; Bill No.71 dated 24.06.2017 for Rs. 13,54,465/-; Bill No.360 da....
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....he respondent/plaintiff that it manufactures Tapioca Starch, Sago (Sabudhana) and the appellant(s) were purchasing sago from 2016. The appellant(s) were also making payments for the purchases and issuing 'C' Form declarations as required under the Central Sales Tax Act for the inter-State purchases made by them from the respondent. The respondent states that as per the books of accounts, as against the balance of Rs. 25,08,218/-, the appellant in Appeal (CAD) No.33 of 2024 has made payment of Rs. 4,59,756/- lastly on 29.08.2017 and as against the balance of Rs. 33,08,069/-, the appellant in Appeal (CAD) No.34 of 2024 has made payment of Rs. 12,15,804/- lastly on 29.08.2017. Since the appellant(s) did not come forward to clear the outstanding amount, the respondent issued the legal notice under Ex.A4, for which there was no response. Even the appellant(s) did not turn up for mediation and a failure report was filed. Therefore, the respondent laid the suit claims before the trial Court, which have been entertained by the trial Court based on the order passed by the Hon'ble Supreme Court in Suo-moto Writ Petition No.3 of 2020 dated 10.01.2022, even though the last payment was made on ....
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....ithin three years. According to the respondent, since the last payment was on 29.08.2017 and though the suits ought to have been filed before 28.08.2020 within three years, due to the Corona pandemic, the Hon'ble Supreme Court in Suo Motu W.P.No.3 of 2020 by an order passed during the pandemic dated 10.01.2022 extended the period of limitation. Therefore, as admitted by the appellant(s), when the last payment was made on 20.07.2017 / 06.07.2017, the three year period would expire on 19.07.2020 / 05.07.2020. When the suit claims were made on 23.05.2022, as per the order of the Hon'ble Supreme Court in the suo motu writ petition, which extended the period of limitation, the suits filed by the respondent are within the period of limitation. The trial Court also framed a specific issue and also decided in favour of the respondent holding that the suit claims are not barred by limitation and they are entertainable. This Court also, while going through the entire pleadings, oral and documentary evidence and also the order passed by the Hon'ble Supreme Court in the suo motu writ petition extending the period of limitation during the pandemic period, finds that the suit claims are within t....
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....be proved. On the other hand, the respondent has proved their case by oral and documentary evidence through Exs.A6, A7 & A8. Though the appellant(s) mainly relied on the documents under Exs.B1, B2, B4 & B5, the appellant(s) have admitted the 'C' form declarations under Ex.A8 and also the invoices under Ex.A7 series. It is also to be noted that before filing the suits, the respondent sent the legal notice under Ex.A4 and there was no reply from the appellant(s). The ledger account maintained by the respondent under Ex.A6 related to the company of the appellant(s) for the period from 01.04.2016 to 31.03.2021 and the carbon copy of invoices under Ex.A7 series would establish the transactions between the parties from 30.07.2016 to 24.06.2017 and the 'C' form declarations issued by the Central Sales Tax Department under Ex.A8 submitted by the appellant(s) themselves in this regard. Since the Goods and Services Tax Act came into operation in the year 2017 subsequent to the transactions between the parties and prior to that, there were inter-State purchases, the 'C' form declarations were submitted. Therefore, the documents under Exs.A6, A7 & A8 would very well establish the transactions ....