1955 (3) TMI 13 - HC - VAT and Sales Tax

Summary

Issues:
1. Reopening of assessment under the C.P. and Berar Sales Tax Act, 1947.
2. Applicability of equitable construction in taxing statutes.
3. Powers of the Board of Revenue in appeal proceedings.
4. Authority of the Board of Revenue to stay proceedings.
5. Comparison with provisions in the Code of Civil Procedure regarding inherent powers of Courts.

Analysis:

The judgment deals with the reopening of assessment under the C.P. and Berar Sales Tax Act, 1947. The petitioners, who are assessees under the Act, were initially assessed to sales tax, which they duly paid. However, the Commissioner of Sales Tax reopened the assessment under section 22B of the Act and referred the case back for a fresh assessment. This action led to an appeal by the petitioners to the Board of Revenue, the Appellate Tribunal under sub-section (3) of section 22B, seeking a stay on the proceedings before the Regional Assistant Commissioner of Sales Tax, which was rejected due to the absence of a specific provision for stay in the Act.

The judgment discusses the principle that there is no room for equitable construction in the taxing part of a statute, but this principle does not extend to the procedural part. It is highlighted that the Board of Revenue, being the Appellate Tribunal, has the implied power to exercise all necessary powers for the proper disposal of the appeal, as stated in Maxwell on the Interpretation of Statutes. The Board is empowered to assess the correctness of the impugned order and decide on the propriety of the assessment principles set by the Commissioner of Sales Tax.

Moreover, the judgment emphasizes that where an Appellate Tribunal is empowered to prevent injustice, it also has the authority to stay proceedings that could lead to further harm or abuse of the court's process. The refusal to stay proceedings may render the appeal futile, especially if a re-assessment is conducted, necessitating another costly appeal. The judgment draws a parallel with the Code of Civil Procedure, highlighting the inherent powers of Courts to prevent abuse of legal processes, which also applies to quasi-judicial Tribunals like the Board of Revenue.

Consequently, the petitions were allowed, setting aside the orders of the Board of Revenue rejecting the applications for a stay of proceedings. The cases were remitted for adjudication in accordance with the law, with no costs imposed on the petitioners. The judgment also directed the refund of outstanding security amounts to the petitioners, concluding the matter in favor of the assessees.