1959 (8) TMI 40 - HC - VAT and Sales Tax

Summary

Issues:
Petition under Article 226 of the Constitution against the order of the Sales Tax Tribunal dismissing the appeal for default. Interpretation of the notice served by the Tribunal and the legality of dismissing the appeal for default.

Analysis:

Issue 1: Petition under Article 226
The petitioner filed a petition under Article 226 challenging the order of the Sales Tax Tribunal dismissing the appeal for default. The petitioner was assessed to sales tax, and his appeals were registered before the Sales Tax Tribunal. The Tribunal served a notice in Form XXV, stating that the appeal would be disposed of on merits even if the petitioner failed to appear.

Issue 2: Interpretation of the Notice
The key question was whether the Tribunal, after explicitly stating in the notice that the appeal would be decided on merits even in the absence of the petitioner, could dismiss the appeal for default. The petitioner argued that he was misled by the notice, believing that the Tribunal would consider the lower courts' judgments and provide reasons for its decision even if he did not appear.

Rule 58 and Rule 60 of Orissa Sales Tax Rules, 1947
The Court examined Rules 58 and 60 of the Orissa Sales Tax Rules, which dealt with the notice of hearing and the Tribunal's authority to dismiss the appeal for default. While Rule 58 mandated that the appeal would be decided ex parte if the appellant did not appear, Rule 60 provided the Tribunal with the discretion to either dismiss the appeal or decide it on merits in the absence of the parties.

Validity of Rules 58 and 60
The petitioner's counsel questioned the vires of Rules 58 and 60, arguing that they exceeded the rule-making power conferred by the Act. However, the Court did not delve into this issue as it was not necessary for the case at hand.

Decision and Ruling
The Court held that the petitioner was prejudiced by the Tribunal's decision to dismiss the appeal for default, considering the language of the notice and the petitioner's reasonable expectation based on it. The Court found no defect in the notice issued in Form XXV, which was in line with Rule 58. Consequently, the application was allowed, the Tribunal's order was set aside, and the Tribunal was directed to restore the appeals and dispose of them according to law.

In conclusion, the Court emphasized that once the Tribunal informs a party that the appeal will be decided on merits even in their absence, it cannot subsequently dismiss the appeal for default, as it would cause serious prejudice to the party.