1970 (3) TMI 115 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of Regulation 9(1) of the Tamil Nadu Sales Tax Appellate Tribunal Regulations, 1959.
2. Whether Regulation 9(1) is ultra vires of Section 36(3) of the Tamil Nadu General Sales Tax Act, 1959.
3. Tribunal's power to dismiss an appeal for default of appearance.
4. Interpretation of the statutory mandate under Section 36(3) of the Act.
5. Applicability of precedents and judicial interpretations.

Detailed Analysis:

1. Validity of Regulation 9(1) of the Tamil Nadu Sales Tax Appellate Tribunal Regulations, 1959:
The primary issue in these cases is the validity of Regulation 9(1), which allows the Tribunal to dismiss an appeal for default of appearance. The petitioners argue that this regulation is inconsistent with Section 36(3) of the Tamil Nadu General Sales Tax Act, 1959, which mandates the Tribunal to dispose of appeals on their merits.

2. Whether Regulation 9(1) is ultra vires of Section 36(3) of the Tamil Nadu General Sales Tax Act, 1959:
The court examined whether Regulation 9(1) is ultra vires of Section 36(3) of the Act. Section 36(3) provides that the Tribunal, in disposing of an appeal, may confirm, reduce, enhance, or annul the assessment or penalty, set aside the assessment and direct a fresh assessment, or pass such other orders as it thinks fit. The petitioners contend that Regulation 9(1) is repugnant to this provision as it allows dismissal for default without addressing the merits of the appeal.

3. Tribunal's Power to Dismiss an Appeal for Default of Appearance:
The court scrutinized the Tribunal's power to dismiss an appeal for default of appearance. It was argued that the Tribunal's mandate under Section 36(3) is to dispose of appeals on their merits, and dismissal for default does not constitute a disposal on merits. The court noted that the statutory mandate does not condition the Tribunal's duty to dispose of appeals on the appearance of the parties.

4. Interpretation of the Statutory Mandate under Section 36(3) of the Act:
The court emphasized the significance of the words "in disposing of an appeal" in Section 36(3). It referred to judicial interpretations, including the Supreme Court's view that an appeal requires a review and retrial of the case on its merits. The court concluded that Section 36(3) requires the Tribunal to decide appeals on their merits, irrespective of the appellant's presence.

5. Applicability of Precedents and Judicial Interpretations:
The court relied on precedents, particularly the Supreme Court's decision in Commissioner of Income-tax v. S. Chenniappa Mudaliar, which invalidated a similar rule allowing dismissal for default under the Income-tax Act. The court found that the principles from this decision applied to the present case, despite differences in statutory language. The absence of the word "thereon" in Section 36(3)(a)(iii) did not alter the requirement for the Tribunal to dispose of appeals on their merits.

Conclusion:
The court held that Regulation 9(1) is inconsistent with Section 36(3)(a)(iii) of the Act and Rule 29 of the Tamil Nadu General Sales Tax Rules, 1959. Consequently, the Tribunal's orders dismissing appeals for default of appearance and subsequent refusals to restore such appeals were invalid. The court directed the Tribunal to restore the respective appeals and dispose of them in accordance with the law. The petitions were allowed without any order as to costs.

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