1970 (8) TMI 70 - HC - VAT and Sales Tax

Issues Involved:
1. Power of the Sales Tax Appellate Tribunal to dismiss an appeal for non-prosecution or default in appearance.
2. Validity and consistency of Regulation 9 of the Madras Sales Tax Appellate Tribunal Regulations, 1959, with the Madras General Sales Tax Act, 1959.
3. Interpretation of sub-section (3) of section 36 of the Madras General Sales Tax Act, 1959.
4. Application of the Supreme Court's interpretation of section 33(4) of the Indian Income-tax Act, 1922, to the Madras General Sales Tax Act, 1959.
5. Procedural aspects of dismissal for default and its implications.

Detailed Analysis:

1. Power of the Sales Tax Appellate Tribunal to Dismiss an Appeal for Non-Prosecution or Default in Appearance:
The court examined whether the Sales Tax Appellate Tribunal has the authority to dismiss an appeal for non-prosecution or default in appearance on the day fixed for hearing. Regulation 9 of the Madras Sales Tax Appellate Tribunal Regulations, 1959, explicitly empowers the Tribunal to dismiss an appeal for default or to dispose of it ex parte. The court noted that this regulation allows the Tribunal to readmit an appeal if sufficient cause for non-appearance is shown.

2. Validity and Consistency of Regulation 9:
The court addressed the argument that Regulation 9 is inconsistent with sub-section (3) of section 36 of the Madras General Sales Tax Act, 1959. The court held that there is nothing in the language of sub-section (3) that renders Regulation 9 inconsistent. The words "in disposing of an appeal" in the sub-section are interpreted to mean getting rid of an appeal, which includes dismissal for default. The court concluded that Regulation 9 is consistent with the Act and valid.

3. Interpretation of Sub-section (3) of Section 36:
The court analyzed sub-section (3) of section 36, which outlines the types of orders the Tribunal can pass. It was determined that the phrase "such other orders as it may think fit" in sub-clause (iii) is broad enough to include orders not on the merits of the appeal, such as dismissal for default. The court emphasized that this interpretation aligns with the legislative intent and the general scheme of the Act.

4. Application of Supreme Court's Interpretation of Section 33(4) of the Indian Income-tax Act, 1922:
The court distinguished the scheme of the Madras General Sales Tax Act, 1959, from that of the Indian Income-tax Act, 1922. The Supreme Court in Commissioner of Income-tax v. S. Chenniappa Mudaliar held that the disposal of an appeal by the Income-tax Appellate Tribunal could only be on the merits. However, the Madras General Sales Tax Act, 1959, does not contain similar provisions for reference to the High Court on questions of law. Instead, it provides for a revision to the High Court, which has the power to decide questions of law finally. Therefore, the court concluded that the interpretation of section 33(4) of the Income-tax Act does not apply to section 36(3) of the Madras General Sales Tax Act.

5. Procedural Aspects of Dismissal for Default:
The court recognized that a provision for dismissal for default is a procedural matter. It referred to precedent supporting the validity of procedural rules that allow for dismissal for non-appearance. The court emphasized that Regulation 9, which allows the Tribunal to dismiss an appeal for default, is a procedural regulation consistent with the Act. However, the court also noted that the power to dismiss for default should be used sparingly and with a view to advancing the cause of justice.

Conclusion:
The court concluded that Regulation 9 of the Madras Sales Tax Appellate Tribunal Regulations, 1959, is valid and consistent with the Madras General Sales Tax Act, 1959. The Tribunal has the power to dismiss an appeal for default, but this power should be exercised judiciously. The orders of the Tribunal dismissing the appeals for default were set aside, and the Tribunal was directed to dispose of the appeals afresh. Petitions were allowed with no costs.

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