1981 (9) TMI 253 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether a question of law not expressly adjudicated upon by the Tribunal can be presumed to arise out of its order under section 22(1) of the Punjab General Sales Tax Act.
2. Correctness of the Division Bench judgment in Kelvinator of India Ltd. v. Haryana State.

Issue-Wise Detailed Analysis:

1. Presumption of Question of Law Arising from Tribunal's Order:
The primary issue addressed is whether a question of law, not expressly adjudicated upon by the Tribunal nor pressed before it, can be presumed to arise out of its order under section 22(1) of the Punjab General Sales Tax Act. The court examined whether merely taking a question in the grounds of appeal or revision implies that it arises out of the Tribunal's order. The court referenced the authoritative formulation in Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd., AIR 1961 SC 1633, which provided four propositions:

1. When a question is raised before the Tribunal and dealt with by it, it arises out of its order.
2. When a question of law is raised before the Tribunal but not dealt with, it is deemed to have been dealt with and arises out of its order.
3. When a question is not raised before the Tribunal but dealt with by it, it arises out of its order.
4. When a question of law is neither raised before the Tribunal nor considered by it, it does not arise out of its order.

The court emphasized that the phrase "raised before the Tribunal" means that the point of law must have been argued or pressed before the Tribunal, not merely catalogued in the grounds of appeal or revision. The court reasoned that presuming every point of law taken in the grounds of appeal or revision to arise out of the Tribunal's order would open a Pandora's box, frustrating the purpose of section 22(1), which is to narrow the scope of reference to the High Court.

2. Correctness of the Division Bench Judgment in Kelvinator of India Ltd. v. Haryana State:
The court scrutinized the Division Bench judgment in Kelvinator of India Ltd. v. Haryana State, which had relied on the Orissa High Court's decision in Sitaram Kamal Prasad v. Collector of Sales Tax, Orissa [1955] 6 STC 339; AIR 1953 Orissa 7. The court noted that the Sitaram Kamal Prasad case had suggested that if a point was taken in the grounds of appeal or revision, it must be presumed to have been raised before the Tribunal unless expressly given up.

The court disagreed with this view, stating that it cannot be presumed that a point of law was raised before the Tribunal merely because it was included in the grounds of appeal or revision. The court held that the observations in Sitaram Kamal Prasad's case were not good law and overruled the judgment in Kelvinator of India Ltd.'s case, which had followed the Sitaram Kamal Prasad case without independent reasoning.

Conclusion:
The court concluded that a question of law not expressly adjudicated upon by the Tribunal cannot be presumed to arise out of its order merely because it was taken in the grounds of appeal or revision. The judgment in Kelvinator of India Ltd. v. Haryana State was overruled, and the case was remitted back to the Division Bench for a decision in accordance with the court's findings.