2014 (11) TMI 924 - HC - VAT and Sales Tax

Release of trucks - Maintainability of appeal before tribunal - Uttarakhand Value Added Tax Act, 2005 - truck was not possessing relevant documents and failed to comply with the procedures - Held that - under Section 43(8), there is a clear discretion vested with the authority to exercise the power to order release, as provided by it. We are fortified in the said view when we notice that the lawgiver mandates that, whenever power is exercised by giving a direction, it must be for reasons to be recorded. The provision containing the limitation on the exercise of power that there must be reasons recorded, itself, shows that the Legislature was anxious to protect the interest of the revenue. The power was, no doubt, lodged with the superior officer; but, the Legislature has taken great care to see that the power is not exercised in a routine manner. It unerringly points out that the power under Section 43(8) is a purely discretionary power. No doubt, any discretion vested with any public officer must be exercised bona fide and according to well established principles relating to exercise of discretion by statutory authorities. The Legislature has used the word may in Section 43(8) and that, again, goes a long way to persuade us to hold that the power is discretionary. The legislative intent was that an appeal will lie against a direction for release ordered under Section 43(8) and, when it is refused, no appeal will lie under Section 53. It may not be out of place to record that, subsequently in the year 2012, Section 56(b), itself, was amended by the Legislature and, after the amendment in 2012, Section 56(b) does not contain the prohibition against an appeal or revision against action under Section 43(8). Therefore, it would appear to be an error, which was probably noticed by the Legislature as Section 53 and Section 56(b) were completely inconsistent with each other. Incidentally, we may notice in the Explanation to Section 53 that the person, who could file the appeal, includes the Commissioner. But, again, we notice curiously that it is in relation to an order and not in relation to a direction. But, nonetheless, we would think that, in view of the word direction under Section 43(8), the Legislative intent is clear that it is only a direction under Section 43(8) ordering release of the goods, which would be appealable. The Revision is to be allowed and the same is allowed. We answer the question of law in regard to the maintainability of the appeal in favour of the revisionist. The impugned order, therefore, cannot be sustained on the ground that the appeal was not maintainable. Therefore, the impugned order is set aside. - Decided in favor of revenue.

Issues Involved:

1. Maintainability of Second Appeal under Section 43(8) of the Uttarakhand VAT Act, 2005.
2. Jurisdictional excess by the Commercial Tax Tribunal, Haldwani.
3. Availability of extraordinary remedy under Article 226 of the Constitution of India.
4. Justification of the Tribunal's order to release goods without security deposit.
5. Adverse remarks against Assistant Commissioner (Mobile Squad), Commercial Tax, Rudrapur.

Issue-wise Detailed Analysis:

1. Maintainability of Second Appeal under Section 43(8) of the Uttarakhand VAT Act, 2005:

The revision petition challenges the Tribunal's decision to entertain a second appeal against the Deputy Commissioner's order under Section 43(8) of the Uttarakhand VAT Act, 2005. The court analyzed whether the appeal was maintainable, noting that Section 53 of the Act provides for an appeal against a direction issued under Section 43(8). However, Section 56(b) bars appeals against orders or actions under Section 43(8). The court concluded that an appeal is maintainable only when a direction for release is given under Section 43(8). Since the Deputy Commissioner refused to release the goods, no appeal could be maintained under Section 53.

2. Jurisdictional Excess by the Commercial Tax Tribunal, Haldwani:

The court examined whether the Tribunal exceeded its jurisdiction by entertaining and deciding the second appeal against the Deputy Commissioner's order. It was found that the Tribunal acted beyond its jurisdiction as the appeal was not maintainable in the absence of a direction for release under Section 43(8). The Tribunal's decision to set aside the Deputy Commissioner's order and release the trucks was invalid due to jurisdictional overreach.

3. Availability of Extraordinary Remedy under Article 226 of the Constitution of India:

The court addressed whether an aggrieved person could seek an extraordinary remedy under Article 226 of the Constitution of India. It was noted that, while the appeal was not maintainable, the aggrieved party could still challenge the Deputy Commissioner's order through writ proceedings under Article 226, ensuring that the person is not left without a remedy.

4. Justification of the Tribunal's Order to Release Goods Without Security Deposit:

The Tribunal's order to release the goods without a security deposit was scrutinized. The court observed that the power under Section 43(8) is discretionary and must be exercised with reasons recorded in writing. The Tribunal's decision to release the goods without any security deposit was found to be unjustified as it overlooked the mandatory provisions of Section 50(1) of the VAT Act, which aim to protect the revenue's interest.

5. Adverse Remarks Against Assistant Commissioner (Mobile Squad), Commercial Tax, Rudrapur:

The court reviewed the adverse remarks made by the Tribunal against the Assistant Commissioner. It was highlighted that the Tribunal made unwarranted observations against officers who were not in charge of the mobile unit. The court emphasized that the officer acted in accordance with the law, as the truck did not have the required transit pass or trip sheet. The adverse remarks were deemed inappropriate and were set aside.

Conclusion:

The court allowed the revision petition, setting aside the Tribunal's order on the ground that the appeal was not maintainable. It clarified that the respondent could challenge the Deputy Commissioner's order through appropriate proceedings. The judgment underscores the discretionary nature of the power under Section 43(8) and the necessity of adhering to statutory provisions to protect revenue interests.

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