2017 (2) TMI 870 - HC - VAT and Sales Tax

Whether respondent No.6 is eligible to be a member of the Commercial Taxes Tribunal as he is said to have no experience in administration of accounts and financial Management as contemplated in Section 9(3)(c) of the Act in the category of serving as retired Government servant? Held that - Mere fact that at one point of time, the officer was working with the Commercial Taxes Department, cannot be a reasonable suspicion to disqualify him for appointment. He has no interest, either pecuniary or otherwise, which may afford strongest proof against his neutrality. Therefore, mere fact that he was serving the State Government, he will have a natural bias towards the State is too wide a proposition to be accepted. In view of the development of law as to when non-pecuniary bias will vitiate an action, though he will have a natural bias towards the State is not justified. The expressions administration of Accounts or financial Management are not defined under the Act. Therefore, such expressions have to be given ordinary meaning to such words. The argument that Clause (c) has to be read ejusdem generis to Clause (a) and (b) of Section 3 to contend that the member has to be qualified Chartered Accountant or having fair knowledge of accounts is not a legitimate inference. Though the one post is popularly called as the Member (Accounts), the experience of a candidate of working in Commercial Taxes Department would be helpful in discharge of the appeals by the Tribunals in the matter of Commercial Taxes. The experience which he has gained while working in the Commercial Taxes Department is in the field of Applied Accounts, therefore, it cannot be said that he does not have experience in administration of accounts. The assessment undertaken by the candidates gives him insight of the financial management given by the assessees - Therefore, it cannot be said that respondent No.6, appointed as Member (Accounts) is ineligible for appointment as a member in view of the fact that he has no experience of administration of accounts or financial management. Still further, only one candidate is a Chartered Accountant whereas another candidate is a Commerce and Law Graduate and has done M.B.M. in Finance. The three candidates are the members of Bihar Finance Service and have worked in the Commercial Taxes Department. Therefore, the State had to choose out of the limited choice available. Thus, respondent No.6 cannot be said to be wholly ineligible candidate and a wrong choice to discharge the duties as Member (Accounts). Petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Eligibility of respondent No.6 for appointment as Member (Accounts) of the Commercial Taxes Tribunal under Section 9(3)(c) of the Bihar Value Added Tax Act, 2005.
2. Alleged bias due to the appointment of two members from the Commercial Taxes Department.

Detailed Analysis:

1. Eligibility of Respondent No.6:

The petition challenges the notification dated 3rd September 2015, appointing respondent No.6 as Member (Accounts) of the Commercial Taxes Tribunal under Section 9(3) of the Bihar Value Added Tax Act, 2005. The Tribunal consists of three members: a Chairperson who is a retired High Court Judge or a judicial officer of the rank of District Judge, one member from the Commercial Taxes Department not below the rank of Joint Commissioner, and a third member who must meet specific qualifications under Section 9(3)(c).

The qualifications under Section 9(3)(c) include:
- At least ten years of practice as a Chartered Accountant or registered Accountant.
- An officer of the Indian Audit and Account Service not below the rank of Deputy Accountant-General.
- A Government servant with at least four years of experience in the administration of accounts or financial management.

The controversy centers on whether respondent No.6, who retired from the Commercial Taxes Department on 31st August 2015, meets the criteria of having experience in "administration of accounts and financial management." The State argues that taxation is integral to government finance, and thus, experience in commercial taxes administration qualifies as experience in accounts and financial management. The petitioner contends that the appointment of another officer from the Commercial Taxes Department is implicitly prohibited by Section 9(3).

Upon reviewing the candidates' qualifications, the court noted that respondent No.6 had 28 years of practical experience in the Commercial Taxes Department and had dealt with significant clients like TISCO and TELCO. The court concluded that the experience gained in the Commercial Taxes Department qualifies as experience in the administration of accounts and financial management, making respondent No.6 eligible for the appointment.

2. Alleged Bias:

The petitioner argued that appointing two members from the Commercial Taxes Department would create a bias towards state revenue, compromising the Tribunal's impartiality. The court examined the principles of bias and impartiality, referencing several judgments, including AIR 1961 SC 93 and AIR 1959 SC 1376, which emphasize that statutory tribunals are expected to act fairly and without bias, even when government interests are involved.

The court found that mere past employment with the Commercial Taxes Department does not constitute a reasonable suspicion of bias. The member's duty is to implement the Act and its rules impartially. The court held that the argument of inherent bias due to prior association with the Commercial Taxes Department is too broad and not justified.

Conclusion:

The court dismissed the writ petition, affirming that respondent No.6 is eligible for the appointment as Member (Accounts) and that the appointment does not inherently bias the Tribunal. The expressions "administration of accounts" and "financial management" were interpreted in their ordinary sense, and the experience in the Commercial Taxes Department was deemed relevant and sufficient for the role. Thus, the appointment was upheld as valid and lawful.