2017 (12) TMI 623 - HC - VAT and Sales Tax

Whether after constituting a Bench of three members in terms of Sub-Section (6) of Section 11 of the Maharashtra Value Added Tax Act, 2002 the learned President of the Maharashtra Sales Tax Tribunal could have passed an order that reference to a Bench of three members was unwarranted and whether the learned President could have alone disposed of the Appeal on merits? Held that - In the present case, the roznama shows that though after hearing the case fully, judgment was reserved by a Bench of three members, on 5th December, 2016, the Appeal was placed only before the learned President - In his order recorded in the roznama, the learned President has stated that both the parties have been informed that the Appeal cannot be referred to a Bench consisting of three members. After the Bench of three members had fully heard the Appeal, only the said Bench could have come to the conclusion that the reference made to the said Bench of three members was unwarranted. Even in the report submitted by the learned President, he has not stated that even the other two members constituting the Bench of three members passed a similar order. The roznama shows that on 5th December, 2016, the Appeal was placed only before the learned President and the Roznama order was signed only by the learned President. Thus, the order that the reference was unwarranted has been passed only by one of the three members forming a part of the Bench of three members. The order dated 5th December, 2016 will have to be held as completely illegal and consequently the judgment and order dated 7th December, 2016 delivered by the learned President will have to be set aside - Appeal is restored to the file of the Maharashtra Sales Tax Tribunal.

Summary

Issues Involved:
1. Interpretation of Sub-Section (6) of Section 11 of the Maharashtra Value Added Tax Act, 2002.
2. Validity of the President of the Maharashtra Sales Tax Tribunal passing an order alone after constituting a Bench of three members.

Analysis:
1. The judgment dealt with the interpretation of Sub-Section (6) of Section 11 of the Maharashtra Value Added Tax Act, 2002. The Appeal involved a question of law regarding the President of the Maharashtra Sales Tax Tribunal passing an order alone after constituting a Bench of three members. The Tribunal had initially referred a case to a Bench of two members due to a difference of opinion. The Bench referred the question to the President for appropriate action as per the Act and Regulations. The President constituted a Bench of three members, including himself, to hear the Appeal fully and close it for orders.

2. Regulation no. 28 of the Bombay Sales Tax Tribunal Regulations, 1960, provided the procedure to be followed when members of a Bench are equally divided. The regulation allowed the President, if not part of the original Bench, to hear the issue of disagreement or refer it to other members, including himself, if a substantial point of law was involved. In this case, the President adopted the correct procedure by constituting a Bench of three members to hear the Appeal fully and deliver judgment.

3. However, the issue arose when, after the full hearing, the Appeal was placed only before the President, who then unilaterally decided that the reference to a Bench of three members was unwarranted. The judgment highlighted that the President's order was illegal as it was passed without the consent of the other two members of the Bench. The judgment emphasized that even if the order was legal, the President should have fixed a fresh hearing before him, considering the initial hearing was before a Bench of three members.

4. Consequently, the judgment held the President's order and the subsequent judgment as illegal, setting them aside. The Appeal was remanded for consideration by the same Bench of three Judges, emphasizing that the Bench should decide the issue in accordance with the law. The judgment clarified that the decision was solely on a legal issue and not a reflection on the President of the Tribunal.

5. In conclusion, the judgment disposed of the Appeal by setting aside the impugned judgment and order, restoring the Appeal to the Tribunal for a fresh hearing by the same Bench of three Judges. The judgment kept all questions regarding the merits of the controversy open for the Bench to decide in accordance with the law. The Appeal was partly allowed with no order as to costs, and the report submitted by the President was to be kept on record in a sealed envelope.