2021 (4) TMI 606 - HC - VAT and Sales Tax

Doctrine of Bias - Levy of Entry Tax and penalty - entry of all goods (other than motor vehicles) into a local area within the state of Goa - tax or penalty in respect of the import of CAB into the State of Goa under the Entry Tax Act - validity of provisions of Section 3 of the Entry Tax Act insofar as it is invoked as a charging provision for the levy of tax on entry of goods into a local area within the State of Goa - HELD THAT - Shri Ashok Rane, ought not to have taken up and disposed of the petitioner's appeal against the order dated 29.03.2014 for the Assessment Year 2010-11. The Tribunal, with respect, erred or rather failed to exercise jurisdiction vested in it, in not upholding the petitioner's contention based on the Doctrine of Bias, in the peculiar facts and circumstances of the present case. The impugned orders dated 14.01.2019 made by Shri Ashok Rane as the First Appellate Authority and the order of the Tribunal dated 27.02.2020 upholding the same, are liable to be set aside and are hereby set aside. The petitioner's appeal against the order dated 29.03.2014 is now restored to the file of the First Appellate Authority, which shall dispose of such appeal on its own merits and in accordance with law as expeditiously as possible and in any case within two months from the date of production of an authenticated copy of this order. In this case interim relief was declined. Therefore if the Respondents have encashed the bank guarantees or the petitioner has paid the tax, the same shall abide by the orders that may be made by the First Appellate Authority - The parties to appear before the First Appellate Authority (other than Shri Ashok Rane) on 26.04.2021 at 11.00 a.m. and file the authenticated copy of this order. The First Appellate Authority to dispose of both the appeals i.e. appeals against assessment orders for 2008-09 and 2010-11 since common issues of law and fact are involved. Rule is made absolute in the aforesaid terms.

Summary

Issues Involved:
1. Doctrine of Bias
2. Retrospective Application of Tax Legislation
3. Vires of the Goa Entry Tax Act, 2000

Detailed Analysis:

1. Doctrine of Bias:
The petitioner argued that the Goa Administrative Tribunal's order dated 27.03.2020 should be interfered with due to the bias of Shri Ashok Rane, who, as the First Appellate Authority, decided the appeal for the Assessment Year 2010-11. The petitioner contended that the correct test is the "reasonable apprehension of bias" rather than actual bias. Shri Rane had previously made an adverse order against the petitioner for the Assessment Year 2008-09 and recused himself from hearing the related appeal. However, he did not recuse himself from the appeal for the Assessment Year 2010-11, despite the petitioner’s protest. The court found merit in the petitioner’s contention, noting that the facts and issues of law in both assessment years were virtually identical. The court emphasized that the question is whether the petitioner had a reasonable apprehension of bias, which was deemed reasonable in this case. The Tribunal's rejection of the bias contention was found to be a misapplication of the relevant legal principles, as highlighted in cases like Mohd. Chand v. State of U.P. and Narinder Singh Arora v. State (Govt. of NCT of Delhi).

2. Retrospective Application of Tax Legislation:
The petitioner submitted that before 20.05.2013, the goods on which entry tax was imposed were neither specified in the schedule nor was any rate of tax prescribed. The Goa Tax on Entry of Goods Act, 2000, was amended on 20.05.2013 to specify the goods and rates of tax, but this amendment would not apply to assessment years before 2013. The court did not find it necessary to delve into this issue due to the decision on the bias issue.

3. Vires of the Goa Entry Tax Act, 2000:
The petitioner challenged the vires of Section 3 of the Entry Tax Act, the machinery provisions in Chapter IV, and the penalty provisions in Section 19, arguing they were ultra vires Articles 265 and 300A of the Constitution. However, the court chose not to address this issue, stating it would only be appropriate to decide on the vires if necessary and not merely because the power to decide exists. The court’s decision on the bias issue rendered it unnecessary to explore the vires of the provisions.

Conclusion:
The court set aside the impugned orders dated 14.01.2019 by Shri Ashok Rane and 27.02.2020 by the Tribunal, restoring the petitioner’s appeal against the order dated 29.03.2014 to the file of the First Appellate Authority. The appeal is to be disposed of on its merits within two months. All contentions and defenses remain open for future consideration. The parties are to appear before the First Appellate Authority on 26.04.2021 to proceed with the appeals for both 2008-09 and 2010-11 assessment years. The rule was made absolute with no order as to costs, and interim relief matters were left to abide by future orders.