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TMI Blog1989 (3) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... 30th January, 1989, as the passing of such order was beyond our jurisdiction, and alternatively ; (b) We should cancel the aforesaid order as it was passed without considering the merits ; and (c) Even if the aforesaid submissions were for any reason not found acceptable by us, we should de novo, consider his submissions on merits, and cancel our order, or, in any event modify it so that the stay should be allowed to operate only if the assessee pays at least 25 per cent of the aggregate demand outstanding in this case of Rs. 67,81,000. 3. Where our jurisdiction is under challenge it is necessary for us to hear the contentions and examine the issue dispassionately divorced of any preconceived notions. We proceed to do so. 4. On the issue of lack of jurisdiction the point urged by the learned departmental representative was that the jurisdiction of the Appellate Tribunal to grant stay of recovery of tax stood by necessary implication abrogated, in that Rule 86 of the Second Schedule to the Income-tax Act provided for a separate appeal procedure against any action taken by the Tax Recovery Officer. According to the learned departmental representative the Second Schedule to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hu [Misc. Petition No. 36 of 1987 dated 29-4-1988] and submitted that where the assessment itself was under dispute before the Tribunal, the Tribunal had a co-extensive jurisdiction to grant stay of the disputed demand as also any particular proceeding initiated for the recovery of such disputed tax. 6. We have carefully considered the rival submissions. We would first take up the contention of the learned departmental representative that the ratio of the judgments of the Supreme Court in the case of M.K. Mohammed Kunhi and that in the later case of Bansi Dhar Sons have no application as far as the present petition was concerned. 7. In the case of M.K. Mohammed Kunhi the Supreme Court observed at page 817 : "Section 221 provides for the imposition of penalty when the assessee is in default. Sections 222 to 224 relate to the issuance of a certificate to the Tax Recovery Officer. Under section 225 the Income-tax Officer can order stay of proceedings, even after the certificate has been issued to the Tax Recovery Officer. It may be mentioned that the last four sections in terms relate to recovery of tax, but by virtue of section 229 any penalty imposed is also recoverable in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut to all the cases where a just application of them may be made, and which appear to be comprehended either within the consequences that may be gathered from it.' Maxwell on Interpretation of Statutes, eleventh edition, contains a statement at page 350 that 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. Cui jurisdictio data est, ea quoque concessa esse videntur, sine quibus jurisdictio explicari non potuit.' An instance is given based on Ex parte Martin [1879] 4 Q.B.D. 212, on appeal [1879] 4 Q.B.D. 491 (C.A.) that 'where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced'." 8. It is clear from the aforesaid observations that the Supreme Court had specifically adverted to the entire gamut of recovery procedure under the Act, which it is needless to say includes all action by the Tax Recovery Officer in enforcing recovery and it is only thereafter the Supreme Court concluded (page 822) : "In our opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal to grant a stay or not to grant a stay ............ The realisation or non-realisation of tax is part of the appellate jurisdiction of the Tribunal ....................... Hence, the court, in seisin of a reference under the Income-tax Act, could not issue an order of temporary injunction, according to the Calcutta High Court, or stay of proceedings which was an injunction in an indirect manner in respect of recovery of taxes. In an appropriate case, if the assessee feels that a stay of recovery pending disposal of the reference is necessary or is in the interest of justice, then the assessee is entitled to apply before the appellate authority to grant a stay until disposal of reference by the High Court or until such time as the appellate authority thought it fit." 10. The Supreme Court then concluded referring to the concept of ex debito justitiae : "That concept might arise in the case of the appellate authority exercising its power to grant stay where there is no express provision. Ex debito justitiae is to do justice between the parties. Rendering advice on the question of law referred to the courts has nothing to do with the recovery of taxes or granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the IT Act. The primary purpose of the statute is to levy and collect the income-tax. This is based on the cardinal principle, which has been incorporated as a veritable constitutional provision, that no tax can be levied or collected save under authority of law. The task of an appellate authority under the taxing statute, especially a non-departmental authority like the Tribunal, is to address its mind to the factual and legal basis of an assessment for the purpose of properly adjusting the taxpayer's liability to make it accord with the legal provisions governing his assessment." The Court later quoted from the Full Bench decision in State of Tamil Nadu v. Arulmurugan Co. [1982] 51 STC 381 (Mad.) : "In a tax appeal, the appellate authority is very much committed to the assessment process. The appellate authority can itself enter the arena of assessment, either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative, without being prodded by any of the parties. It can enhance the assessment, taking advantage of the opportunity afforded by the taxpayer's appeal, even though the appeal itself has been mooted only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Commissioner in that case acting as a revisional authority (i.e. In the exercise of Appellate Jurisdiction) could have been moved for stay though the TRO had commenced proceedings for recovery. This decision also, in our view, therefore, does not advance the case of the Revenue. Balkisandas's case only states that an order made any Tax Recovery Officer under sec. 2(44)(iii), i.e., a Tax Recovery Officer authorised by the Central Government or the State Government, has to be considered as an order made by the Collector though that officer may not be the Collector. There is nothing in the judgment which would suggest the ouster of jurisdiction of the Tribunal to pass an order in the nature of an injunction from proceeding with any specific mode of recovery during the pendency of the appeal before the Tribunal. Dandi Mohamad Hussain's case dealt with the authority to be approached for cancelling an attachment. The ratio of this decision, in our view, can have no applicability where what is under consideration is jurisdiction to grant stay of any proceedings and not adjudication and determination of any claim in the course of execution of any decree. 14. On a careful consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, by stating that the learned Departmental Representative had submitted that the assessee was recalcitrant, we have conveyed all that he has reiterated at present. The Supreme Court in the case of M.K. Mohammed Kunhi had stated as under : "The Tribunal's powers in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code : see CIT v. Hazarimal Nagji Co. [1962] 46 ITR 1168 and New India Assurance Co. Ltd. v. CIT/CEPT [1957] 31 ITR 844. In Polini v. Gray [1879] 12 Ch. D. 438 this is what Jessel M.R. said about the powers of the Court of Appeal to grant stay at page 443 : "It appears to me on principle that the court ought to possess that jurisdiction, because the principle which underlines all orders for the preservation of property pending litigation is this, that the successful party in the litigation, that is, the ultimately successful party, is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the court of first instance before the first trial, and to the Court of Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, what is in issue is the decision in quantum appeals and also relating to imposition of penalty. We have stated as far back as 1st March, 1988 (order sheet entry which forms Annexure to order in the Stay Petition) : "Both the parties have agreed before us that for hearing the quantum appeal, it is necessary to have the books of account. These books are understood to be in Court. The Department will have to move the Court for obtaining the said accounts. The learned Departmental Representative will take necessary action to obtain the books of account and immediately on receipt of the same will inform the Assistant Registrar so that the appeal will be posted for hearing by the Tribunal as expeditiously as possible. " Referring to this and subsequent postings of the case, we had stated in our stay order of the 30th January, 1989 as under : "From the orders passed by us on 1-3-1988 it is clear that for hearing the appeals it is necessary to peruse the books of account. The books of account are not with the assessee. It is stated that they have been, after seizure by the Revenue, filed before the Courts. We emphasise, what we have been repeatedly stating when the cases were pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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