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TMI Blog2000 (9) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... section 39 of the Act, should not have annoyed the court while granting the relief in exercise of its powers under article 226 of the Constitution. The impugned order being contrary to settled principles of law cannot be sustained and is accordingly set aside. - Civil Appeal No. 4938 of 2000 - - - Dated:- 7-9-2000 - THOMAS K.T. AND SETHI R.P. JJ. K.T.S. Tulsi, Senior Advocate, S.C. Sharma and Mahabir Singh, Advocates, for the appellant. R.F. Nariman, Senior Advocate, P.S. Sudhir, Pratap Venugopal and K.J. John, Advocates, for the respondents. -------------------------------------------------- The judgment of the Court was delivered by R.P. SETHI, J.- Leave granted. 2.. What is the ambit and scope of the words "unable to pay the whole of the amount of tax assessed" used in proviso to sub-section (5) of section 39 of the Haryana General Sales Tax Act, 1973, is the question of law requiring our interpretation in this appeal by special leave. It is contended on behalf of the appellant that the inability mentioned in the proviso refers to the financial position of the assessee, whereas the respondents contend that the word "unable" used in the section is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company to furnish bank guarantee for the additional demand for entertainment of appeal, instead of depositing the whole amount in terms of sub- section (5) of section 39 of the Act. The appeal filed by the company was disposed of by the Tribunal by remanding the case to the Deputy Excise and Taxation Commissioner for fresh decision after giving the company a reasonable opportunity of being heard. The Deputy Excise and Taxation Commissioner vide its order dated March 29, 1994, again revised the orders and created additional demand of Rs. 23,10,995 under the Act and Rs. 78,44,607 under the Central Act. 5.. Feeling aggrieved, the company again filed an appeal before the Tribunal along with application for stay of recovery of demand and entertainment of appeal without prior demand of tax and interest. Such application was rejected on September 7, 1994, giving the company time to deposit the entire demand by November 30, 1994. The company again filed Writ Petition No. 16537 of 1994 in the High Court against the order of the Tribunal rejecting its application. On December 5, 1994, the High Court quashed the order of the Tribunal and directed it to pass a speaking order after he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in computing the period of sixty days." There cannot be any dispute that right of appeal is the creature of the statute and has to be exercised within the limits and according to the procedure provided by law. It is filed for invoking the powers of a superior court to redress the error of court below, if any. No right of appeal can be conferred except by express words. An appeal, for its maintainability, must have a clear authority of law. Sub-section (5) of section 39 of the Act vests a discretion in the appellate authority to entertain the appeal if it is filed within sixty days and the amount of tax assessed along with penalty and interest, if any, recoverable from the persons has been paid. The aforesaid restriction is subject to the proviso conferring discretion upon the appellate authority to dispense with the deposit of the amount only on proof of the fact that the appellant was unable to pay the amount. Before deciding the appeal, the appellate authority affords an opportunity to the party concerned to either pay the amount or make out a case for the stay in terms of proviso to sub-section (5) of section 39 of the Act. Once the conditions specified under sub- section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as is now suggested by counsel for the State. It has used the word 'entertain' and it must be accepted that it has used it advisedly. This word has come in for examination in some of the cases of the Allahabad High Court and we shall now refer to them. .............. In our opinion, these cases have taken a correct view of the word 'entertain' which according to dictionary also means 'admit to consideration'. It would therefore appear that the direction to the court in the proviso to section 9 is that the court shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of the payment of the admitted tax. This will be when the case is taken up by the court for the first time. In the decision on which the Assistant Commissioner relied, the learned Chief Justice (Desai, C.J.) holds that the words 'accompanied by' showed that something tangible had to accompany the memorandum of appeal. If the memorandum of appeal had to be accompanied by satisfactory proof, it had to be in the shape of something tangible, because no intangible thing can accompany a document like the memorandum of appeal. In our opinion, making 'an appeal' the equivalent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 948 and the Haryana General Sales Tax Act, 1973 it could safely be held that there is a complete bar to the entertainment of an appeal by the appellate authority without the payment of tax amount unless the Authority is satisfied that the dealer is unable to pay the amount so assessed and only in that situation the appellate authority for the reasons to be recorded in writing can entertain the appeal without deposit of the payment of such amount. (e) Neither on the wording nor in view of the spirit of the Punjab and Haryana Acts it is possible to hold that the appellate authority should see the prima facie nature of the case while hearing the stay matter. (f) The factum of tax assessed being illegal cannot be a relevant consideration for grant of stay by an appellate authority. (g) The High Court in exercise of its jurisdiction under article 226 of the Constitution of India in rarest of the rare cases in the given facts and circumstances, can grant stay and waive the condition of pre-deposit of tax and the existing alternative remedy in such circumstances would be no ground to refuse interference." 10. We find substance in the submission of Mr. K.T.S. Tulsi, Senior Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned to or referred to its inability to pay the amount on account of its alleged financial difficulties or incapacity to make the requisite payment. The legality of the additional demand created could not be made the basis for insisting to entertain the appeal without prior payment, as that would have required the determination on the merits of the appeal. Relying upon the Full Bench judgment of the jurisdictional court in Emerald International Ltd.'s case [2001] 122 STC 382; STI (1997) P H 113 the Tribunal was competent in passing the order (annexure P8) which was impugned in the High Court. The division Bench of the High Court was not justified in ignoring the Full Bench judgment and the judgment of another Bench of co-ordinate jurisdiction while allowing the writ petition of the company. The division Bench even failed to mention the circumstances which justified the passing of the order for allowing the writ petition with direction to the Tribunal for disposal of the appeal on furnishing of the bank guarantee by the company. Merely because the Tribunal had insisted upon the payment of the amount in terms of proviso to sub-section (5) of section 39 of the Act, should not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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