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TMI Blog1966 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for revision of an order of assessment made under section 11 of the Act or of any order of appellate authority finally disposing of an appeal under section 20 of the Act shall be entertained by the Commissioner unless he is satisfied that the amount of tax assessed has been paid: Provided that the Commissioner if he is satisfied that a dealer is unable to pay the tax assessed may, for reasons to be recorded in writing, entertain such an application without the tax having been paid." Whereas the requirement of prior deposit of the amount in dispute is contained in section 20 of the Act which gives the right of appeal, no such provision is contained in section 21 of the Act under which a revision petition can be filed. Mr. Bhagirath Dass, the learned counsel for the petitioner, contends that rule 61-A quoted above is ultra vires section 20 and that in exercise of its rule-making powers under section 27(2)(p) of the Act the State Government could not impose a fetter on the right of the petitioner to approach the revisional authority without making any deposit. For this proposition the learned counsel for the petitioner has relied on the judgment of this Court in Messrs. Dhill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner is a registered dealer under the Punjab General Sales Tax Act (46 of 1948), hereinafter called the Act. In respect of his annual turnover for the year 1959-60 a demand of Rs. 16,000 was created against the petitioner including a penalty of Rs. 7,720.43, by the order of the Assessing Authority dated 31st March, 1964 (annexure E). Similarly in respect of 1960-61 a demand of Rs. 15,000 was created against the petitioner by the Assessing Authority by his order dated 6th April, 1964 (annexure F) which demand included a penalty of Rs. 5,549.23. The petitioner preferred two separate appeals under section 20 of the Act against both the abovesaid orders of assessment. Along with the appeals he filed two separate applications under the second proviso to section 20 of the Act praying for his appeals being entertained without complying with the requirements of the first proviso about the payment of the amount of tax assessed against him. Petitioner's application for exemption in respect of the financial year 1959-60 was disposed of by the order of the appellate authority dated 2nd June, 1964 (annexure H), wherein it was held after taking all the relevant facts into consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance with the mandatory requirements of the first proviso to sub-section (1) of section 20 of the Act, the petitioner treated his orders dated 7th August, 1964, as those of dismissal of his appeals. The petitioner has specifically stated in para. 12 of his writ petition that his two appeals had been dismissed by the said orders dated 7th August, 1964. The petitioner then submitted two separate revision petitions dated 30th October, 1964, under section 21 of the Act wherein a prayer was made to set aside the original orders of assessment made on 31st March, 1964, as also the appellate orders. Along with the petitions for revision, applications were filed by the petitioner under rule 61-A of the Punjab General Sales Tax Rules, 1949 (hereinafter referred to as the Sales Tax Rules), for exempting the petitioner from depositing the amount of the tax assessed as a condition precedent to the entertainment of the revision petitions. Copy of one such application dated 9th November, 1964, is annexure "O" attached to the writ petition. As the financial condition of the assessee at the time of the filing of the revision petition is relevant for purposes of grant of exemption from the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orn on the 27th of December (the year is not given) wherein it is stated that the order of the revisional authority is quite justified and is in accordance with law and that the allegation of rule 61-A being ultra vires the Act is denied on the analogy of the judgment of this Court in Mansa Roadways, etc. v. The State of PunjabCivil Writ No. 1028 of 1963. The other averments in the writ petition and the written statement are not relevant for deciding this case. In the writ petition three prayers were originally made, viz.: (i) that the orders of the Assessing Authority (annexure E and F) dated 31st March, 1964, and 6th April, 1964, respectively creating the impugned demands may be quashed; (ii) that the orders of respondent No. 2, the appellate authority, dated 7th August, 1964, dismissing the appeals of the petitioner may be set aside; and (iii) that the orders of respondent No. 3, the revising authority, dated 28th November, 1964 (annexure R) refusing to entertain the revision petitions of the petitioner may be annulled and quashed. At the hearing of the writ petition before us Shri Bhagirath Dass fairly and frankly stated that now he was neither impugning in any manner the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain an appeal without the tax or penalty or both having been paid. (2) Subject to such rules of procedure as may be prescribed, the said authority may pass such orders in relation thereto as he may think fit." Section 21. "(1) The Commissioner may, of his own motion or on application made to him, call for the record of any proceedings which are pending before, or have been disposed of by, any assessing or appellate authority appointed under this Act, for the purpose of satisfying himself as to the legality or propriety of such proceedings or of any order made therein and may pass such orders in relation thereto as he may think fit: Provided that the application shall be made within a period of 180 days of the date of the taking of the proceedings or of passing of the order, as the case may be. (2) The State Government may, by notification, confer upon any officer the powers of the Commissioner under sub-section (1), to be exercised subject to such conditions, and in respect of such areas as may be specified in the notification. (2-a) The Commissioner or the officer on whom powers of the Commissioner under sub-section (1) have been conferred by the State Government may, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y set out. (2) It shall be accompanied by a certified copy of the order appealed against. (3) It shall be endorsed by the appellant or his agent as follows: (a) whether or not the tax assessed and penalty (if any) has been paid, and in case it has not been paid the reason for nonpayment. (b) that to the best of his knowledge and belief the facts set out in the memorandum are true. (4) It shall be signed by the appellant, or his agent and shall be accompanied by the fee prescribed in rule 67." Rule 60. "The appeal may be summarily rejected, if the appellant fails to comply with any of the requirements of rule 59." Rule 61-A. "No application for revision of an order of assessment made under section 11 of the Act or of any order of appellate authority finally disposing of an appeal under section 20 of the Act shall be entertained by the Commissioner unless he is satisfied that the amount of tax assessed has been paid: Provided that the Commissioner if he is satisfied that a dealer is unable to pay the tax assessed, may, for reasons to be recorded in writing entertain such an application without the tax having been paid." Rule 62. "The provisions of rules 58, 59 and 60 shall ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , howsoever startling, has been intended by the Legislature according to Mr. Bhagirath Dass. On analysis of rules 61 and 62 of the Sales Tax Rules it appears that there can be various kinds of revision petitions under the Act and the requirement of depositing the amount of the tax assessed does not apply to all the revisions petitions. I may, therefore, set out at this stage the nature and scope of the various petitions which can be filed under section 21 of the Act and show against each item whether the condition precedent of depositing the tax assessed, save in certain exceptional cases, applies to each category or not. Whether necessary to S. No. Kind of revision petition. deposit the tax assessed under rule 61-A or not. 1. A petition for revision against an order of Necessary. assessment of tax under section 11. 2. A petition for revision of an order passed Not necessary. by the Assessing Authority other than under section 11 of the Act. 3. A petition against an order of the appellate Not necessary authority under the second proviso to sub-section (1) of section 20 of the Act declining to exempt an appellant from the requirement of making the deposit under the first proviso t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the transport company. The company then took up the matter in revision to the Commissioner which petition for revision was dismissed on the solitary ground that the amount of the assessed tax had not been paid by the petitioner. It was the order of the revising authority which was impugned before this Court under Article 226 of the Constitution. Section 15 of Punjab Act 16 of 1952 corresponds to section 20 of the Sales Tax Act. It contains both the provisions of the nature contained in section 20 of the Act. Section 16 of the 1952 Act provides for the revisional powers of the Commissioner without the existence in that section of any such proviso as is contained in section 15 of that Act. Section 22(1) of the 1952 Act and clause (g) of sub-section (2) of that section read as follows: "22. (1) The State Government may make rules, consistent with this Act, for securing the payment of tax and generally for the purposes of carrying into effect the provisions of this Act. (2) In particular and without prejudice to the generality of the foregoing power, the State Government may make rules: (a) to (f)............................................................... (g) prescribing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act." I think the ratio of the above judgment is contained in the following sentence which occurs in the above-quoted passage: "Though the condition of payment of tax is justified in the case of appeals, being provided in the Act itself, it cannot be read to be an essential corollary in the hearing of a revision petition." Mr. Bhagirath Das has unnecessarily tried to read into the judgment of the learned Single Judge a finding to the effect that rule 28 was bad because it was beyond the rule-making power conferred on the State Government by section 22(2)(g) of the 1952 Act. No such thing has either been held by the learned Judge nor could possibly be held because of the provisions of sub-section (2) of section 22 of the 1952 Act being without prejudice to the generality of the powers conferred by sub-section (1) of that section. Sub-section (1) of section 22 of the 1952 Act authorises the State Government to make rules consistent with the Act, inter alia, generally for the purposes of carrying into effect the provisions of that Act. The counsel then referred to an unreported judgment of a learned Single Judge of this Court (Bishan Narain, J.) dated 10th February, 1958, in The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., on 28th February, 1944, the Central Government issued a notification under sections 6, 12 and 37 of that Act which was in the following terms: "In exercise of the powers conferred by sections 6, 12 and 37 of the Central Excise and Salt Act, 1944, the Central Government is pleased to apply in the adapted form set out below certain provisions of the Sea Customs Act, 1878, and to make the following rules for the purpose of providing for the assessment and collection of the duties imposed by the first mentioned Act." The rules framed by the Central Government which are referred to in the above-said notification of 28th February, 1944, were called the Central Excise Rules, 1944. These included rule 215 as subsequently amended which provided as under: "215. Application of certain provisions of Sea Customs Act, 1878.The provisions of sections 168, 189 and 192 of the Sea Customs Act, 1878, shall mutatis mutandis be applicable to any decision or order relating to any duty, fine or penalty leviable in respect of any goods under the Act or under these rules. " The Adarsh Textile Mills preferred an appeal under section 35 of 1944 Act to the Collector of Central Excise against an order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench (A.N. Bhandari, C.J., and D. Falshaw, J.) on 3rd September, 1959, in L.P.A. No. 70 of 1958. The Appellate Bench made a note of the fact that it was unfortunate that the provisions of section 12 of the 1944 Act had not been brought to the notice of the learned Single Judge either by the petitioner or by the respondent. The argument of Mr. Bhagirath Dass is that there is no such provision as that contained in section 12 of the 1944 Act in the Punjab General Sales Tax Act and that, therefore, shorn of the distinctive feature contained in section 12 of the 1944 Act the judgment of the learned Single Judge in the case of the Adarsh Textile Mills(1) still holds good. Once the judgment of the learned Single Judge has been reversed and set aside by the Appellate Bench, it does not appear to be correct for the learned counsel for the petitioner to urge that the said judgment holds good for any other finding contained therein which it did not probably become necessary for the Letters Patent Bench to consider. With the greatest respect to the learned Single Judge I am not able to see my way to hold on a construction of section 27 of the Act that the impugned rules 61-A and 62 are bey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cised either suo motu or on the revising authority being moved by an application within a period of 180 days of the date on which the order sought to be revised was passed. The operation of the impugned rules may lead to a queer situation. The Commissioner may call for the record of any proceedings on his own motion to satisfy himself as to the legality and propriety of some order which looks to the Commissioner to be absolutely wrong. After the record is received the aggrieved party may happen to make an application to the Commissioner for setting aside the same order. But the party may not deposit the amount of the tax. The impugned rules will even in those circumstances compel the Commissioner to dismiss the revision petition because the amount of tax is not paid. I think, the rule of exclusion applies to these provisions and by excluding from section 21 the restriction in question contained in section 20, the Legislature has clearly expressed its intention not to fetter the powers of the revising authority by any such restriction. In The Queen v. Bird and Others[1898] 2 Q.B. 340 at 346. , it was held as below: "I desire to deal only with the general question whether these rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow the revision petition to be heard on merits when the petitioner had failed to take advantage of the partial exemption granted to him in the matter of the requirement of making the requisite deposit at the appellate stage. This is precisely what appears to have been done by the Commissioner in this case though the language in which he has said so is not as succinct and clear in this behalf as it could be. As I read the impugned order of the Commissioner (annexure R) he has declined to interfere in exercise of his revisional powers under section 21 of the Act on two grounds. The first ground is that even according to the latest report of the District Excise and Taxation Officer it appeared that the petitioner was in a financial position to deposit the requisite amount as ordered on the earlier occasion. The second ground was that it appeared to the Commissioner that the firm had since been dissolved which showed to the Commissioner that the petitioner was purposely avoiding the payment of the tax and had even manipulated to get his property transferred in the name of some other persons to avoid the payment. The Commissioner further added that the petitioner had failed to carry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omulgated under the general and wide powers conferred by section 22(1) of that Act and that any omission in sub-section (2) of that section of a particular head under which rule 29 could be brought would not render that rule void. I have already accepted the only contention which could be based on the ratio of the judgment of the Division Bench of this Court in the case of M/s. Mansa Roadways Private Ltd.(1) In the instant case rules of the impugned type could be framed if there was no indication prohibiting the placing of such restrictions on the right of revision found by me in section 21 of the Act. In the case of M/s. Mansa Roadways Private Ltd.(1), it has not been held by this Court that the State Government can frame any rules even if they would be contrary to the scheme and intention of the Act or be repugnant to any provisions of the Act itself. Mr. Sharma then referred to the judgment of the Supreme Court in The State of Kerala v. K.M. Cheria Abdulla and Company[1965] 16 S.T.C. 875. By rule 14-A framed under the Madras General Sales Tax Act the revising authority was authorised to hold a further inquiry into the matter in question before deciding the revision petition. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revising authority to exercise his powers, and unless the power so conferred expressly or by clear implication nullifies or is inconsistent with any provision of the Act, it must be regarded as validly exercised. Conferment of power to make further enquiry in cases where after being satisfied about the illegality or impropriety of the order or irregularity in the proceeding, the revising authority thinks it just for rectifying the defect to do so does not amount to enlarging the jurisdiction conferred by section 12(2)." If anything, the ratio of the judgment of the Supreme Court appears to be in favour of the petitioner. Their Lordships of the Supreme Court have clearly stated in the above-mentioned passage that a rule would be valid unless it expressly or by clear implication nullifies or is inconsistent with any provision of the Act. I, however, find that the impugned rules substantially nullify the revisional powers conferred by section 21 of the Act and are inconsistent therewith. In the Supreme Court case the rule in question was made only as an aid to the exercise of jurisdiction conferred by the Madras Act. In the instant case the impugned rules are not an aid to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being ultra vires section 21 I am also strengthened by the relevant observations made by a Full Bench of this Court in its judgment dated 31st January, 1966, in M/s. United India Timber Works, Yamuna Nagar v. Employees State Insurance CorporationF.A.O. No. 74 of 1963. I do not think we are called upon to decide in this case the last contention of Mr. Bhagirath Dass to the effect that even if the impugned rules are valid the maximum amount which a revision-petitioner can be called upon to deposit is "the amount of tax assessed" and not the amount of penalty because of two reasons. Firstly, it is not disputed that in the instant case the reduced amounts which the petitioner was required to deposit were not beyond the amount of tax assessed and did not include the amount of penalties imposed by the Assessing Authority. The second reason why it is needless to go into this academic question is that it has already been held above that the impugned rules are repugnant to and, therefore, ultra vires section 21 of the Act and no revision-petitioner can be called upon to make any deposit simply because of the requirement of the impugned rules. Mr. Bhagirath Dass also referred to the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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