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TMI Blog1996 (6) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... rules 21, 22 and 22A of the Central Sales Tax (Rajasthan) Rules, 1957. He contended that the provisions of the West Bengal Taxation Tribunal Act (West Bengal Act No. 8 of 1987) are similar to the provisions of the Tribunal Act so far as the present controversy is concerned and the West Bengal Taxation Tribunal has taken the view that it has no jurisdiction to entertain and decide cases arising under the CST Act in its following decisions: 1.. Overseas Packaging Industries (P.) Ltd. v. West Bengal Commercial Taxes Tribunal [1990] 78 STC 267. 2.. M.L. Shroff Co. v. Commissioner of Commercial Taxes [1991] 80 STC 65. 3.. Edible Products (India) Private Ltd. v. Commercial Tax Officer [1991] 83 STC 317. 4.. Balmer Lawrie Co. Ltd. v. C.T.O. [1992] 84 STC 171. 5.. Alembic Chemical Works Company Limited v. State of West Bengal [1994] 92 STC 129. He also contended that a Division Bench of the Calcutta High Court in Commissioner of Commercial Taxes v. Hindustan Petroleum Corporation Ltd. [1991] 82 STC 157, has held that the West Bengal Taxation Tribunal has such a jurisdiction and a learned single Bench of the Calcutta High Court in Himalaya Rubber Products Limited v. Board f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate, and Shri Vineet Kothari to assist the Tribunal in this matter from both points of views. 7.. Shri Rajendra Mehta contended that the Tribunal is a statutory body established under the Tribunal Act enacted under article 323B of the Constitution, its jurisdiction is confined to the twelve Acts specified in the Schedule to the Tribunal Act, the CST Act is not included in the Schedule and as such it has no jurisdiction to entertain and decide cases arising under the CST Act. He also contended that there is no provision in the RST Act regarding extraordinary jurisdiction and the expression "extraordinary jurisdiction" is not mentioned in section 9(2) of the CST Act. He further contended that the provisions of the Tribunal Act are in pari materia with the provisions of the West Bengal Taxation Tribunal Act, 1987 so far as the present controversy is concerned. He placed reliance upon the decisions of the West Bengal Taxation Tribunal, referred to in para 2 supra. He also relied upon State of Kerala v. P.P. Joseph and Co. and Joseph Elias [1970] 25 STC 483 (SC), Commissioner of Sales Tax v. Barium Chemicals Ltd. [1981] 48 STC 121 (Bom), Sitaram Sree Gopal v. Certificate Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly." It has been observed in State of Kerala v. P.P. Joseph and Co. and Joseph Elias [1970] 25 STC 483 (SC) at page 488; SCST Vol. 3, page 2711 at page 2715, as follows: "..........By section 9(2) of the Central Sales Tax Act as modified it is enacted that the authorities empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the State shall be entitled, on behalf of the Government of India, to assess, reassess, collect and enforce payment of tax by a dealer under the Act as if the tax payable by such a dealer under the Act was tax payable under the general sales tax law of the State, and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State. Thereby the procedural law prescribed by the general sales tax law of the State applies in the matter of assessment, reassessment, collection and enforcement of payment of tax under the Central Sales Tax Act, but the liability to pay is determined by the provisions of the Central Sales Tax Act." 11.. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 984 SC 1130 page 1144, para 39, as follows: "39. From the text and the decisions, four tests are deducible and these are: (i) The Legislature has the undoubted right to alter a law already promulgated through subsequent legislation, (ii) A special law may be altered, abrogated or repealed by a later general law by an express provision, (iii) A later general law will override a prior special law if the two are so repugnant to each other that they cannot co-exist even though no express provision in that behalf is found in the general law, and (iv) It is only in the absence of a provision to the contrary and of a clear inconsistency that a special law will remain wholly unaffected by a later general law. See in this connection, Maxwell on 'The Interpretation of Statutes', Twelfth Edition, pages 196-198." It shall, therefore, be deemed that the expression "High Court" appearing in section 86 of the RST Act stands substituted by the expression "Rajasthan Taxation Tribunal" on coming into force of the Tribunal Act. Undoubtedly, the Tribunal has jurisdiction to entertain and decide applications for revision filed under the RST Act. When the Tribunal has jurisdiction to entertain and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax Officer [1981] 48 STC 466 (SC): "It is the duty of the court while interpretating the machinery provisions of a taxing statute to give effect to the manifest purpose having a full view of it". 16.. It has been held in Harish Chand Bajpai v. Trilok Singh AIR 1957 SC 444, that the word "matter" is of very wide import. According to Stroud's Judicial Dictionary, a thing is said to be "incidental to" another when it appertains to the principal thing. The words "connected therewith " are also of much wide import. By virtue of the provisions of section 9(2), CST Act, the exercise of revisional jurisdiction under section 8, Tribunal Act, by the Tribunal in cases arising out of the CST Act can well be said to be connected with or incidental to the RST Act. In view of the provisions of section 9(2), the connection of RST Act with CST Act cannot be said to be remote, far-fetched or imaginary but it is real, direct and substantial. 17.. The second point for consideration is whether the provisions of section 8 of the Tribunal Act can be invoked in cases under the CST Act. It was rightly not argued that any provision of the Tribunal Act is in conflict with the provisions of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the machinery of and the rate of tax prevalent in the State is for the convenience of assessment as well as for the convenience of the parties so that they will not have to deal with two sets of officers and two sets of laws in addition to avoiding discrimination between intra-State and inter-State sales." 18.. As regards the decisions of the West Bengal Taxation Tribunal, referred to in para 2 supra, it may be observed with respect as follows: I. In Alembic Chemical Works Company Limited v. State of West Bengal [1994] 92 STC 129 (WBTT), it has simply been observed at page 132, para 2E: "The prayer with regard to registration under the Central Sales Tax Act, 1956 is beyond our jurisdiction, since it is not a specified State Act mentioned in the Schedule to the West Bengal Taxation Tribunal Act, 1987." At page 134, para 7H: It may be stated again that the question of validity of the said order with regard to the registration certificate dated February 15, 1985, under the Central Sales Tax Act, 1956, is not a subject-matter of this decision, since this Tribunal exercises no jurisdiction in matters directly arising out of the said Act of 1956." At page 145, para 24G: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Constitution. The Tribunal cannot be treated as one in the chain of hierarchy contemplated by the Bengal Finance (Sales Tax) Act, 1941. It derives its jurisdiction under the West Bengal Taxation Tribunal Act and the jurisdiction is limited to the Acts enumerated in the Schedule to the Act. The Schedule does not include the Central Sales Tax Act, 1956. Clause (3)(b) of article 323B requires the law made under clause (1) to specify the jurisdiction, powers and authority which may be exercised by the Tribunal. The law so made does not empower the Tribunal to exercise jurisdiction over the Central Sales Tax Act. It cannot also be treated as a functionary exercising jurisdiction under the Bengal Finance (Sales Tax) Act, 1941. The extent of jurisdiction of the Tribunal is prescribed in the Act itself which does not include the Central Sales Tax Act, 1956." In this case the provisions of section 7(2), West Bengal Taxation Tribunal Act, 1987, as amended by West Bengal Taxation Tribunal (Amendment) Act, 1988, were not considered. Section 7(2) of the West Bengal Taxation Tribunal Act runs as under: "Notwithstanding anything contained elsewhere in this Act or in any specified St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of the fact, that this is a reference under section 21 of the Bengal Finance (Sales Tax) Act, 1941, this Court has no jurisdiction to decide this reference which could be only decided by the Tribunal so constituted. As there was confusion in this matter, the matter cannot be sent earlier and as such this reference shall be transferred to the West Bengal Taxation Tribunal for disposal in view of the fact that this is a reference under the Bengal Finance (Sales Tax) Act, and in view of the reasoning given in this order. For details vide judgment.' 8.. It is neither desirable nor proper to express any view one way or the other regarding the ratio of the said judgment without having an opportunity to go through the judgment with reasons. It appears that the Division Bench of the High Court held that the said Matter No. 224 of 1977 (which is completely separate from the present application) being a reference under section 21 of the 1941 Act should be transferred to this Tribunal for disposal. Therefore, on the basis of what appears from the aforesaid minutes in the said Matter No. 224 of 1977, that case seems to be clearly distinguishable on facts from the present application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us with regard to matters arising under the Central Sales Tax Act, 1956, Act No. 74 of 1956 (hereinafter called, "the CST Act"), I have thought it proper to write a separate judgment. The facts of the cases discussed in the paragraphs that follow are not identical, but since the question which has cropped up for our discussion and decision is the same they are disposed of by a common judgment. 22.. An attempt is made to answer the question whether or not this Tribunal is vested with the authority, powers and/or jurisdiction to deal with and pronounce upon the matters arising under the CST Act in view of the provisions contained in section 86 of the Rajasthan Sales Tax Act, 1994, Act No. 22 of 1994 (hereinafter called "the RST Act") and the Rajasthan Taxation Tribunal Act, 1995, Act No. 19 of 1995 (hereinafter called "the RTT Act"). In order to appreciate and sharp-focus the issues involved it is necessary to set out the facts of a few representative cases in the paragraphs that follow: PART I FACTUAL MATRIX 23. Case No. 2 of 1995: The applicant-company has filed this application praying for the exercise by this Tribunal of its extraordinary jurisdiction under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax under the CST Act was leviable at 12 per cent together with the surcharge thereon. Resultantly, the case was sent back vide his order of March 28, 1992 to the non-applicant on remand for disposal in the light of observations made by the appellate authority. The applicant-company filed a second appeal before the Rajasthan Sales Tax Tribunal, Ajmer (later rechristened as Rajasthan Tax Board) under the RST Act. The Board on September 30, 1995 upheld the contention of the applicant-company that the amount of surcharge could not be forfeited under section 16(1)(j) of the RST Act, but it held that the applicant-company was liable for prosecution under section 9A read with section 10(f) of the CST Act. It directed the non-applicant to carry out the direction with regard to launching of the prosecution against the applicant-company within a period of three months. 25.. Case No. 31 of 1995: In the return which the non-applicant-company filed before the applicant, Commercial Taxes Officer, Circle B, Alwar, for the assessment year 1989-90 it was found by the applicant that the non-applicant-company had not paid tax on free samples of the value of Rs. 15,000 which it gave to its deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a second appeal before the Board, which on August 26, 1985 dismissed it. It is against this order that the applicant-company filed the application in revision before the Rajasthan High Court. 27.. Case No. 4 of 1995: The applicant-company which is engaged in the manufacture of cement in its factory at Modak, District Kota, as mentioned earlier, filed this application in revision before the Rajasthan High Court under section 86 of the RST Act read with section 9(2) of the CST Act. It was transferred onto the file of this Tribunal. In the return filed by the applicant-company before the Commercial Taxes Officer, Special Circle I, Kota, under section 9 of the CST Act it claimed "partial exemption" with regard to the inter-State sale of non-levy cement in terms of the Notification No. F.4(72) FD/Gr. IV/81-18, dated May 6, 1986, as amended from time to time. The claim of the applicant-company was accepted by the then assessing authority on October 23, 1990. The successor-assessing authority on August 21, 1992, issued to the applicant-company a notice under section 17 of the old RST Act for rectification of the assessment order on the ground that the foregoing notification was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his contention that the Parliament in exercise of its legislative power has enacted the CST Act to provide for the levy of tax leviable on the sale or purchase of goods in the course of inter-State trade or commerce and adopted the mechanism necessary for assessment, reassessment, collection and enforcement of tax including penalty, as laid down under the general sales tax law of the State. It is the State authorities which have been authorised to carry out the purport and intendment of the CST Act. In order to appreciate his argument and its niceties and nuances it is appropriate here to give a brief sketch of the relevant constitutional provisions with a view to considering them in their appropriate historical perspective. Section 100(3) of the Government of India Act, 1935, read with entry 48 of List II of the Seventh Schedule to that Act gave power to the Provincial Legislatures to make laws with respect to "tax on sale of goods and on advertisement". With the coming into force of the Constitution of India this entry 48 had its incarnation in entry 54 of List II of the Seventh Schedule. Thus the power to levy tax on the sale or purchase of goods other than newspapers was assign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have effect unless it has been reserved for the consideration of the President and has received his assent." 30.. The true effect of this article 286 on inter-State sale or purchase of goods was considered by the apex Court in State of Bombay v. United Motors (India) Ltd. [1953] 4 STC 133 (SC); [1953] SCR 1069. In that case the apex Court held that article 286(1)(a) of the Constitution read with the Explanation thereto and construed in the light of article 301 and article 304 of the Constitution prohibited the taxation of sales or purchases involving inter-State elements by all States except the State in which the goods were delivered for the purpose of consumption therein. In other words, it was held that in the case of inter-State sales, the importing State vis-a-vis the title State was competent to levy tax on transactions of sale under its sales tax law on persons who were resident outside its territory provided the goods were delivered in the importing State for the purpose of consumption therein. The result of this decision was that a dealer carrying on business in the exporting State became amenable to the sales tax law of the importing State in which the goods were cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections of sales tax on inter-State sales by the States up to September 6, 1955, were validated and proceedings in respect of the levy of tax on inter-State sales for assessment were also protected. Later on in the light of the report of the Taxation Enquiry Commission, the Constitution itself was amended by the Constitution (Sixth Amendment) Act, 1956, by introducing entry 92A in the Union List, substituting a new entry 54 in the State List for the existing entry and by amending article 269 and article 286. Entry 92A in the Union List reads: "92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce." Entry 54 in the State List now reads: "54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I." 32.. The taxes levied on the inter-State sales and purchases by the Central Government under a law made pursuant to the new entry 92A came to be assigned to the States in the manner provided in clause (2) of article 269 by the inclusion of sub-clause (g) in clause (1) of article 269, and under the new clause, i.e., clause (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in inter-State trade or commerce and specify the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods of special importance shall be subject. The expression "dealer" is defined in section 2(b) of the Act and the expression "sale" is defined in section 2(g) thereof. Section 3 of the Act lays down the principles with reference to which the question whether a sale or purchase of goods has taken place in the course of inter-State trade or commerce or not can be determined. Section 4 of the Act provides for determining when a sale or purchase of goods is deemed to take place outside a State and section 5 of the Act lays down the principle governing the determination of the question whether a sale or purchase has taken place in the course of export or import. Section 6 of the Act is the charging section. 35.. Section 6A of the CST Act deals with the burden of proof in the proceedings under the Act. Section 7 of the Act provides for registration of dealers. Section 8 specifies the rates of tax on sales in the course of inter-State trade or commerce and section 8A lays down the rules relating to determination of turnover. Section 9 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of tax from third parties, appeals, reviews, revisions, references, refunds, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub-section. (3) The proceeds in any financial year of any tax, including any penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributable to Union Territories shall form part of the Consolidated Fund of India." 36.. It is to be seen from sub-section (2) of section 9 quoted above that the authorities empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State are authorised to assess, reassess, collect and enforce payment of tax including any penalty payable by a dealer under the CST Act. The authorities under the general sales tax law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arashtra [1975] 35 STC 571 (SC); [1975] 3 SCR 753, which was a case heard by a Bench of five Judges of the apex Court, an assessee under the CST Act who was a resident of the State of Maharashtra contended that the levy of penalty under section 16(4) of the Bombay Sales Tax Act for delay or default in payment of tax due under the CST Act was not warranted by the provisions of section 9(2) of the Act. There were three opinions expressed in that case. A.N. Ray, C.J., with whom Khanna, J., agreed, held that a penalty not being merely a sanction on an adjunct or consequential to an assessment and also not being just a matter of procedure to enforce payment of a tax but in reality being a statutory liability, in the absence of any express provision for levy of penalty for delay or default in payment of the tax under the CST Act, it was not open to the authorities under the State law to levy and recover it for delay or default in payment of tax under the CST Act. The result was that the penalty levied against the appellant was held to be unsustainable in accordance with the opinion of the majority. Consequently section 9 came to be amended by the amending Act which was published in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral sales tax levied on inter-State sales is assigned under article 269 of the Constitution to the States who are the true beneficiaries. The assessees under the Act who are spread over various States are accustomed to the general pattern of sales tax law in their respective States and the various duties and responsibilities of an assessee who is liable to pay sales tax. The officers who assess and collect the tax under the Act are the officers who discharge similar functions under the State laws. In this situation if Parliament has, with the knowledge of the various provisions relating to offences and penalties in the general sales tax laws of the various States, adopted them for purposes of assessment, reassessment, collection and enforcement of the provisions of the Act it cannot be said that it has abdicated its legislative functions. 38.. To complete this story it seems appropriate to make a brief reference to the Constitution (Forty-sixth Amendment) Act, 1982, which was put on the statute book to deal with a situation arising from the decision of the apex Court in State of Madras v. Gannon Dunkerley Co. (Madras) Ltd. [1958] 9 STC 353; AIR 1958 SC 560 wherein the apex Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative powers under article 246(1) of the Constitution. It is common place to say that the Parliament has exclusive legislative power to make law with regard to matters enumerated in Union List. It has also the legislative power to make law with regard to matters enumerated in the concurrent List. In certain contingencies specified in articles 249 to 252 it has legislative power to make laws even with regard to matters which fall within the exclusive legislative powers of the State. The Constitution which is republic in character and federal in structure does not conceive of or envisage a situation where the State Legislature can make law with regard to a matter which can be dealt with by the Parliament in exercise of its legislative powers. Here I turn to article 258(2) which strikes me as the most important for our purposes. It is as hereunder: "(2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ism to deal with the matters arising from the CST Act, but the power of the such authorities shall be hedged round with the specific provisions, if any, made in the CST Act and the Rules made thereunder. In other words, if no specific provision different from the one made in the general sales tax law of the State is there in the CST Act then all the matters falling within the scope of the CST Act shall be dealt with by the said authorities. Shri J.N. Sharma contends before us that in many a respect the provisions of the CST Act are different from those of the RST Act. For example, section 9A of the CST Act provides that unregistered dealer shall not collect any tax under the Act in respect of any sale by him of goods in the course of inter-State trade or commerce. It further provides that the registered dealer shall not make any such collection except in accordance with this Act and the Rules made thereunder. In case of infringement of the provisions of this section 9A no penalty can be imposed under section 16(1)(j) of the RST Act. To cite another example, section 7(3H) of the CST Act provides a period of limitation which shall not exceed 30 days from the date of service of order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and enforcement of payment of tax. The word "enforcement" must have a wide sweep and as such cover every step necessary for the enforcement of payment of tax. Considering in that light appeal, review, revision and reference or any one of them is nothing but a part of this process of enforcement of payment of tax. These remedies are not part of substantive law but of procedural law. Enforcement of the payment of tax cannot be decoupled from such remedial measures as mentioned above. In the fourth place, the word "including" makes the scope of section 9(2) very expansive. It covers not only those measures specifically mentioned in the body of section 9(2) of the CST Act but also other measures implicit in it, but not so specifically mentioned therein. No Legislature can be expected for foresee all the contingencies that would arise in the future. To expect a Legislature to make a perfect law is to ask for the moon. While enacting section 9(2) the Parliament made it as comprehensive in its reach as it possibly could. Lastly, the proceeds of sales tax levied in the course of inter-State trade or commerce shall be levied and collected under the CST Act but they shall be assigned to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence in respect of matters connected with the Central Sales Tax Act, made under section 21 of the Bengal Finance (Sales Tax) Act, should be treated to be a reference under the Bengal Finance (Sales Tax) Act." The High Court also observed that in case a view different from the one it has taken is accepted then it will give rise to many a practical difficulty. It held at page 161 of the Report thus: "...............There is another practical difficulty in this matter that at the time of making assessment under the Bengal Finance (Sales Tax) Act, the Commercial Tax Officer determined the gross turnover after deducting the turnover which was found to be covered under the Central Sales Tax Act and this determination is made in an assessment under the State Act. If the High Court has no power to decide any issues relating to assessments and proceedings under the Bengal Finance (Sales Tax) Act, in that event, the court cannot decide and/or adjudicate any issues for the Central Sales Tax Act independently under the Bengal Finance (Sales Tax) Act. This has created a difficulty for which this question could not be adjudicated except by the authorities under the Bengal Act." In the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have weighed with the honourable Judicial Member was that the words "as if" were not meant to convert the tax levied under the CST Act into the tax under the State law. He observed in para 4 at page 173 thus: "These words (as if) do not have the effect of declaring that a tax leviable under the 1956 Act will be a tax for all purposes under the State sales tax law. If the legislative intention was otherwise, then the words 'as if' would have not been used at all and it would be enough to lay down that the tax under the 1956 Act would be a tax under the State sales tax law ". What he meant was that the words "as if" were used by the Parliament to prove, if any proof was required at all, that the tax leviable under the CST Act was not tax under the State law. It is with respect that I do not find myself in agreement with the honourable Judicial Member on this score. The words "as if" have been used in a context different from the one in which he seems to have understood them. The Parliament has made it clear that the State authorities shall have the authority to assess, reassess, collect and enforce the payment of tax including penalty under the CST Act in the same way as they do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with matters relating to Central sales tax the procedure applicable under the 1941 Act including references must be followed". With regard to the decision of the WBTT in Overseas Packaging Industries (P) Ltd. case [1990] 78 STC 267 she expressed the view that it was in conflict with the decision of the Calcutta High Court in Hindustan Petroleum Corporation Ltd. case [1991] 82 STC 157. In paragraph 3 at page 50 of the Report her Lordship observed thus: "It is not necessary for me to resolve this dispute. The issue decided by this Court in the unreported decision (Commissioner of Commercial Taxes v. Hindustan Petroleum Corporation Ltd.) (since reported in [1991] 82 STC 157) referred to above does not arise for determination here". It is clear from this quote that her Lordship did not resolve the conflict between the two decisions referred to in her judgment and left the issue open. A reference can be made to the decisions in Alembic Chemical Works Company Limited v. State of West Bengal [1994] 92 STC 129 (WBTT), Edible Products (India) Private Limited v. Commercial Tax Officer [1991] 83 STC 317 (WBTT) and M.L. Shroff Co. v. Commissioner of Commercial Taxes [1991] 80 STC 65 (WBT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other provisions of this Act, shall, with effect from such date as may be appointed by the State Government by notification in this behalf, exercise jurisdiction, powers and authority in relation to all matters of adjudication or trial of any disputes, complaints or offences with respect to levy, assessment, collection and enforcement of any tax under any specified State Act and of matters connected therewith or incidental thereto; and no court except the Supreme Court of India shall, with effect from such date, exercise any jurisdiction, powers or authority in the matter of adjudication or trial of any disputes, complaints or offences with respect to the aforesaid matters. 6.. Jurisdiction, powers and authority of the Tribunal.-(1) Save as otherwise expressly provided in this Act, the Tribunal shall exercise, with effect from such date as may be specified by the State Government by notification in this behalf, all the jurisdiction, powers and authority exercisable immediately before that day by all courts including the High Court but excluding the Supreme Court of India for adjudication or trial of disputes or complaints or offences with respect to all matters of levy, assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Board. In the face of such a specific provision this Tribunal cannot exercise jurisdiction over the matters arising under the CST Act. He further contends that the matters arising under the specified Acts shall continue to be revised under the RTT Act for the simple reason that the State Legislature has enacted the RTT Act. Shorn of thin veneer of disguise this contention is without life in it. In the first place, the RST Act was enacted in 1994 and came into force with effect from October 1, 1995. As against this the RTT Act was enacted in 1995 and came into force with effect from September 16, 1995. Thus when the RST Act came into existence the RTT Act was not there. Section 7(2) of the RTT Act contains a non obstante clause and provides that wherever a reference is made to the High Court in any specified State Act it shall be deemed to be a reference to this Tribunal. Sub-section (2) of section 7 needs to be reproduced as hereunder: "7. Reference jurisdiction.-(1).......... (2) Notwithstanding anything contained elsewhere in this Act or in any specified State Act, reference to the High Court in any specified State Act shall, with effect from the date specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s power that the Parliament has authorised under section 9(2) of the CST Act the State authorities to exercise powers with regard to the matters dealt with therein. This authority, power and jurisdiction conferred upon the State authorities by the Parliament itself is not hedged round with conditions not contemplated by the CST Act itself. The provisions of section 9(2) and (2A) did not come in for an in-depth discussion before the WBTT. The view I have taken gets support from the decision in Tek Chand Daulat Rai v. Excise and Taxation Officer, Ferozepore [1972] 29 STC 585 (P H) [FB] referred to by the WBTT itself in its judgment wherein it was observed at page 603 as under: "Thus, by virtue of sub-section (2) of section 9 of the Central Act, the functionaries under a State law have been utilised for administering the law as provided in the Central Act. The procedural provisions for assessment of tax and imposition of penalties under the Central Act to be followed will be the same as given in the State law and the same course of remedies by way of appeals, revisions, references, reviews, etc., will be available to parties aggrieved of the orders passed in relation to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bafna, has contended before us that this Tribunal can exercise extraordinary jurisdiction with regard to matters arising from the CST Act. This contention has been hotly contested by Shri Rajendra Mehta who contends that even conceding but not admitting for the sake of arguments that this Tribunal has the jurisdiction to decide applications in revision brought to it under section 7 of the RTT Act with regard to matters arising from the CST Act, it does not have the jurisdiction to exercise its extraordinary jurisdiction with regard to these matters. Even Shri R.B. Mathur has lent his support to Shri Rajendra Mehta. Thus here Shri Bafna and Shri Mathur otherwise on one side, clash with each other with regard to the point concerning the exercise by this Tribunal of its extraordinary jurisdiction. Section 8 of the RTT Act provides for the exercise by this Tribunal of its extraordinary jurisdiction in circumstances mentioned therein. Such a jurisdiction can be exercised at the instance of a person aggrieved by an order passed or action taken with regard to any matter within the jurisdiction of the Tribunal. The Tribunal shall not entertain the application in exercise of its extraordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1987 SC 386, the Constitution Bench has held that the Act is a law made by Parliament under clause (1) of article 323A to exclude the jurisdiction of the High Courts under articles 226 and 227 of the Constitution. Section 28 of the Act which bars the jurisdiction of all courts except the Supreme Court is relatable to clause (2)(d) of article 323A for adjudication of service matters including questions involving the validity or otherwise of such laws on the ground that they abridge the fundamental rights under articles 14 and 16(1) of the Constitution, and that the Administrative Tribunal set up under section 4 of the Act is a substitute of, and not supplemental to, the High Court providing an equally efficacious alternative remedy for adjudication of such disputes. It has further held that the establishment of the Administrative Tribunal under the Act therefore takes away the jurisdiction and power of the High Court to interfere in such matters but it is not violative of the doctrine of judicial review which is a fundamental aspect of the basic structure of our Constitution because section 28 of the Act which bars the jurisdiction of the High Court under articles 226 and 227 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey do and until they are reversed or modified by the apex Court the legal position boils down to this that the Administrative Tribunals constituted under the Central Act of 1985 have the jurisdiction to decide the constitutional validity of laws and rules made thereunder with regard to service matters. What is true of the Tribunals constituted under the Central Act of 1985 holds good in the case of Tribunal constituted under the RTT Act. The field is effectively lighted up by the provisions of clause (4) of article 323B which provides that the provisions of this article shall have effect notwithstanding anything in other provisions of this Constitution or another law for the time being in force. Thus this clause (4) contains a non obstante clause which will have an overriding effect with regard to any provision of law which comes into clash with it so long as it does not fall foul of the fundamental rights contained in Part III of the Constitution. All that is required is that the Tribunal must provide an equally effective, adequate and efficacious remedy or mechanism for the redressal of the grievances, and if the answer to this question is in the affirmative the jurisdiction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scientific symbols. To treat them as such would be to stamp on their face unchangeability which will render them incapable of proper application to the matters arising before this Tribunal. Lastly, a Legislature is not expected to foresee all types of cases which may arise before the courts. Edgar Bodenheimer in Jurisprudence, The Philosophy and Method of the Law, First Indian Reprint 1996, Universal Book Traders, writes at page 424 as hereunder: "A reasonable law-maker is aware of the deficiencies inherent in the products of his legislative efforts. He knows that statutory rules can almost never be phrased with such perfection that all cases falling within the legislative policy are included in the textual formulation while all situations not within the purview of the statute remain outside of its linguistic ambit. Furthermore, a legislative body composed of reasonable men cannot be presumed to insist on retaining an exclusive right to correct minor errors and inadequacies. If such an exclusive right were claimed and granted, the Legislature would forever be busy amending its own laws, often in small particulars, which is impractical, since other and more immediate political dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso of being deprived of the power to levy tax in such cases. This Bengal Immunity Co. case [1955] 6 STC 446 (SC); [1955] 2 SCR 603 caused a flutter in the financial dovecotes throughout the country. In order to restore the balance and stablize the situation the Parliament came out with the CST Act. This was the position before the CST Act was brought into force. The second circumstance is as to what was the mischief or defect for which the law then in existence did not provide. This circumstance is allied to the first circumstance I have already dealt with. The third circumstance is concerned with the remedy the Parliament had decided upon to cure the mischief or the defect or the disease. The Parliament came out with the enactment of the Constitutional (Sixth Amendment) Act, 1956, and the CST Act. The law concerning the imposition of sales tax by the States was rationalised, institutionalised and constitutionalised. The fourth circumstance makes it obligatory for the Judges to put on a statute such a construction as will suppress the mischief and advance the remedy. Subtle inventions and evasions are to be frowned upon. Real point cannot be allowed to be shrouded in mystery. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the Parliament not only to stabilize the situation which arose from a decision of the apex Court in Bengal Immunity Company case [1955] 6 STC 446 (SC); [1955] 2 SCR 603 but also to put the sales tax law in the States on an even keel. Since the tax leviable under the CST Act was to be assigned to the States, it was thought proper, and rightly so, to entrust the State authorities under article 258(2) with the authority, power and jurisdiction to take all measures necessary for the assessment, reassessment, collection and enforcement of the payment of tax including penalty under the CST Act and to adopt the procedure which these authorities take with regard to the assessment, reassessment, collection, enforcement of payment of tax including penalty leviable under the general sales tax law of the State. The only exception was made in regard to the matters which were specifically dealt with by the CST Act in a manner different from the one in which the matters falling under the general sales tax law of the State were dealt with. Such a situation arose in the case of imposition by the State authorities under the State law of the penalty not leviable under the CST Act. It was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration before the WBTT in the case of Alembic Chemical Works Co. Ltd. case [1994] 92 STC 129. The WBTT refused to deal with it on the ground that this question cannot be dealt with by it for the simple reason that it arose from the CST Act. Of particular significance is the fact that the certificate of registration granted to the dealer under the CST Act was quashed by the Commercial Taxes Officer, Siliguri. The point I am driving at is that the matter concerning registration is to be dealt with by the State authorities. In these circumstances I see no reason why it could not be dealt with by this Tribunal. 62.. As regards the Sales Tax Incentive Scheme for Industries, 1987, the legal position is that this scheme has been devised to grant exemption from the payment of sales tax to the industrial units who manufacture goods within the State itself. This exemption from the payment of sales tax leviable under the general sales tax law of the State is given by the State under section 4(2) of the old RST Act. It is again the State Government which is empowered to grant exemptions from the payment of tax leviable under the CST Act. This exemption is granted under section 8(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I ring down the curtain on this matter I put on record my appreciation of the help which Shri Rajendra Mehta provided to us as amicus curiae in resolving the riddle we were confronted with in this case. 64.. To conclude, I hold that this Tribunal has the jurisdiction under sections 7 and 8 of the RTT Act to hear, entertain, decide and pronounce upon the matters arising from the CST Act, except those matters, if any, which may fall within the category of substantive law. R.K. NAIR (Technical Member).-I have had the benefit of going through the separate but concurring judgments of my two learned and esteemed colleagues and with respect I find myself unable to agree with them. 66.. In my opinion this Tribunal has no jurisdiction to entertain, hear or decide any matter arising out of the CST Act. In the paragraphs that follow I hope to be able to spell out the reasons why I hold this opinion. 67.. Prior to the coming into force of the RTT Act the controversy did not exist. 68.. The short point, stated in stark terms, is whether with the coming into force of the RTT Act the jurisdiction of the Rajasthan High Court was ousted in matters arising under the CST Act? For it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 323B of the Constitution and read with clause (4) of the same article of the Constitution can be said to oust the jurisdiction, powers and authority of the Rajasthan High Court under article 226 of the Constitution in relation to the adjudication or trial of disputes, complaints or offences with respect to levy, collection, assessment and enforcement of a tax under the 1954 RST Act and the 1994 RST Act, being specified State Acts within the meaning assigned to the term by, and for the purposes of, the RTT Act. 76.. The same would not hold true with respect to Central sales tax (CST) and for matters arising under the CST Act. The jurisdiction, powers and authority of the Rajasthan High Court, inter alia, under article 226 of the Constitution would continue undisturbed, unabridged and unaffected in any manner as heretobefore. It would otherwise be unconstitutional. 77.. With respect to the specified State Acts like the 1954 RST Act and the 1994 RST Act the jurisdiction, powers and authority of the Rajasthan High Court having been ousted by sections 5, 6 and 14 of the RTT Act, this Tribunal has been vested with a degree of extraordinary jurisdiction by virtue of section 8 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities empowered, on behalf of the Government of India to assess, reassess, collect and enforce payment of tax, including penalty, payable by a dealer under the CST Act as if it were under the 1954 RST Act or the 1994 RST Act. These authorities, of which this Tribunal is not one, have been permitted to exercise all or any of the powers they have under the 1954 RST Act or the 1994 RST Act and the provisions of these Acts, including provisions relating, inter alia, to appeals, revisions, references shall apply accordingly. The use of the word "including" indicates that the list is not exhaustive, but that cannot be stretched to include the extraordinary jurisdiction of this Tribunal under section 8 of the RTT Act. Only the provisions of the 1954 RST Act and the 1994 RST Act would apply. In my view it is very clear that the extraordinary jurisdiction of this Tribunal under section 8 of the RTT Act cannot be said to be attracted in matters relating to CST under section 9(2) of the CST Act. 82. As far as revisions are concerned the relevant provision is section 86 of the 1994 RST Act (which corresponds to section 15 of the 1954 RST Act) read with section 9(2) of the CST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RST Acts provide for "revisions". It may not be the tidiest or neatest or the most convenient of solutions. It has, however, the merit of not being illegal, unconstitutional, anomalous or absurd. 87.. At the heart of the controversy lie issues of grave constitutional import bearing on the extent of ouster of the High Court's powers under article 323B of the Constitution and the powers of the State Legislature vis-a-vis an item in the Union List. These considerations too would warrant a cautious strict construction to be put on the provisions of the RTT Act. 88. The above analysis finds support from a ruling of the Calcutta High Court in Kesoram Industries Ltd. (Textile Division) v. Coal India Ltd. AIR 1993 Cal 78. The question of the ouster of the jurisdiction of the High Court under the West Bengal Taxation Tribunal Act, 1987 ("the WBTT Act" for short) on which the RTT Act, is closely modelled and of which it is virtually a verbatim copy came up before it. The primary question before a Division Bench of the Calcutta High Court was of the validity of the cesses imposed by various State Acts for various purposes relatable to the dispatches of coal in view of the judgments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2). The Tribunal would have power to adjudicate a taxation dispute if the State Legislature which makes the law providing for such trial by the Tribunal is competent to levy the tax or legislate in respect of that tax having regard to the provision of Part XI of the Constitution. If it is not so competent then obviously it cannot make any law to provide for the adjudication of such taxation dispute by Tribunals......." (Emphasis* added). 90.. The Calcutta High Court went on to consider the effect of section 6 of the WBTT Act by which, from a notified date, the jurisdiction of all courts, including the High Court but excluding the Supreme Court for adjudication of disputes with respect to matter of levy, etc., of tax under any specified, State Act shall be replaced by the jurisdiction of the Tribunal. The effect of section 14 Here italicised. of the Tribunal Act which reiterated the same in a negative way and specifically stated that the High Court or any civil court except the Supreme Court shall not have any jurisdiction in relation to the adjudication of disputes with respect to levy, etc., of tax under any specified State Act was also considered. As the specified State Acts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no bearing upon the case in hand. As already mentioned, in my view this is the sole judgment of any High Court that I know of on Taxation Tribunals constituted by State Legislatures under article 323B of the Constitution which examines the extent of ouster of the High Court's jurisdiction and to me, it would appear to hold the field against the decision of the Calcutta High Court in Commissioner of Commercial Taxes v. Hindustan Petroleum Corporation Ltd. [1991] 82 STC 157 in which while holding that it had no jurisdiction to entertain references under the CST Act their Lordships did not consider article 323B of the Constitution and its implications. 93.. As for Sampath Kumar's case AIR 1987 SC 386, all that it established was that under article 323A the power of judicial review vested in High Courts could be ousted and vested in a Tribunal, i.e., the Forty-second Constitution Amendment Act was good law. I concede that the same could be said of article 323B. There are, however, major differences between article 323B and article 323A and these too have been discussed by the Calcutta High Court in Kesoram's case AIR 1993 Cal 78 in para 14 at page 84 of the report. Article 323A pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only of the conferring of powers and the imposition of duties and authorising the conferring of powers and the imposition of duties upon the State or officers and authorities thereof. This article does not authorise the ousting of the writ jurisdiction or of judicial review of the High Court. That can be done only under article 323A or 323B of the Constitution. In this view of the matter too the invoking of the extraordinary jurisdiction of this Tribunal under section 8 of the RTT Act cannot be said to be provided for in section 9(2) of the CST Act. In my view this would continue to be the position till such time as Parliament by law made under article 323B, ousts the jurisdiction of the High Court in CST matters and vests it in its stead in Taxation Tribunals. The point need not, I feel be, belaboured any more. 97.. As for a subsequent special law, i.e., the RTT Act having overriding effect vis-a-vis an earlier general law, i.e., the 1954 RST Act there is no doubt that it does. The question is to what extent and for what purposes? The special law cannot in the process overreach itself. That is to say, the RTT Act and this Tribunal have necessarily to be confined to a tax under a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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