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TMI Blog1999 (9) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... r except ordering for payment of instalments . 2.. We would like to re-cast the question little differently- whether the High Court is empowered to grant stay of collection of disputed tax and penalty pending disposal of revision petition (T.R.C.) presented to it under section 22 of the A.P. General Sales Tax Act, 1957 (hereinafter referred to as the Act )? 3.. The answer to the above question in turn depends on the interpretation of sub-sections (6) and (6-A) of section 22 of the APGST Act, and the relative scope and ambit of these two provisions. Sub-section (1) of section 22 provides for revision to the High Court against the order of the Appellate Tribunal on a question of law. Sub-section (6) provides that notwithstanding that a petition has been preferred under sub-section (1), tax shall be paid in accordance with the assessment made in the case, provided that the High Court may in its discretion, permit the petitioner to pay the tax in such number of instalments, or give such other direction in regard to the payment of tax as it thinks fit . The second proviso to sub-section (6) though not very relevant may also be referred to have a complete picture. It reads: Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to payment of tax disputed in the revision. Again, having regard to the language of the proviso, it cannot be said that the only order that the High Court can make is to fix the instalments, as contended by the learned Government Pleader. That is one type of order that the High Court can make. But it can also make appropriate direction with respect to the payment of tax as it thinks fit. It may mean that it can direct a certain portion of the tax to be paid and stay collection of the balance pending the revision. It is true, the proviso does not contemplate an absolute stay. It contemplates that at least some portion of tax should be paid. At the same time, it would be incorrect to contend that the direction to be made by the High Court should necessarily ensure the payment of the entire disputed tax pending, i.e., before the disposal of the revision. We see no warrant for placing such a limited construction upon the words give such other direction in regard to payment of tax as it thinks fit occurring in the proviso. 5.. What exactly was the purpose of introduction of sub-section (6-A) and how these two provisions have to be reconciled has not been specifically indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rection as it may deem fit. It follows that in appropriate cases, it has power to grant stay of recovery of tax due by the petitioner. It appears to us that the power of the High Court under the first proviso to sub-section (6), discussed above, is neither taken away nor controlled by sub-section (6-A) as it does not begin with a non obstante clause to keep out the power under the proviso. From a harmonious construction of both these provisions, sub-sections (6) and (6-A), having regard to the legislative intent, we conclude that where the stay of collection of tax is sought in a revision filed under section 22(1) of the Act, the High Court in its discretion may permit the petitioner to pay the tax in such instalments as it may think just and proper; it may in its discretion give such other direction in regard to the payment of tax as it thinks fit including the direction not to collect tax pending disposal of the revision; but the High Court will exercise this power very sparingly in special circumstances to prevent grave miscarriage of justice. 7.. We must also notice the order of another division Bench in C.M.P. No. 17575 of 1992 in T.R.C. No. 78 of 1992 dated November 3, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending disposal of appeal. However, under sub-section (6), the Joint Commissioner is empowered to grant stay of collection of tax in dispute pending disposal of appeal by the Tribunal subject to such terms and conditions as he may think fit. This provision is somewhat akin to section 220(6) of the Income-tax Act which vests discretion in the Incometax Officer to defer collection of tax pending the first appeal. Against the order of the Sales Tax Appellate Tribunal, revision is provided to the High Court on a question of law. The High Court has power to dismiss the revision petition summarily. Grant of interim order pending revision is governed by sub-section (6) and sub-section (6-A) of section 22 which we have already noticed. It may be mentioned that appeal is provided by section 23 to the High Court directly against an order passed by the Commissioner of Commercial Taxes in exercise of revisional jurisdiction. No bar is created against grant of stay by the High Court pending such appeal. 10.. As a prelude to the discussion of the core question, we may recapitulate certain well-settled principles relevant to the remedy of appeal/revision and the passing of interim orders pendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act enable the appellate authorities to dispense with the pre-deposit on considerations of undue hardship, etc. In this context, the following pertinent observations made in Anant Mills Co. Ltd. v. State of Gujarat AIR 1975 SC 1234, by Khanna, J., deserve notice: The right of appeal is the creature of a statute. Without a statutory provision creating such a right, the person aggrieved is not entitled to file an appeal. We fail to understand as to why the Legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is permissible, for example, to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in section 30 of the Indian Income-tax Act, 1922. The proviso to that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made illusory on account of imposition of condition requiring pre-deposit of tax, in view of the interpretation placed on section 170(b) of the Delhi Municipal Corporation Act. Their Lordships upheld the vires of section 170(b) of the said Act by reading down the provision so as to create a bar against the final hearing and disposal on merits, but not to the entertainment of the appeal itself. While holding that the District Judge had no jurisdiction to waive the condition of deposit or stay the collection of tax pending disposal of appeal, the Supreme Court observed that District Judge had the power to adjourn the hearing of the appeal or pass interim orders enabling the assessee to pay the tax before the appeal is actually heard and determined. Thus, even a provision which insisted on the pre-deposit of tax for hearing the appeal on merits by a judicial authority was upheld by the Supreme Court. In the instant case, though we are not concerned with the question of vires of the section, we have referred to this decision only to emphasise that the power to stay the collection of tax need not always be a concomitant attribute of the appellate or revisional jurisdiction. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeps. When the expression is capable of diverse meanings-one wider and the other narrower, the question is which meaning has to be preferred. It is in this area, the principle of contextual interpretation and the rule of noscitur a sociis is applied. 18.. Going by the tenor of sub-section (6) together with the proviso and the collocation of crucial words employed in the proviso, it can be contended with much force, as has been contended by the learned Government Pleader, that the directions to be issued by the High Court should not be such as to suspend the recovery of any part of the tax payable under the assessment made. The court should stop short of issuing a stay order-either blanket or conditional. For instance, directions may be given for adjustment of the refund due for any other year towards the disputed tax, or directions may be given to furnish security while granting instalments or perhaps, the court may direct in an appropriate case the deposit of disputed tax in a bank or with the court. 19.. Another argument which can be said in favour of narrower construction of the words other direction is that if the Legislature had intended to preserve the power of stay to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date on which the refund is granted. Thus, a provision for payment of interest at least for a limited period has been provided, unlike the second proviso to sub-section (6) which denies interest to the assessee altogether. 22.. The scheme spelt out of these two provisions can be summarised as follows: (1) There should be no stay of payment of disputed tax and penalty pending disposal of revision petition preferred under section 22(1). (2) However, the High Court can grant instalments for payment of tax which in the context should include penalty also. The High Court is also empowered to grant such other appropriate directions in regard to payment of tax so long as such directions do not have the effect of staying the recovery of tax during the pendency of revision. (3) If on account of allowing revision petition, fully or partly, any refund of amount becomes due, it will bear interest at the rate of 12 per cent per annum during the interregnum between the two dates specified in section 33-F. 23. We may at the risk of repetition add that with the introduction of a specific provision prohibiting the grant of stay pending revision, there is no scope to invoke the theory of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stay has also made a provision for payment of interest-may be in a truncated manner to minimise the loss caused to the assessee. If there is no adequate provision for payment of interest, logically, that should be a ground to plead that the entire tax should necessarily be stayed by the High Court as otherwise, there is no possibility of getting refund with full interest. But, the petitioners have refrained from advancing such extreme contention, realising the fallacy in such argument. 27.. Let us now understand the provisions of sub-sections (6) and (6-A), especially the ambit and meaning to be assigned to the expression give such other direction in regard to the payment of tax as it thinks fit in the light of well-known principles of interpretation. The contextual and harmonious reading, purposive interpretation, legislative purpose, mischief sought to be remedied, the principle expressed in the maxim- Utres magis valeat quam pereat -all these interpretative guides enter into our mental process in answering this crucial question. The phrase other direction is a phrase of indefinite import. It is fairly and equally open to diverse meanings-wide as well as narrow meaning. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations of public policy and denude it of its efficacy. The presence or absence of non obstante clause in sub-section (6-A) is immaterial. The Legislature perhaps thought it unnecessary. We should read both provisions together in an anxiety to see that the legislative intent is preserved and one of the provisions does not become otiose or ineffective. We cannot judge the power of the High Court on a priori notion that the High Court as apex Court of the State should always retain its power to grant stay. 29.. Whatever may be the justification for giving wider meaning to the words such other direction occurring in the proviso to sub-section (6) till subsection (6-A) was introduced, with the enactment of sub-section (6-A), there can no longer be such justification. The phrase such other direction as already noted, is capable of yielding diverse meanings. If we continue to include within its fold the power to order stay, it would be crossing swords with sub-section (6-A). If we then allow primacy to the proviso to sub-section (6) in preference to subsection (6-A), we will be making sub-section (6-A) a worthless provision. The legislative injunction in sub-section (6-A) would m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund under section 33-F of the Act even after the appeal in the Tribunal goes against the Revenue and therefore, the assessee too should be provided with a remedy to seek stay. We do not think that the interpretation of the crucial provisions, viz., sub-sections (6) and (6-A) of section 22 is controlled by section 33-C which is a power given to the assessing authority to withhold the refund subject to specified conditions and in specified circumstances. It is not necessary that in a taxing statute, parity must be maintained in all respects between an assessee and the department. The powers confided to the tax authorities in larger public interest on the one hand and the rights and remedies available to the assessees on the other, need not be weighed in golden scales. Moreover, if there is any arbitrary order of withdrawal of refund, the assessee is not left without any remedy to question the same by filing a writ petition or otherwise. So also, the contention of one of the learned counsel that in an appeal under section 23 directed against the order of the Commissioner, the High Court is invested with the power to grant stay whereas such a power is denied in a revision against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actice to be followed by this Court invariably. 34.. Our attention has been drawn to the decision of the Karnataka High Court in Swathi Traders v. Commercial Tax Officer [1990] 76 STC 393. It was a case in which even at the stage of appeal to the Tribunal, the power to grant stay was taken away by the impugned amendment. The Karnataka High Court held that the said amendment had no application to the appeals filed before the date of amendment. There is no such situation obtaining here. As far as the obiter dicta herein that the impugned amendment cannot take away the right vested in and conferred on the Appellate Tribunal by virtue of its very constitution as an appellate authority and therefore liable to be struck down are too broadly made and run counter to the decision of the Supreme Court in Shyam Kishore s case (1992) 5 JT 335. In any case, the ratio of that decision has no application to the present case as the power to grant stay pending appeal to the Tribunal is retained. 35.. For the reasons aforesaid we take the view that pending a revision under section 22(1) of the APGST Act the High Court has no power to grant stay of recovery of tax or penalty. But, the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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