9911796707
TMI Blog1975 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... at prior sanction of the President was not taken. On 6 April, 1961 the New Act was passed by the Assam Legislature. The New Act was published in the Gazette on 15 April, 1961. The New Act Was to remain in force with retrospective effect from 24 April, 1954 up to 1 March, 1962. On 28 July, 1961 the New Act was challenged by about 485 assesses in the Assam High Court. The High Court passed an order staying all proceedings. The order staying proceedings continued till the New Act was held ultra vires the Constitution by the High Court. On 1 August, 1963, the High Court held the New Act to be ultra vires. On 1 August, 1963 the High Court granted certificate of fitness to appeal to this Court. On 13 December, 1963 on a writ application filed by M/s. Khyerban Tea Co. Ltd. this Court held the New Act to be valid. The decision of this Court is reported in (1964) 5 S.C.R. 975 Khyerbari Tea Co. Ltd. & Anr. v. The State of Assam. On 4 March, 1964 the State of Assam on the strength of the certificate granted by the High Court filed an appeal in this Court against the judgment of the High Court dated 1 August, 1963. On 28 October, 1964 this Court granted interim stay of the operation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation Act do not apply to legislation of the type of the New Act. Section 3 of the New Act is the charging section. Under that section tax is levied on (a) manufactured tea and (b) jute in bales carried by means mentioned therein. The period and the rate for taxes are specified in the Schedule. The tax levied on manufactured tea shall be realised from the producer. The tax levied on jute shall be realised from the dealer. Section 7 of the New Act speaks of return. There are four subsections of section 7. The first sub-section requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such form and to such authority as may be prescribed. The second sub-section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period or a part thereof, the Commissioner may serve within two years of. the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. The notices in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 9. The Rules under the New Act are framed under section 32 of the New Act. Rule No. 6 states that every dealer or producer shall furnish returns of the total gross weight of jute or tea carried to the Superintendent in Form 1. Rule No. 8 states that the notice referred to in sub-section (2) of section 7 may be issued to dealer or producer who have failed to submit returns within the period mentioned subsection (3) of section 7. The notices shall be in Form 11. Rule No. 9 states that every dealer or producer shall submit to the Superintendent every quarter a return so as to reach that officer on or before the dates therein. 30 April, 30 July, 30 October and 30 January are the dates on or before which the producer or dealer ,,ball submit return for the quarters preceding these dates, viz., quarters ending 31 March, 30 June, 30 September and 31 December respectively. Form No. 1 under Rule No. 6 mentions the name of the dealer, the return period and the details of net weight carried and amount of tax. Form No. II under section 7(2) and Rule No. 8 states that whereas the person notified carried manufactured tea or jute as the case may be, during the period ending on the date menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when this Court pronounced the New Act to be valid in the case of Khyerbari Tea Co. Ltd. (supra) the notices would be within the period of two years from 13 December, 1963. It was, emphasised by the Solicitor General that an act of Court granting stay of the proceedings should not be permitted to act adversely to the interest of the Sate against whom the injunction was granted. The second contention of the Solicitor General was that section 9(4) of the New Act confers power on the Commissioner to assess to the best of his judgment if a producer or dealer fails to furnish a return as required by section 7 or having made the return fails to comply with the terms of the notice issued under section (2) of the New Act. The notice under section 9(2) of the New Act refers to ,cases where if the Commissioner is not satisfied with the return furnished under section 7 he serves a notice on the assessee to produce ,evidence in support of the return. The Solicitor General leaned heavily on the words 14 if a producer or dealer fails to make a return as required by section 7 and contended that section 7(1) of the New Act required the producer or dealer to make a return and that section 7(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is well known that if it is brought to the notice of a court that proceedings are likely to be barred by time by reason of any order of injunction or stay the court passes such suitable or appropriate orders as will protect the interest of the parties and will not prejudice either party. Even when certificate to appeal to this Court was granted on 1 August, 1963, the State did not ask for any order for stay of operation of the judgment. That is quite often done. For the first time, on 10 August, 1964 the State filed an application for stay of operation of the judgment of the High Court. The State did not take steps at the appropriate time. This Court on 28 October, 1964 granted an interim order staying the operation of the High Court judgment. The interim order was made absolute on 28 January, 1965 with certain conditions. The State cannot take advantage of its own wrong and lack of diligence. The State cannot contend that it was impossible to issue any notice within the period mentioned in section 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file a return. Section 7 (2) of the New Act is a section conferring power and jurisdiction on the authorities to tax by calling upon the producer or dealer to file a return within the time mentioned therein. H a return under section 7(1) is not made, the service of a notice under section 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under section 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under section 9(4) of the New Act without service of a notice under section 7(2) of the New Act within two years in case where the assessee has not submitted any return under section 7(1) of the New Act. The words "if a producer or dealer fails to make a return as required by section 7" occurring in section 9 of the New Act make it clear that section 9 can come into operation only when there is a failure to comply with the requirements of section 7 and not the requirements only under any subsection (1). Reference may be made to section 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law, or, I suppose, the law of all civilised countries, than this, that where a man does an act which may be rightfully performed, he cannot say that act was intentionally and in fact done wrongly". The respondents were entitled to impeach the statute under which they were made liable. The respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the illigation to take directions from the Count to serve notices of demand upon the appellants to keep alive the right of the respondents. For these reasons, the contentions of the Solicitor General fail. The appeals are dismissed. Parties will pay and bear their own costs. MATHEW J. In these appeals, by special leave, the question for consideration is whether the High Court of Assam was right in quashing the notices issued to the respondents on the dates specified in each of the writ petitions filed by the respondents. The notices were issued-under the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961 (hereinafter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code of Civil Procedure in his written statement, but raised no issue on the point when issues were settled, and took no objection during the trial, the Court held that another defendant was not competent to raise this issue at a later stage as the Secretary of State had waived notice. A notice under section 80 of the Code of Civil Procedure is procedural with regard to institution of a suit. A notice under section 80 of the Code of Civil Procedure is not a part of the cause of action. In the notice under section 80 of the Code of Civil Procedure the cause of action has to be stated. In the case of Kammins Balrooms Co. (supra) the tenants made a request for a new tenancy. The landlords stated that they would oppose an application to the court for such new tenancy. When the tenants filed an application for grant of a new tenancy, the landlords filed an answer but took no objection to the application being premature. Thereafter the landlords wrote to the tenants that they would make a preliminary objection that the application was premature. The County Court Judge held that section 29(3) of the relevant Act which provided time for making the applications went to the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3(1) is the charging section and it says that subject to the provisions of the Act, there shall be levied a tax on (a) manufactured tea and (b) jute in bales carried by Motor vehicle, cart, trolley, boat, animal and human agency or any other means except railways and airways in such manner and in respect of such period and at such rate as specified in the schedule. Sub-sections (1) and (2) of s.7 read: " (1) Every producer and dealer shall furnish returns of manufactured tea carried in tea containers and of jute carried in bales in such form and to such authority as may be prescribed. (2) In the case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form upon him requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice." Section 9(4) provides: "If a producer or dealer fuils to make a return as required by s.7 or having made the return, fails to comply (1) See Khyerba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s.7(2) was issued within the two-year period, that would not in any way disable the officer concerned to make a best-judgment-assessment under s.9(4). He further submitted that by obtaining and enjoying the benefit of the orders of injunction, the respondents must be deemed to have waived their right to insist upon the notices within the period specified in s.7(2). He contended that after having successfully prevented the Commissioner from issuing the notices within the period by obtaining the orders of injunction, the respondents should not be heard to say that they were entitled to notices within the period specified in s.7(2) of the Act. On the other hand, it was argued on behalf of the respondents that issue of notice within the period specified in s.7(2) was a condition for the exercise of the jurisdiction to make the assessment and as no notices were issued within the period specified in s.7(2), the condition precedent for the liability to file returns was not fulfilled and there was, therefore, no liability for the respondents to file returns, or power in the authorities to make assessments. In other words, the argument for the respondents was that s. 7(1) by itself did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the' period by obtaining the orders of injunction. When the orders of injunction were passed by the Court restraining the appellants from taking any proceedings under the Act, could the Commissioner have issued the notices? Clearly not. If it was impossible for the Commissioner to issue the notices to the respondents within the period by virtue of the orders of injunction, could the law insist upon the issue of the notices within that period? Again, the answer must be 'no'. And, the Commissioner could not have issued the notices after the High Court, by its order, declared the Act to be invalid until the operation of that order was stayed by this Court. The law in its most positive and peremptory injunctions, is understood to disclaim, as it does in its general aphorisms, all intention of compelling performance of that which is impossible. "...where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of the respondents and did not subserve any principle of public policy. In Vellavan Chettiar v. Province of Madras (1) the question arose whether notice under the provision of s. 80 of the Civil Procedure Code was mandatory and could be waived by the party entitled to it. The Privy Council said that although the provision for issue of notice was mandatory, the party which was entitled to the benefit of notice could waive it. The language of s. 7(2) is, no doubt, mandatory, but the sub-section was not enacted on the basis of Any public policy. Its purpose is only to give a dealer notice of his duty to submit the return created by sub-section (1) of s. 7. Whenever a statute makes the performance of an act within a specified period mandatory and it is seen from the provisions of the statute that the performance of the act within the period is solely for the benefit of a party and no question of public policy is involved in its performance within period, it has been held that the party entitled to insist upon its performance within the period can waive it. As the issue of notice within the period specified in s. 7(2) is clearly for the benefit of the dealer and if he, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or his benefit, he cannot afterwards sign judgment for want of such affidavit....... Parke B. said "I concur in opinion with the Lord Chief Baron. The present affidavit is equivalent to no affidavit. The question then is, what is the meaning of the statute of Anne, which requires an affidavit of verification as a condition precedent to a valid plea in abatement ? If that enactment be intended for the sole benefit of plaintiffs, then the maxim applies 'Quilebet potest renunciare juri pro se introducto". It is evident that the requirements of that statute are solely for the benefit of plaintiffs, and in order to prevent them from being delayed in their suits ; and that they have to reference whatever to other suitors or to the rest of the Queen's subjects. It follows, that although an affidavit is so defective as to amount to no affidavit, a plaintiff may, if he choose, Waive the benefit of his right, and join issue on the plea and go to trial ; and if he does so, he cannot afterwards avail himself of the provisions of the statute. So, if he should demur to this plea, be would, in like manner, waive the benefit of the statute. If it were otherwise, the inconvenience would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit, he might waive it. The High Court granted the orders of injunction on the basis that there was a prima facie case for the respondents. The High Court held that the Act was invalid on the basis of its view that it was ultra vires the powers ofthe State Legislature. But when this Court declared that the High Court was wrong and that the Act was valid, justice requires that neither the order of injunction nor the order of the High Court declaring the Act invalid should prejudice the rights of the parties as ultimately declared. No act of a court should prejudice a party. That is the first principle of justice. It was the orders of injunction and the order declaring the Act a,-, ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2). When this Court, by its judgment, upheld the appellants' contention that the Act was valid, how could the appellants be put in the position which they would have occupied had the High Court not passed those wrong orders, except by dispensing with the necessity of issuing notices within the time? The principle of restitution requires that the party prejudiced by a wrong order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Act was valid. The appellants were, therefore, entitled to a reasonable period for filing appeals and for applying for stay of the judgment of the High Court declaring the Act to be ultra vires. It may be recalled that the judgment in Khyerbari Tea Co. Ltd. case (supra) was rendered on 13-12-1963 and the appellants preferred the appeals to this Court on 4-3-1964. How is it possible to say that the appellants were guilty of laches when it is seen that they filed the appeals within the period of limitation prescribed by law ? We have to judge the rights of the parties on the basis of the law and cannot allow ourselves to be swayed by any sentimental considerations. We think the respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by, s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents for the reasons which we have given, the authority empowered to make the assessment under s. 9(4) was competent to do so. We think the High Court went wrong in allowing the writ petitions. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law to the notice of the Court before it issued the injunctions, or, at any rate, even afterwards but within the time prescribed for the notice under Section 7(2) of the Act. A party affected cannot go to sleep over its rights and then attempt to shift the blame on to the Court for the consequences which flow from the orders passed so that it may be able to plead :"Actus Curiae Neminem Gravabit" (An act of the Court shall prejudice no man"). Such a plea appears to me to be disingenuous. it cannot apply to a case where the damage done to the powers of the taxing authorities was attributable to their own remissness or to that of their legal advisers. The next question is: Did the acts or conduct of the petitioners respondents or anything else in the case operate as a waiver or an estoppel which prevented them from agitating the serious question whether the right of the taxing authorities to realise any tax from them under the Act had become extinguished by lapse of time with the Commissioners power to issue notices prescribed by Section 7(2) of the Act ? If a waiver is a matter of agreement and not of an inference from any misleading conduct, the parties concerned must apply their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been lost by lapse of time. The power to issue a suitable notice to show cause according to rules of natural justice when a quasi-judicial function has to be exercised, can be, as we have repeatedly held, implied and read into the nature of the function to be performed even if it is not expressly mentioned. Again, I do not see what representations the petitionersrespondents had either made or could be deemed to have made by any silence of theirs so as to mislead the taxing authorities. The presumption is that everybody knows the law whether this be so or not in fact. Hence, no "estoppel in pais" or equitable estoppel, as contemplated by Sec. 115 Evidence Act, could arise here. Also, there could be no " estoppel by record" as it was neither actually nor constructively in issue whether the party obtaining an injunction in its favour was or was not to get the benefit of lapse of the time prescribed for a notice under Section 7 (2) of the Act. And, therefore, there could be no decision, actual or constructive, on such an issue. That issue could only arise after the time prescribed had expired whatever be the reason why a party could not act during the prescribed time. We have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of Section 9(4) could conceivably apply to a party after the expiry of two years, during which period a dealer or producer "may" get a notice under Section 7(2) of the Act to make return, yet, the proceedings will have to be commenced by some kind of notice that could, as indicated above, be a notice in exercise of an implied power to observe rules of natural justice although it could not, after the lapse of the prescribed time, be technically a notice under Section 7(2) of the Act. Assuming that the power to issue notice under Section 7(2) is not mandatory but only directory, inasmuch as the Commissioner "may" issue the required notice, and, furthermore, even assuming, for the purposes of argument, that such a notice, meant for the benefit of a party can be and has been waived by it, yet, I fail to see how an assessment under Section 9(4) could escape the bar created by Section 11 of the Act. This Section shows that a notice to make a return within two years of the expiry of the return period is a condition precedent to exercise jurisdiction to assess. And, such a notice could only be one under Section 7(2) of the Act. Section 11 of the Act, which seems to clinch the crucial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g all or any of the requirements which may be, included in a notice under sub-section (2) of section 19, and may proceed to assess or reassess such income, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that subsection : Provided........................... If we compare Section 11 of the Act before us with Section 30 of the Assam Agricultural Income tax Act, we find that, although, the language of Section 1 1 of the Act before us is somewhat different from that of Section 30 of the Assam Agricultural Income tax Act, yet, the effect is the same. On the language of Section 11 of the Act before us, it is evident that every case where tea or jute chargeable to tax has escaped assessment for any period or has been under assessed, the Commissioner must take action within two years of the expiry of the return period. I think it is this part of the Act which will operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore,quite apart from the question whether on the mere language of sec. 7(1) and sec 7(4) a failure to issue a notice under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
