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TMI Blog1980 (9) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... ich it has refused to refer. When these matters were before the court the dealer made an application for stay of the recovery of ₹ 1,39,698 which the sales tax officer had raised as a demand against the dealer and which was affirmed both by the Additional Commissioner and the Tribunal in appeal. (3) We are concerned only with the question of stay in this reference. Has this court power to stay recovery of tax and penalty ? This is the question. At this stage it would be convenient to set out section 45 of the Act: 45(1)Within sixty days from the date of an order passed by the Appellate Tribunal under sub-section (6) of section 45, the dealer or the Commissioner may, by application in writing, and accompanied, where the application is made by a dealer, by a fee of fifty rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and, subject to the other provisions contained in this section, the Appellate Tribunal, shall within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court : Provided that the Appellate Tribunal may, if it is satisfied tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of tax and penalty due in accordance with the order of the Appellate Tribunal in respect of which an application' has been made under sub-section (1) shall not be stayed pending the disposal of such application or any reference made in consequence thereof. In this reference 'we are in fact called upon to interpret this sub-section. (5) Counsel for the dealer raised a two-fold argument before us. In the first place he said that there is no bar to the grant of stay by the High Court in the case of a reference under section 45. He argued that sub-section (7) is addressed to the Appellate Tribunal and it is the Appellate Tribunal which has been prohibited from granting stay when a reference is pending in the High Court. He submitted that this does not take away the power of the High Court to grant stay. Secondly, he said that in any event if it is held that sub-section(7) denies to the High Court power to grant stay it restricts itself only to those cases in which reference is made under sub-section ( 1 ). Consequently lie maintained that there was no bar to the High Court in granting stay where the reference is sought by a dealer under sub-section (2) of section 45. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f recovery of revenue the legislature is rather stringent because an unfettered power of stay can bring the wheels of the Government to a halt. But it does not mean that in a proper case the Appellate Tribunal cannot grant stay on terms. (9) Nor do I think that there is any force in the second contention of the counsel. I cannot accept that the High Court has the power to stay where the reference is sought by the dealer under sub-section (2) of section 45. The scheme of section 45 is fairly clear. When a reference is made to the High Court under section 45(1) or 45(2) the decision of the Appellate Tribunal cannot be looked upon as final : in other words the appeal is not finally disposed of. It is only when the High Court decides the case, exercises its advisory jurisdiction and gives direction to the Tribunal on the question of law and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of. Sub-section (7) of section 43 makes it clear. It says : SAVEas provided in section 45, an order passed by the Appellate Tribunal on appeal shall be final. (10) Therefore, it is clear that except in cases which may come up to the High Court on referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the disposal of the appeal before it. Power to grant stay is incidental and ancillary to the appellate jurisdiction. When an appeal is pending before the Appellate Tribunal the statute conferring appellate jurisdiction expressly grants the power to stay proceeding. Otherwise it will render the appeal nugatory. If the Appellate Tribunal is not given the power in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. See Income Tax Officer v. M. K. Mohammed Kunhi, (1969) 71 Itr 815(4). (14) It is true that the power of stay is not to be exercised in a routine *way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions, and the stay will be ganted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated by allowing recovery proceedings to continue during the pendency of the appeal. (15) In the matter of stay the statute goes only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference in the two sections is that in place of the Chief Commissioner who was the appellate authority under the old Act of 1941 the Sales Tax Tribunal has come in the new Act. Otherwise the draftsmen as well as the legislature have retained the section in the same form as it was in the Act of 1941. (19) The language of sub-section (7) is compelling upon me and there is no sufficient ambiguity to justify me in interpreting this subsection by reference to its history or mischief against which it was directed. I will only read a passage from the rule declared by the Judges in advising the House of Lords in Sussex Peerage Case, the well known words in 18 English Reports 1034 (1057) (5) (which was accepted by the Judicial Committee of the privy Council in Cargo) Ex Argos in L.R. 5 P.C. Appeals (1873-74) 134 (153) (6) to this effect : If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver. (20) The words of the present statute are precise and unambiguous, and in spite o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be given its appropriate place and purpose, which was to enact a positive prohibition to the exercise of powers of stay, whether it be Tribunal or the High Court, once the Appellate Tribunal has given its verdict on the amount of tax due and the penalty, if any. I cannot at all agree that sub-section (7) creates a bar to the Appellate Tribunal but not to the High Court in the exercise of its powers of stay. I, therefore. hold that an application for stay to the High Court is not competent because it has no power of stay. (23) It will be anomalous to hold that the High Court has no power to grant stay when the reference is made to it under sub-section ( 1 ) but it is left free to stay recovery where the reference is made to it under sub-section (3) of section 47. Take this very case. The Tribunal has referred to this court one question under sub-section (1) but it has refused to refer other 17 questions which the dealer wanted it to refer. Now the dealer has made an application under sub-section (2) to this court against such refusal. Will it be right to say that under sub-sections (2) and (3) the High Court has the power to stay but not under sub-section (1) ? It will then me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof mean that we must, in dealing with causation look at the proximate and not the remote cause : See Hall Brothers Steamship Co. Limited v. Young (1939) 1 K. B. 748 (761-762) (7). (27) Now it appears to me that a reference made to this court under sub-sections (2) and (3) is te result following as a natural sequence from the application made under sub-section (1) of section 45. It is the proximate and not the remote cause. If the Tribunal accepts the application of the Commissioner or the dealer under sub-section (1) it itself makes a reference and states the case for the opinion of the High Court. But where it refuses to state the case on the ground that no question of law arises the dealer or the Commissioner, as the case may be, approaches the High Court against such refusal and the High Court, if it is satisfied that the Appellate Tribunal was wrong in refusing to state the case, will direct the Appellate Tribunal to state the case and refer it to the High Court. The Appellate Tribunal on receipt of the requisition from the High Court shall state the case and refer it accordingly. It is left with no option. I am therefore of opinion that whether the reference is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the reference under section 66 of the Indian Income Tax Act 1922 or section 256 of the Income Tax Act 1961. I think it is unnecessary for me to pronounce on the correctness of this decision in these sales tax cases which are under the Sales Tax Act and not under the Indian Income Tax Act. In the absence of a concrete income tax case and without the benefit of rival arguments from the income tax department and the assessed it will not be proper for us, I think, to express a definitive opinion on the correctness of that decision. I content myself with saying that a contrary view can be plausably argued, perhaps with greater force and cogency. (31) The matter will now be placed before the division bench for disposal of these cases in accordance with law. S.B. Wad, J. (32) The question referred to the Full Bench is whether in a reference which is pending or where an application has been filed under section 256(2) of the Income-tax Act or section 45(2) of the Delhi Sales-Tax Act the High Court has jurisdiction to grant stay of recovery of tax? I agree with Avadh Behari, J. that we should answer only the question relating to section 45(2) of the Delhi Sales Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities. Indeed one is superior to another. The nature of remedy is also different. Application under section 45(1) appeals to the discretion of the Tribunal. Application under section 45(2) invokes a special order from a superior court obliging the Tribunal (from without) to make a reference. Can we say that the second application is a consequence of the first application? When an application is granted under section 45(1) and the reference comes to a High Court, this reference can be said to be the consequence of an application under section 45(1). But when the application is refused and a distinct remedy is persued, can a reference under section 45(2) be described as a 'cnsequence' of an application under section 45(1). 'Consequence' connotes casual connection. One must be a cause and the other must be its result. Applications under section 45(1) and 45(2) are not strangers to each other. They are related. But I find that they are not causally related. I do not think that the words or anv reference made in' consequence thereof can be used as a convenient peg to hang this hat on. Truly they are of no assistance. (35) I do not think that any absurd resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alls within the mischief of section 45(7) or not the doubt must be resolved in favor of the assessed. The counsel states that an assessed should not be deprived of a possible legal relief from the higher court, by straining the language of section 45(7). This submission has a merit. Relief of the stay of recovery of tax is no doubt a discretionary relief. The main consideration is justice of the matter. But if an assessed succeeds in persuading the High Court on the justice of his case why should he be deprived of this relief unless there are expressed words to that effect in the statute. Being a provision of a taxing statute section 45(7) must be strictly construed. In case of a doubt, construction favoring an assesses should be preferred. These are time honoured principles of interpretation of tax statute. (38) Imposing fetters of section 45(7) on an application under section 45(2) (which is not warranted by plain reading of the section) would make serious inroads on the powers of the High Court as a superior court. High Court has inherent powers under section 151, C.P.C. to grant stay, including stay of recovery of tax. There are no express words of prohibition in section 45( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate power. But where the Tribunal is not able to resolve a ques tion of law and when it finds it necessary to seek the guidance of the High Court, it makes a reference to High Court. Thus where a reference is made the matter (at least temporarily) goes out of the control of the Tribunal. What is the necessity of retaining the powers of stay of recovery when it has no control left on the matter. The High Court has to resolve the principal question of law referred. It is the High Court that will need the incidental power to grant stay of the recovery of tax. When the legislature has advisedly conferred this special function on the High Court, namely, to pronounce authoritative judgment on the question of law, can it be said that it was grudging to give incidental power of stay of recovery of tax. Can it be said that legislature was ignorant of the inherent powers and powers incidental to mandamus (of the High Court) when it decided to entrust this additional function to High Courts. However, it is unnecessary to express any final opinion on this question because the reference is limited to section 45(2) only. (41) My conclusions are : (1) There are no express and categorical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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