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TMI Blog2019 (9) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to said Section however empowered the Judge considering the appeal to relieve the appellant from the rigour of pre-deposit if in the opinion of the Judge it would cause undue hardship to the appellant. Whether the condition of 25% pre-deposit for hearing first appeal is onerous, harsh, unreasonable and, therefore, violative of Article 14 of the Constitution of India? - HELD THAT:- The decision of the Constitution Bench of this Court in Seth Nand Lal [ 1980 (5) TMI 101 - SUPREME COURT ] did consider whether the requirement of pre-deposit would cause undue hardship. However considering that the liability in question and consequential requirement of pre-deposit was a meagre rate of the annual land-tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision conferring the discretion on the appellant/revisional authority to relax or waive the condition was not found to be onerous or unreasonable. Thus, Section 62(5) of the PVAT Act is legal and valid and the condition of 25% of pre-deposit not to be onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. Whether the first appellate authority in its right to hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade thereunder shall lie, - (a) if the order is made by a Excise and Taxation Officer or by an officer-in-charge of the information collection centre or check post or any other officer below the rank of Deputy Excise and Taxation Commissioner, to the Deputy Excise and Taxation Commissioner; (b) if the order is made by the Deputy Excise and Taxation Commissioner, to the Commissioner; (c) if the order is made by the Commissioner or any officer exercising the powers of the Commissioner, to the Tribunal. (2) An order passed in appeal by a Deputy Excise and Taxation Commissioner or by the Commissioner or any officer on whom the powers of the Commissioner are conferred, shall be further appealable to the Tribunal. (3) Every order of the Tribunal and subject only to such order, the order of the Commissioner or any officer exercising the powers of the Commissioner or the order of the Deputy Excise and Taxation Commissioner or of the designated officer, if it was not challenged in appeal or revision, shall be final. (4) No appeal shall be entertained, unless it is filed within a period of thirty days from the date of communication of the order appealed against. (5) No appeal shall be entert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the year 2007- 08, returns for the period from 1.4.2007 to 31.3.2008 under the PVAT Act alongwith requisite information in prescribed form had been filed with the authority. Thereafter, annual statement in Form VAT 20 had been filed before the last date as prescribed under section 26 of the PVAT Act and Rule 40(1) of the Punjab Value Added Tax Rules, 2005 (in short, the Rules ). Similarly, for the years 2008-09 and 2009- 10, returns were filed in time and annual statements in Form VAT 20 were also filed before the last dates. The Excise and Taxation Officer cum Designated Officer (ETO) respondent No.2 initiated assessment proceedings for the years 2007-08, 2008-09 and 2009- 10 by issuing notice under section 29 of the PVAT Act. The representatives of the petitioner attended the proceedings and tendered explanation. Assessments had been framed under the PVAT Act vide orders dated 19.9.2011, 31.10.2012 and 31.11.2012 for the assessment years 2007-08, 2008-09 and 2009-10, Annexures P.1, P.1/A and P.1/B respectively. The officer made following additions to the taxable turnover declared in the returns:- i) the receipts in respect of charges from the customers as meter rent had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited. Aggrieved by the order, the petitioner filed CWP Nos.17370 of 2013, 17031 and 17053 of 2013 which were disposed of vide order dated 31.10.2013, Annexure P.8. The petitioner was allowed to withdraw the writ petition so as to enable it to challenge the vires of Section 62(5) of the PVAT Act alongwith challenge to the orders passed by the Tribunal. Hence the instant writ petitions by the petitioner(s). 6. After framing the questions as aforesaid, the High Court considered the relevant decisions of this Court as well as some of the High Courts and observed as under:- It is, thus, concluded that the State is empowered to enact Section 62(5) of the Act and the said provision is legal and valid. The condition of 25% pre-deposit for hearing first appeal is not onerous, harsh, unreasonable and violative of the provisions of Article 14 of the Constitution of India. While considering question (c), the High Court principally relied upon the decision of this Court in Income Tax Officer v. M. K. Mohammed Kunhi (1969) 2 SCR 65 and various judgments of the High Courts which had followed said decision. The relevant passages from the decision in Kunhi1 are:- The argument advanced on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory. The High Court also referred to the decision of this Court in Commissioner of Income Tax v. Bansi Dhar Sons and Others (1986) 157 ITR 665 (SC) = (1986) 1 SCC 523 . Finally the High Court concluded :- It is, thus, concluded that even when no express power has been conferred on the first appellate authority to pass an order of interim injunction/protection, in our opinion, by necessary implication and intendment in view of various pronouncements and legal proposition expounded above and in the interest of justice, it would essentially be held that the power to grant interim injunction/protection is embedded in Section 62(5) of the PVAT Act. Instead of rushing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge to the validity of Section 406 of the Bombay Provincial Municipal Corporations Act, 1949 as amended by Gujarat Act No.5 of 1970. As per the relevant provision, no appeal against the ratable value or tax would be entertained unless the amount claimed was deposited with the Commissioner. The proviso to said Section however empowered the Judge considering the appeal to relieve the appellant from the rigour of pre-deposit if in the opinion of the Judge it would cause undue hardship to the appellant. The discussion in that behalf was as under:- 40. After hearing the learned counsel for the parties, we are unable to subscribe to the view taken by the High Court. Section 406(2)(e) as amended states that no appeal against a rateable value or tax fixed or charged under the Act shall be entertained by the Judge in the case of an appeal against a tax or in the case of an appeal made against a rateable value after a bill for any property tax assessed upon such value has been presented to the appellant, unless the amount claimed from the appellant has been deposited by him with the Commissioner. According to the proviso to the above clause, where in any particular case the Judge is of opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spells out the consequences flowing from the omission and default of a person who despite the fact that the deposit of the amount found due from him would cause him no hardship, declines of his own volition to deposit that amount. 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 section provided that . . . no appeal shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and revision that impede the implementation of the ceiling policy; secondly, having regard to sub-sections (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is correlated to the landholdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of ₹ 8 per acre annually; fourthly, the deposit to be made or bank guarantee to be furnished is confined to the landholdings tax payable in respect of the disputed area i.e. the area or part thereof which is declared surplus after leaving the permissible area to the appellant or petitioner. Having regard to those aspects, particularly the meagre rate of the annual land-tax payable, the fetter imposed on the right of appea1/revision, even in the absence of a provision conferring discretion on the appellate/revisional authority to relax or waive the condition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretion on the appellant/revisional authority to relax or waive the condition was not found to be onerous or unreasonable. 13. In Shyam Kishore (1993) 1 SCC 22, the provision that came up for consideration was Section 170(b) of the Delhi Municipal Corporation Act, 1957 under which the amount in dispute relating to property tax is required to be deposited before the appeal can be entertained. Said Section 170(b) is as under: S.170 Conditions of right to appeal No appeal shall be heard or determined under Section 169 unless- (a) .. (b) the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation. After considering relevant decisions on the point, a modality was suggested under which some relief could be granted to the concerned appellant but finally a Bench of three Judges of this Court suggested that the solution lay in having the statute itself amended. The discussion in that behalf was as under:- 44. The appellate judge s incidental and ancillary powers should not be curtailed except to the extent specifically precluded by the statute. We see nothing wrong in interpreting the provision as permitting the appellate authority to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 47A reads:- Provided that no reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned. The relevant discussion was as under:- 18. In our opinion, there is no violation of Articles 14, 19 or any other provision of the Constitution by the enactment of Section 47-A as amended by A.P. Amendment Act 8 of 1998. This amendment was only for plugging the loopholes and for quick realisation of the stamp duty. Hence it is well within the power of the State Legislature vide Entry 63 of List II read with Entry 44 of List III of the Seventh Schedule to the Constitution. 19. It is well settled that stamp duty is a tax, and hardship is not relevant in construing taxing statutes which are to be construed strictly. As often said, there is no equity in a tax vide CIT v. V.MR.P. Firm Muar AIR 1965 SC 1216 . If the words used in a taxing statute are clear, one cannot try to find out the intention and the object of the statute. Hence the High Court fell in error in trying to go by the supposed object and intendment of the Stamp Act, and by seeking to find out the hardship which will be cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may result in great prejudice, this Court went on to observe:- 28. We may, however, consider a hypothetical case. Supposing the correct value of a property is ₹ 10 lakhs and that is the value stated in the sale deed, but the registering officer erroneously determines it to be, say, ₹ 2 crores. In that case while making a reference to the Collector under Section 47-A, the registering officer will demand duty on 50% of ₹ 2 crores i.e. duty on ₹ 1 crore instead of demanding duty on ₹ 10 lakhs. A party may not be able to pay this exorbitant duty demanded under the proviso to Section 47-A by the registering officer in such a case. What can be done in this situation? 29. In our opinion in this situation it is always open to a party to file a writ petition challenging the exorbitant demand made by the registering officer under the proviso to Section 47-A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47-A of the Stamp Act by declaring the demand a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. .It is open to the Legislature to impose an accompanying liability upon a party upon whom legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition in case the party concerned seeks to avail of the said right is a valid piece of legislation. 17. In the light of these principles, the High Court rightly held Section 62(5) of the PVAT Act to be legal and valid and the condition of 25% of pre-deposit not to be onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. Now we turn to question (c) as framed by the High Court and consider whether the conclusions drawn by the High Court while answering said question were correct or not. 18. It is true that in cases falling in second category as set out in paragraph 11 hereinabove, where no discretion was conferred by the Statute upon the Appellate Authority to grant relief against requirement of predeposit, the challenge to the validity of the concerned provision in each of those c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. The true position is neatly stated thus in Broom's Legal Maxims, 10th Ed., at page 312 : It is a rule that when the law commands a thing to be done, it authorises the performance of whatever may be necessary for executing its command. (Emphasis added) 21. The same principle was adverted to in Shyam Kishore (1993) 1 SCC 22. What is noteworthy is that the decision in Kunhi1 was also considered and it was observed :- 40. We have set out the terms of Section 170(b) earlier. This has been interpreted by the Corporation to mean that an appeal preferred by an assessee has to be dismissed in limine unless the tax in dispute has been paid and that there is no scope for the appellate authority exercising any powers of stay pending disposal of the appeal. Prima facie , the contention of the Corporation that to read a power in the District Judge to grant stay of collection of the disputed tax pending disposal of the appeal will run counter to Section 170( b ) appears to be well founded. Though the normal rule is that the incidental and ancillary powers of an appellate authority will include a power to grant stay of the order under appeal - vide, ITO v. M.K. Mohammed Kunhi (1969) 2 SCR 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer of the court to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the court. It cannot be invoked with reference to a matter which is covered by a specific provision in the Code. It cannot be exercised in conflict with the general scheme and intent of the Code. It cannot be used either to create or recognise rights, or to create liabilities and obligations not contemplated by any law. 29. Considering the scope of Section 151, in Padam Sen v. State of U.P. (AIR 1961 SC 218), this Court observed: (AIR p. 219, paras 8-9) 8. The inherent powers of the court are in addition to the powers specifically conferred on the court by the Code. They are complementary to those powers and therefore it must be held that the court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the legislature. 9. The inherent powers saved by Section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with the limitation that exercise of such power cannot be undertaken for doing that which is specifically prohibited, same limitation must be read into the scope and width of implied power of an appellate authority under a statute. In any case the principle laid down in Matajog Dobey 1955 (2) SCR 925 states with clarity that so long as there is no express inhibition, the implied power can extend to doing all such acts or employing such means as are reasonably necessary for such execution. The reliance on the principle laid down in Kunhi1 cannot go to the extent, as concluded by the High Court, of enabling the Appellate Authority to override the limitation prescribed by the statute and go against the requirement of pre-deposit. The High Court was clearly in error in answering question (c). 25. As stated in P. Laxmi Devi (2008) 4 SCC 720 and Har Devi Asnani (2011) 14 SCC 160, in genuine cases of hardship, recourse would still be open to the concerned person. However, it would be completely a different thing to say that the Appellate Authority itself can grant such relief. As stated in Shyam Kishore (1993) 1 SCC 22 any such exercise would make the provision itself unworkable and r ..... 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