Kerala High Court
K. Premerajan vs State Of Kerala on 18 December, 2007
Equivalent citations: (2008)14VST202(KER)
Author: H.L. Dattu
Bench: H.L. Dattu, K.M. Joseph
ORDER H.L. Dattu, C.J.
1. The assessee is common in all these petitions, and therefore, these petitions are clubbed, heard and disposed of by this common judgment.
The assessee has called in question the correctness or otherwise of the common order passed by the Sales Tax Appellate Tribunal in T.A. Nos. 404 of 2003 and 405 of 2003 and Cross Objection Nos. 34 of 2003 and 35 of 2003 dated May 12, 2004.
2. The assessee is a dealer registered both under the provisions of the Kerala General Sales Tax Act, 1963 ("the Act", for short) and the Central Sales Tax Act, 1956.
The assessee is a small-scale industrial unit (for the sake of brevity, referred to as "SSI unit") and is engaged in the manufacture of block board, flush board and plywoods.
3. The State Government, in exercise of the power conferred by Section 10 of the Kerala General Sales Tax Act, and in supersession of notifications mentioned in the Schedule, having considered it necessary in public interest, has issued Notification S.R.O. No. 1729 of 1993, granting tax exemptions to industrial units and/or reduction in the rate of tax payable on the sale or purchase, as the case may be, of goods by such industrial units, subject to conditions and restrictions specified in the notification. By S.R.O. No. 404 of 1994, Clause (x) is inserted in the notification with effect from April 1, 1994.
4. Clause (x) of the Explanation envisages certain industries which are not eligible for concession under the notification. Clause (x) is as under:
Industrial units manufacturing the following items shall not be eligible for the concessions under this notification:
(a) Biscuits
(b) Cement paints
(c) Packing cases, tea chests, plywoods, splints, veneers, wooden crates and wooden cable drums
(d) Bricks and tiles Provided that existing units manufacturing biscuits which undertook expansion, modernisation, or diversification on or after January 1, 1994 but prior to January 1, 2000 shall be eligible for the concession under the notification.
5. In order to claim exemption from payment of tax pursuant to the afore said notification, the assessee had filed an application dated January 15, 1996 before the District Level Committee constituted for the purpose of deciding whether an industry is eligible for exemption under the notification. The District Level Committee by its Order No. C2 669/96/00 dated April 18, 1996 has found the assessee is eligible for exemption from payment of tax both under the KGST and CST Acts on the manufacture and sale of block board, flush board and plywoods for the period from July 5, 1995 to July 4, 2002, i.e., for a period of seven years from the date of commercial production. The issues raised in these revision petitions revolve round the order passed by the District Level Committee and, therefore, the same is extracted and it reads as under:
M/s. Nina Boards, Development Plot, Andoor, have applied for Kerala general sales tax/Central sales tax/purchase tax exemption for new unit (strike out whichever is not applicable)
2. As per the minutes of the meeting cited above it was determined that the unit is eligible for exemption from Kerala general sales tax/Central sales tax/purchase tax/additional sales tax/surcharge and turnover tax (strike out whichever is not applicable) as per the provisions of Government Orders cited above for the following items manufactured and sold by them for the period from July 5, 1995 to July 4, 2002.
3. Items manufactured and annual capacity ____________________________________________________________________ S.No. Name of items Quantity Value ____________________________________________________________________ Block board and flush door, 84842.8 sq.m. 30,000 plywood ____________________________________________________________________
4. Therefore, as per the provisions of the above Government Order, M/s. Nina Boards, Development Plot, Andoor, eligible for tax exemption as described in para 2 above up to Rs. 20,14,263 (rupees twenty lakhs fourteen thousand two hundred and sixty-three only) against their application dated January 15, 1996.
5. The unit shall produce the certificate before the sales tax authorities for claiming the exemptions.
6. This exemption is valid only for the period mentioned in para 2 above and for an amount mentioned in para 4 above but shall cease as soon as either of these is exhausted.
6. In the annual returns filed for the assessment years 1997-98 and 1998-99, the assessee had claimed exemption both on intra and inter-State turnover of plywoods both under the KGST Act and the CST Act. The assessing authority while rejecting the returns filed as incorrect and incomplete, had issued a pre-assessment notice dated March 3, 2003, inter alia, proposing to disallow the claim both on intra and inter-State sales of plywood while completing the assessments for both the years both under the KGST and the CST Acts and also had made known to the assessee that it would be eligible to tax exemption only for sale of block board and flush board.
7. The assessee, after receipt of the pre-assessment notice, had filed its reply, by its reply letter dated March 12, 2003 justifying the claim for exemption made in the annual returns filed based on the order passed by the District Level Committee dated April 18, 1996.
8. The assessing authority after receipt of the reply so filed, by his communication dated April 4, 2003 addressed to the District Level Committee, had made a request to re-examine the sales tax exemption granted to the petitioner's unit, on the ground that the sales tax exemption granted to the unit is irregular and improper, since the product plywood is in the negative list with effect from April 1, 1994 as per S.R.O. No. 404 of 1994.
9. The District Level Committee, after examining the request made by the assessing authority, in its meeting held on June 26, 2003 has formed an opinion that the petitioner-SSI unit is not eligible for exemption from payment of sales tax on the manufacture and sale of plywoods in view of several notifications issued by the State Government from time to time and accordingly by its communication dated August 2, 2003 has informed the petitioner-unit that the order No. C2 669/96/00 dated April 18,1996 granting sales tax exemption to the petitioner-SSI unit is amended, cancelling the item plywood under para 3 of the order. The order so passed is as under:
As per letter No. 35133427/02/03 dated April 4, 2003 the Additional Sales Tax Officer, Taliparamba requested to re-examine the sales tax exemption granted to the unit stating that the sales tax exemption granted to the unit is irregular since the product plywood is in the negative list with effect from April 1, 1994 as per S.R.O. No. 404 of 1994. This case was re-examined and it was found that the sales tax exemption allowed for the product plywood is irregular since the unit was provisionally registered on November 28, 1994, i.e., after the product plywood was included in the negative list as per S.R.O. No. 404 of 1994 which is effect from April 1, 1994.
This case was placed before the District Level Committee on sales tax exemption held on June 26, 2003. The District Level Committee discussed this case and observed that the unit should not have been granted sales tax exemption for the product plywood since plywood is in the negative list with effect from April 1, 1994 as per S.R.O. No. 404 of 1994. The Committee further observed that the unit was provisionally registered after the product plywood was included in the negative lists and resolved to cancel sales tax exemption granted for the product plywood as per order first cited and instructed to amend the order accordingly. Hence this order.
Order No. C2.2058/2003 DD is dated August 2, 2003.
In the circumstances stated above, the order No. C2669/96/ DD is dated April 18, 1996 issued by the undersigned granting sales tax exemption to M/s. Nina Boards, Development Plot, Andoor is hereby amended cancelling the item plywood under para 3 of the order. Other conditions in the order remain unchanged.
Sd/-
General Manager.
10. The assessing authority, may be because, the assessments were getting 12 time-barred, has completed the assessments by confirming the proposal made in his pre-assessment notice both under the KGST and CST Acts, for both the assessment years and thereby has rejected the claim for exemption from payment of tax on the sale of plywoods.
11. In the appeal filed, the first appellate authority had accepted the claim of the assessee.
12. The Revenue being aggrieved by the orders passed by the first appellate\authority had filed appeals before the Sales Tax Appellate Tribunal in T.A. Nos. 404 of 2003 and 405 of 2003. The petitioner-SSI unit had also filed cross-objection in C.O. Nos. 34 of 2003 and 35 of 2003. The Tribunal by its common order dated 12th day of May 2004, has allowed the Revenue's appeals and has rejected the assessee's cross-objections.
13. The assessee being aggrieved by the order passed by the Tribunal has presented these four tax revision cases for the assessment years 1997-98 and 1998-99 both under the KGST and CST Acts.
14. The assessee has framed the following questions of law for our consideration and decision. They are:
1. Was the Appellate Tribunal justified in holding that the assessee is not entitled for exemption on the sales turnover of plywood? Can benefit already enjoyed be taken away at a later stage, to become prejudicial to the petitioner?
2. Is not the revision petitioner entitled for the benefit of S.R.O. No. 403 of 1994 read with the clarificatory letter dated June 8, 2002 issued by the Government as far as Section 5A purchase turnover of softwood is concerned?
3. Was the Tribunal correct in law and in the facts and circumstances of case in not deleting the interest of Rs. 54,050 levied?
15. At the outset, we reject question Nos. 2 and 3 framed for our consideration, for the reason that the questions formulated for the decision of this Court were never mooted or raised before the Tribunal. The Tribunal had no occasion to adjudicate those questions. The power of revision under Section 41 of the Act is very much limited. In exercise of this power, this Court can only adjudicate on an issue which the Tribunal has failed to decide though it was urged and argued or erroneously decided any question of law.
16. Re. Issue No. 1: The apex court in the case of Union of India v. Commercial Tax Officer [1956] 7 STC 113 has stated that "taxation under the fiscal legislation is a rule and exemptions and concessions are only exceptions to the rule. As these exceptions create inequality before law by conferring certain benefits and privileges on a particular person or class of persons, thereby increasing the burden on others, and therefore, the provisions in the law granting exemptions or concessions should be given strict interpretation."
17. The principles that require to be kept in view while deciding the issue which has come for our consideration are:
I. That, the authority who gives the promise must have the statutory or other power to give the promise which is sought to be enforced. The law on the point is settled by the decision of the apex court in case of Bakul Cashew Co. v. Sales Tax Officer [1986] 62 STC 122, a case where the State of Kerala withdrew an exemption granted retrospectively, when it is found that it had no power to do so under the Statute.
II. That, the Government or the public authority cannot be compelled to carry out a promise which is contrary to law or beyond its powers (See Home Secretary v. Darshjit Singh Grewal ).
III. That, a retrospective levy of tax, preventing the dealer from realising it from his customers will not be bad on that account [See Krishnamurthi and Co. v. State of Madras an assessee is liable to pay sales tax and the question whether he has collected it from customers or not is of no consequence. His liability is by virtue of being an assessee under the Act. [American Remedies Pvt. Ltd. v. Government of Andhra Pradesh [1999] 113 STC 400].
18. Keeping in view these well-settled legal principles, let us now advert to the fact-situation in the present case. The facts which are not in dispute nor can be disputed are, the assessee is a proprietory concern running a small scale industrial unit in the name and style of M/s. Nina Boards, Andoor. It is engaged in the manufacture and sale of block boards, flush boards and plywoods.
19. The State Government in exercise of the powers conferred by Section 10 of the Kerala General Sales Tax Act, in the public interest has issued notification S.R.O. No. 1729 of 1993, granting tax exemption to industrial units and/or reduction in the rate of tax payable on the sale or purchase as the case may be of goods by such industrial units, subject to certain conditions and restrictions. It only means that the tax exemption is granted to industrial units on the sale or purchase of goods by such industrial units. This notification is made applicable to small-scale industrial units, medium and large scale units and sick small-scale industrial units. Clause 11 of the notification provides the Explanation for the purpose of the notification. Sub-item (x) is inserted to Explanation by the State Government by issuing S.R.O. No. 404 of 1994 with effect from April 1, 1994. In view of the said insertion in the Explanation, though certain industrial units which were eligible for exemption/concession in the rate of tax payable under the Act on the sale or purchase of goods in the earlier notification is taken out from the purview of the notification, it was not in dispute nor it can be disputed that the State Government has the power to vary any notification issued under Sub-section (1) of Section 10 of the Act. It is also not disputed by the learned Counsel for the assessee that the amendment made by S.R.O. No. 404 of 1994 with effect from April 1, 1994, was in exercise of the power granted by the Legislature to the State Government under Sub-section (3) of Section 10 of the Act. The validity or otherwise of the said notification is not questioned by the assessee before any forum. Needless to say that it cannot be done in a revision petition filed against the orders passed by the Tribunal before this court. That being the factual position, the notification S.R.O. No. 1729 of 1993 and S.R.O. No. 404 of 1994 which is given effect from April 1, 1994 requires to be considered together. If it is done in that manner, the industrial units manufacturing certain items like biscuits, cement paints, packing cases, plywood would not be eligible for concession under the notification.
20. The petitioner had approached the District Level Committee by filing an, application dated January 15, 1996, for grant of exemption from payment of sales tax both under the KGST and the CST Acts. The Committee by its order dated April 18, 1996 has only determined that the petitioner's SSI unit is eligible for tax exemption on the sale of items, viz., block board, flush board and plywoods for the period from July 5, 1995 to July 4, 2002. This was done by the District Level Committee without noticing the amendment made to Notification S.R.O. No. 1729 of 1993 by the State Government, by issuing S.R.O. No. 404 of 1994 with effect from April 1, 1994, wherein, the industrial units manufacturing and effecting sales of plywood would be ineligible for concession/exemption from payment of tax under the Act. The error so committed is rectified by the District Level Committee by amending its earlier order at the instance of Additional Sales Tax Officer, who by his letter dated April 4, 2003, had requested the District Level Committee to re-examine the sales tax exemption granted to the petitioner's industrial unit on the sales of plywood manufactured and sold by the industrial unit on the ground that the exemption so granted is contrary to the conditions prescribed in the notification, S.R.O. No. 404 of 1994, wherein the manufacture and sale of plywood is placed in the negative list.
21. The learned Counsel Sri Dale P. Kurian would submit that the objection 'for granting exemption to the manufacture and sale of plywoods by the petitioner's industrial unit was raised for the first time in the year 2003 by the assessing authority before the District Level Committee and the formal order came to be passed by the Committee only on August 2, 2003 and therefore, the initiation for cancellation of the exemption itself was well beyond the exemption period of seven years and therefore, the assessing authority was not justified to rake up a dead issue while completing the assessments both under the KGST and CST Acts in the year 2003. In our opinion, there is no force nor any merit in this contention. We say so for the reason, this is not a case where the Legislature has introduced any retrospective legislation by bringing to tax an item which was exempted from payment of tax under the Act nor an act of the State Government, which is authorised to issue notification prospectively or retrospectively, to bring to tax an item which has been exempted from payment of tax under the Act. This is a case where an exemption from payment of tax is wrongly allowed, has been modified by the authority which had granted the exemption while considering the application filed by the petitioner's industrial unit.
22. In the instant case, even according to the assessee the application for 2 exemption from payment of tax came to be filed only on January 15, 1996 and the said application came to be considered by the District Level Committee and the order came to be passed only on April 18, 1996, granting exemption from payment of sales tax on block boards, flush boards and plywoods. The assessee filed its annual returns for the assessment years 1997-98 and 1998-99 and in that had claimed exemption on the sales turnover of plywoods. The assessing authority after noticing that the assessee is not entitled for exemption on the sales turnover of plywoods had not only rejected the returns filed, but also had requested the District Level Committee to re-examine the sales tax exemption granted to the unit, since the product "plywood" was in the negative list with effect from April 1, 1994. It is no doubt true that there is some delay on the part of the assessing authority in noticing the error made by the District Level Committee while granting exemption on the sale of plywoods by the petitioner's industrial unit and in our view, the petitioner cannot take advantage of a mistake or error committed by the District Level Committee. The benefit of wrong exemption granted can be corrected and appropriate decision to bring in conformity with the notifications issued under Section 10 of the Act can be passed by the competent authority.
23. The learned Counsel for the assessee would submit that the delay in initiating proceeding for correction in the orders passed by the District Level Committee is unfair procedure, depriving the petitioner's unit from passing on the tax burden on the consumer. A similar argument was advanced in the case of J.K. Jute Mills Co. Ltd. [1961] 12 STC 429 (SC) and was repelled by the apex court in the following words (page 437):
And then it is argued that a sales tax being an indirect tax, the seller who pays that tax has the right to pass it on to the consumer, that a law which imposes a sales tax long after the sales had taken place deprives him of that right, that retrospective operation is, in consequence, an incident inconsistent with the true character of a sales tax law, and that the Act is therefore not a law in respect of tax on the sale of goods, as recognised, and it is ultra vires entry 54. We see no force in this contention. It is no doubt true that a sales tax is, according to accepted notions, intended to be passed on to the buyer, and provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation. But it is not an essential characteristic of a sales tax that the seller must have the right to pass it on to the consumer, nor is the power of the Legislature to impose a tax on sales conditional on its making a provision for sellers to collect the tax from the purchasers. Whether a law should be enacted, imposing a sales tax, or validating the imposition of sales tax, when the seller is not in a position to pass it on to the consumer, is a matter of policy and does not affect the competence of the Legislature. This question is concluded by the decision of this Court in Tata Iron and Steel Co. Ltd. v. State of Bihar .
24. The apex court in American Remedies Pvt. Ltd. v. Government of Andhra Pradesh [1999] 113 STC 400 has observed (page 402):
That the State Legislature had the power to amend the Andhra Pradesh General Sales Tax Act is not in dispute. It also is not disputed that the amendment made by the 1996 Act was in exercise of its legislative powers by the State Legislature. The validity of the amendment had not been questioned either in the writ petition or even before us. That being the fact situation, the grievance made by learned Counsel for the petitioner to the effect that the demand of differential tax based on the amendment of entry 37 could not have been made, is wholly misconceived. .It is settled position that an assessee is liable to pay sales tax and the question whether he has collected it from consumer or not is of no consequence. His liability is by virtue of being an assessee under the Act.
(underlining by us Here italicised)
25. The aforesaid view is reiterated by the apex court in the case of State of Rajasthan v. J.K. Udaipur Udyog Ltd. [2004] 137 STC 438. In that the court has stated (page 457):
The mere circumstances that the respondent-companies having availed of the exemption scheme were prohibited from collecting the tax from its customers or that they had not collected the sales tax from their customers, (which assertion is strongly disputed by the appellants), is of no consequence. The primary liability to pay the sales tax is on the seller. The seller may or may not be entitled to recover the same from the purchaser. The State Government is entitled to recover the same from the respondent-companies irrespective of the fact that the respondent-companies may have lost the chance of passing on their liability to pay sales tax to their purchasers.
26. In view of the settled legal position in law, in our view, the submission of the learned Counsel that the assessee could not pass the tax burden on his customers and, therefore, the order passed by the District Level Committee is illegal cannot be accepted.
27. The learned Counsel, Sri Dale P. Kurian, would further contend that the assessing authority could not have denied exemption to the petitioner's industrial unit while completing the assessments for the assessment years 1997-98 and 1998-99 vide his order dated March 17, 2003, in view of the order passed by the District Level Committee dated April 18, 1996, which came to be amended only on August 2, 2003. In aid of his submission, the learned Counsel would rely on the observations made by the apex court in the case of Vadilal Chemicals Ltd. v. State of Andhra Pradesh [2005] 142 STC 76.
28. The issue before the apex court in the aforesaid decision was whether the appellant is entitled to exemption from payment of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 as notified by G.O. (MS) No. 117 dated March 17, 1963. While deciding this issue, the court was pleased to observe that under the incentive scheme there was only one method of verifying the eligibility for the various incentives granted including sales tax exemption. The procedure was for the matter to be scrutinised and recommended by the State Level Committee and District Level Committees and certification by the Department of Industries and Commerce by issuing an eligibility certificate. The Department of Industries and Commerce having exercised its mind and having granted the final eligibility certificate, the Commercial Tax Department could not go behind it. Especially so, when the Commissioner of Commercial Taxes had accepted the eligibility for exemption under the Government Order. In these circumstances, the Deputy Commissioner could not assume that the exemption was wrongly granted and he did not have the jurisdiction under Section 20 of the Andhra Pradesh General Sales Tax Act to go behind the eligibility certificate. The eligibility certificate issued by the Department of Industries and Commerce could not be cancelled by the Sales tax authorities.
29. Reliance was also placed on the decision of Rajasthan High Court in the case of S.B.P. Chem Pvt. Ltd. v. State of Rajasthan [1993] 90 STC 382.
30. In our opinion, the decision on which reliance is placed by learned Counsel for the petitioner would not assist the petitioner's learned Counsel. The facts and circumstances and the issues that came up for consideration in those decisions are in no way nearer to the facts and circumstances in the present case.
31. Per contra, Sri Mohammed Rafiq, learned Government Pleader for the Revenue would submit, that the District Level Committee, while considering the application filed by the petitioner for grant of exemption from payment of sales tax on plywoods, could not have travelled beyond the notification issued by the State Government in S.R.O. No. 1729 of 1993 and S.R.O. No. 404 of 1994 and could not have allowed the petitioner-small-scale industrial unit to take the benefit of exemption from payment of sales tax both on its intra and inter-State sales and therefore, the order passed by the District Level Committee dated April 18, 1996, granting exemption from payment of sales tax on the sales of plywoods is one without authority of law and without jurisdiction and therefore, the order so passed is non est in law and infirm and the assessing authority was not bound to give effect to that order while completing the assessments. In aid of his submission, the learned Counsel relies upon the decision of the apex court in the case of the State of Goa v. Colfax Laboratories Ltd. . In the said decision, the court has observed:
In the instant case the manufacturer had licence to manufacture after-shave lotions, ASLs as toilet preparations. Till the end of the year 1984 excise duty on ASLs was paid on the basis that it was a toilet preparation. On January 14, 1985 Colfax manufacturer moved an application before the Commissioner of Excise, for reclassification ASL as a 'medicinal preparation' for the purpose of levy of excise duty. The Excise Commissioner vide his order dated March 23, 1985 classified the same as 'medicinal preparation.
Held, there being no provision for a prior classification of product under the Act and the Rules made there under the entire proceedings commenced on the basis of the application given by Colfax and culminating with the order of the Commissioner of Excises are wholly without jurisdiction. The order passed by the Commissioner of Excise on March 23, 1985 being without jurisdiction is a nullity in the eyes of law and would be liable to be ignored.
32. The learned Counsel for the Revenue also relies on the observation made by this Court in the case of Teejan Beverages Ltd. v. State of Kerala [2003] 131 STC 538 : [2003] 11 KTR 443. In the said decision, the court has observed (page 569 of STC):
It is true that an eligibility certificate issued by the competent authority as per Notification S.R.O. No. 1729 of 1993 will continue to be in force till it is legally cancelled and that in the ordinary course such cancellation have only prospective operation. On the other hand if the eligibility certificate is obtained by a dealer by fraud or collusion, it vitiates the entire proceedings. Similarly if the authority issues an eligibility certificate without jurisdiction then also such eligibility certificate will be infirm and non est. In the instant case, it must be noted that the appellants claimed before the Industries Department as well as before the competent authority under the notification that their product is mineral water. In fact, the product which is produced by the appellants is not mineral water at all and that is the reason why they have changed the name of the product when standards have been prescribed for mineral water in the Prevention of Food Adulteration Act and the Rules. From this it is clear that though the product is named as 'mineral water' it is not mineral water and by the use of the name mineral water the appellants were trying to mislead the authorities for the purpose of getting exemption. In other words the appellants had given the name 'mineral water' without the product being mineral water. According to us, this mis-representation on the part of the appellants vitiates the entire proceedings and consequently the appellants cannot get the benefit of the eligibility certificate erroneously issued.
33. The issue that falls for our consideration is whet/her the assessing 35 authority was justified in completing the assessments for the assessment years in question, by ignoring the orders passed by the District Level Committee, which had declared that the assessee is entitled for exemption from payment of sales tax on the sale of plywoods, both intra and inter-State sales. To answer this issue, it may be useful to notice pertinent observations made by learned authors H.W.R. Wade and C.F. Forsyth in their book on administrative law. On the topic, "Jurisdiction and nullity", it is stated:
An act which is for any reason in excess of power (ultra vires) is often described as being 'outside jurisdiction'. 'Jurisdiction', in this context, means simply 'power', though sometimes it bears the slightly narrower sense of 'power to decide', e.g., as applied to statutory tribunals. It is a word to which the courts have given different meanings in different contexts, and with which they have created a certain amount of confusion. But this cannot be explained intelligibly except in the particular contexts where difficulties have been made. Nor should the difficulties be exaggerated. For general purposes 'jurisdiction' may be translated as 'power' with very little risk of inaccuracy.
Any administrative act or order which is ultra vires or outside jurisdiction is void in law, i.e., deprived of legal effect. This is because in order to be valid it needs statutory authorisation, and if it is not within the powers given by the Act, it has no legal leg to stand on. The court will then quash it or declare it to be unlawful or prohibit any action to enforce it. The terminology here depends to some extent on the remedy granted. 'Quashing' is used in connection with the remedy of certiorari. A declaratory judgment is an alternative remedy with similar effect; it declares the offending act to be a nullity in law. Prohibition of execution may be an order of prohibition (a prerogative remedy) or an injunction. But these technicalities make no difference to the legal result; an act found to be outside jurisdiction (ultra vires) is void and a nullity, being destitute of the statutory authority without which it is nothing.
Once the court has declared that some administrative act is legally a nullity, the situation is as if nothing had happened. In this way the unlawful act or decision may be replaced by a lawful one. If a compulsory purchase order is quashed as being ultra vires, there is nothing to prevent another order being made in respect of the same land, provided that it is done lawfully. Thus a public authority or Tribunal is often given locus poenitentiae and is able to correct an error by starting afresh--something which it might otherwise be unable to do.
34. The expression "jurisdiction" came up for consideration before the apex court in the case of Official Trustee v. Sachindra Nath Chatterjee , Union of India v. Tarachand Gupta & Bros and Hari Prasad Mulshanker Trivedi v. V.B. Raju .
35. In re. Sachindra Nath Chatterjee's case the apex court held:
Before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought but must also have the authority to pass the order sought for. It is not sufficient that it has some jurisdiction in relation to the subject-matter of the suit. Its jurisdiction must include the power to hear and decide the questions at issue, the authority to hear and decide the particular controversy that has arisen between the parties.
36. In re. Tarachand Gupta and Bros.' case the Supreme Court has observed:
...The word 'jurisdiction' has both a narrow and a wider meaning. In the sense of the former, it means the authority to embark upon an enquiry; in the sense of the latter it is used in several aspects, one of such aspects being that the decision of the Tribunal is in noncompliance with the provisions of the Act. Accordingly, a determination by a Tribunal of a question other than the one which the statute directs it to decide would be a decision not under the provisions of the Imports and Exports Control Act, 1947 and therefore, in excess of its jurisdiction.
37. In re. Hari Prasad Mulshanker Trivedi's case , the Supreme Courts has stated:
Though the dividing line between lack of jurisdiction or power and erroneous exercise of it has become thin, the distinction between the two has not been completely wiped out. It is true that there is difficulty in formulating an exhaustive rule to tell when there is lack of power and when there is an erroneous exercise of it. The difficulty has arisen because the word 'jurisdiction' is an expression which is used in a variety of senses and takes its colour from its context. Whereas the 'pure' theory of jurisdiction would reduce jurisdictional control to a vanishing point, the adoption of a narrower meaning might result in a more useful legal concept even though the formal structure of law may lose something of its logical symmetry....
38. The present case is a case of want of jurisdiction and not one of irregular 40 assumption of jurisdiction. We say so for the reason, that under the notification the District Level Committee is authorised to determine, whether a particular industry manufacturing a particular commodity is eligible for exemption from payment of tax under the Act or not. The negative list of industries is appended to the notification would specifically provide that certain industrial units manufacturing items such as biscuits, cement paints, packing cases, tea chests, plywood, etc., shall not be eligible for the concessions under the notification. Therefore, the District Level Committee while considering the application filed by the petitioner's industrial unit claiming exemption from payment of sales tax on the manufacture and sale of plywoods did not have jurisdiction to entertain such an application. Therefore, it can safely be said that this is a case of District Level Committee having want of jurisdiction and not one of irregular assumption of jurisdiction. Therefore, the order passed by the District Level Committee in regard to plywood is one without jurisdiction and therefore, a nullity in the eye of law and therefore, the assessing authority was justified in passing the assessment orders for the assessment years 1997-98 and 1998-99 in levying tax under the Act on the sale of plywoods both under the KGST and CST Acts.
39. The Sales Tax Appellate Tribunal can decide both question of law and questions of fact. Alternatively, it can be said that the Tribunal is the last fact-finding authority. Proceedings before the Tribunal is the continuation of original proceedings. In the present case, when the Tribunal decided the appeal, the cancellation order passed by the District Level Committee at the instance of the assessing authority dated August 2, 2003 was available on record. The Tribunal having noticed the same, was justified in confirming the assessment orders passed by the assessing authority, even assuming there was some procedural irregularity when the assessments were completed by the assessing authority.
40. In view of the above discussion, we do not see any merit in these revision petitions and therefore, they require to be rejected and accordingly they are rejected and the question of law framed by the assessee is answered against the assessee and in favour of the Revenue.
Ordered accordingly.