Delhi High Court
Haryana Trading Co. vs The Addl. Commissioner Of Sales-Tax & ... on 20 January, 1998
Equivalent citations: 1998IIAD(DELHI)249, 1998(44)DRJ276
Author: R.C. Lahoti
Bench: R.C. Lahoti, Dalveer Bhandari
ORDER R.C. Lahoti, J.
1. An exparte order of assessment for the assessment year 1986-87 was framed by Sales Tax Officer Ward No.II, New Delhi under the provisions of Delhi Sales Tax Act, 1975. The assessee preferred an appeal under Section 43 of the Act. By order dated 17.2.92, the Additional Commissioner of Sales Tax required the petitioner to deposit Rs.2 lacs and furnish security in the sum of Rs.2 lacs under subsection (5) of Section 43. As against the order dated 17.2.92, the petitioner preferred an appeal to the Tribunal which by order dated 9.4.92 modified the order under Section 43(5) of the ACST requiring the petitioner to deposit Rs.1 lac in cash and furnish security in the sum of Rs.2 lacs. The petitioner could not comply with the order. On 3.6.92 the ACST dismissed the appeal in limine for noncompliance with the order under Section 43(5). The petitioner preferred an appeal to the Tribunal against the order dated 3.6.92 which was dismissed.
2. Having thus lost the remedy of appeal against the exparte order of assessment dated 15.3.91, the petitioner preferred a revision petition under Section 47 of the Act to the ACST, laying challenge to the exparte order of assessment passed by the STO. By order dated 19.7.96 (Annexure P- 7) the revision filed by the petitioner has been dismissed as not maintainable in view of the petitioner having already availed the remedy of appeal against the order of assessment. It is this order dated 19.7.96 which is impugned herein.
3. The sole and singular contention advanced on behalf of the petitioner before this Court is that the ACST has committed an error of law in dismissing his revision petition as not maintainable in as much as the appeal preferred by him having not been decided on merits but having been dismissed as not entertainable the applicability of the doctrine of merger was not attracted and there was otherwise no bar in law to the entertainability of the revision by the ACST.
4. For the sake of ready reference, we may extract and reproduce the relevant provisions of law hereunder :-
43. Appeals._(1) Any person aggrieved by any order, not being an order mentioned in Section 44 under this Act or the rules made thereunder, may appeal to the prescribed authority :
xxxx xxxxx xxxx xxxxx xxxxx xxxxx (5) No appeal against an order of assessment with or without penalty or against an order imposing the penalty shall be entertained by an appellate authority unless such appeal is accompanied by a satisfactory proof of the payment of tax with or with out penalty or, as the case may be, of the payment of penalty in respect of which the appeal has been preferred:
Provided that the appellate may, if it thinks fit, for reasons to be recorded in writing entertain an appeal against such order
(a) without payment of the tax and penalty, if any, or as the case may be, of the penalty, on the appellant furnishing in the prescribed manner security for such amount as it may direct, or
(b) On proof of payment of such smaller sum, with or without security for such amount of tax or penalty which remains unpaid, as it may direct :
Provided further that no appeal shall be entertained by the appellate authority unless it is satisfied that such amount of tax as the appellant may admit to be due from him has been paid.
xxxx xxxxx xxxxx
47. Revision of other orders._ (1) In the case of any order, other than an order referred to in Section 44 or to which Section 46 applies, passed by a person appointed under Subsection (2) of Section 9 to assist him, the Commissioner may, either on his own motion or on an application filed in accordance with such rules as may be prescribed, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass orders thereon, not being an order prejudicial to the dealer, as he thinks fit :
Provided that the Commissioner shall not revise any order under this subsection,
(a) where an appeal against the order is pending before the appellate authority under Section 43; or
(b) where, if such appeal lies, the time within which it may be filed has not expired; or
(c) where in the case of the second appeal, the dealer has not waived his right of appeal.
(2) The Commissioner shall not on his own motion revise any order under this Section after the expiry of two years from the date of the order sought to be revised.
(3) In the case of an application for revision under this Section by the dealer, the application shall be made within two years from the date on which the order in question was communicated to him or the date on which he otherwise comes to know of it, whichever is earlier.
5. The contention of the learned counsel for the respondent has been that the petitioner should be deemed to have not waived his right of preferring an appeal and therefore Clause (a) read with Clause (c) of the proviso appended to subsection (1) of Section 47 the petitioner's right to file the revision was lost and so was the jurisdiction of the Commissioner to revise the order of assessment.
6. In our opinion right to file an appeal or a revision are both vested rights of litigant to enter a superior court in the event of his feeling aggrieved by an order of subordinate authority. The right cannot be taken away except by a statutory bar. Section 47 of the Act confers a right on the assessee to file a revision to the Commissioner if the order be not one referred to in Section 44 or Section 46, which in the case at hand the impugned order is not. Clause (c) of the proviso relied on by the learned counsel for the respondents refers specifically to the second appeal. Each of the clauses (a) (b) and (c) are, on the language of the provision, to be read in the alternative as the use of the word "or" suggests and therefore merely by reading Clause (c) with Clause (a), as suggested by the learned counsel for the respondents, we cannot read the prohibition imposed on the revisional jurisdiction of the Commissioner in the context of second appeal as applicable to first appeal.
7. The issue arising for decision has to be decided by reference to the doctrine of merger. If it can be said that the order of assessment sought to be revised has merged into the appellate order dated 3.6.92 passed by the ACST, then the order of assessment passed by STO would cease to exist as having merged into the appellate order and in that case the question of filing the revision against the order of assessment would not arise.
8. The scheme of Section 43 shows that in order to avail the remedy of appeal the assessee must furnish proof of payment of tax and/or penalty impugned in the appeal without which the appeal cannot be entertained. The appellate authority has been conferred jurisdiction to entertain the appeal by directing the appellant to furnish security in lieu of tax and penalty or on proof of payment of such smaller sum as it may direct. However, again the noncompliance with any of the conditions contemplated by clauses (a) and (b) of the proviso to subsection (5) results into the appeal being not entertained. If the appeal itself is dismissed as having been refused to be entertained by the appellate authority then the question of appellate authority having passed any order in the sense of the issues arising for decision having been considered on merits does not arise and therefore the order of assessment would not merge into the order in appeal.
9. The doctrine of merger is not a doctrine of rigid and universal application. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provision conferring the appellate and the revisional jurisdiction. Basically, therefore, unless the appellate authority has applied its mind to the original order or any issue arising in appeal while passing the appellate order, one should be careful in applying the doctrine of merger to appellate order (see State of Madras Vs. Madurai Mills Co. ).
10. In State of Orissa & Ors. VS. Krishna Stores (1997) 104 STC 594 the appeal was dismissed as it was not in the specific form or as all the requirements of the form were not fully complied with. Their Lordships held that the disposal of the appeal could not be called to be such an appellate order as would attract the applicability of the doctrine of merger. It cannot be said to be rejection or dismissal of appeal after hearing the appellants on merits. Their Lordships held :-
"Unless the appellate authority has applied its mind to the original order or any issue arising for appeal while passing the appellate order one should be careful in applying the doctrine of merger with the appellate order"
11. We may also refer with advantage to the principles laid down by the Supreme Court in the case of Rani Chabbra Vs. Lt.Col.Surajjit which lends support to the proposition that dismissal of an appeal for noncompliance with any condition relating to the filing of the appeal would not attract applicability of doctrine of merger. Their Lordships have observed that dismissal of an appeal for nonprosecution may amount to 'disposal' of an appeal but is not an 'effective adjudication' of appeal on merits so as to attract applicability of theory of merger. The reasoning will apply with added force to a case of dismissal of an appeal consequent upon its having been refused to be entertained as is the case at hand. The underlying scheme of the Delhi Sales Tax Act shows that the person aggrieved must have at least one opportunity of contesting on merits the order of assessment to the extent to which he is aggrieved either before an appellate forum or before a revisional forum. If the appellate order made otherwise then on merits would exclude the right of a person aggrieved to file a revision too, it would lead to incongruous results not contemplated by the scheme of the Act.
12. For the foregoing reasons, we are of the opinion that the Addl. Commissioner of Sales Tax was not justified in holding the revision petition not maintainable before him by order dated 19.7.96 solely for the reason of the appeal preferred by the petitioner having been dismissed by him as non-entertainable for noncompliance with condition as to predeposit.
13. The petition is allowed. The impugned order dated 19.7.96 passed by the Addl. Commissioner of Sales Tax is hereby quashed and set aside. The revision filed by the petitioner shall be deemed to be pending and shall now be taken up for hearing and disposal in accordance with law.