Madhya Pradesh High Court
Sadhana Enterprises vs Commissioner Of Sales Tax on 5 December, 1985
Equivalent citations: [1987]64STC172(MP)
JUDGMENT G.G. Sohani, J.
1. The order in this case will also govern the disposal of Miscellaneous Civil Case Nos. 174 of 1984, 176 of 1984, 175 of 1984, 167 of 1984 and 166 of 1984.
2. By these references under Section 44 of the M.P. General Sales Tax Act, 1958 (hereinafter referred to as "the Act"), the Board of Revenue has referred the following questions of law to this Court for its opinion :
(1) Whether, under the facts and circumstances of the case, the Tribunal was justified in holding that the appeal was considered for admission by the Deputy Commissioner on 30th April, 1982 and his summary dismissal of the appeal on 30th June, 1982, was in order ?
(2) Whether; under the facts and circumstances of the case, the Tribunal was justified in holding that the payment of sums due under Section 38(3) of the M.P. General Sales Tax Act, 1958, was to be made with the memorandum of appeal and in absence, therefore, the appeal could be summarily rejected ?
3. The material facts giving rise to these references briefly, are as follows :
The assessee was assessed to sales tax and to entry tax under the State Act and the Central Act by the Sales Tax Officer, Jhabua, by his order dated 25th December, 1981. These assessments pertained to the periods 26th December, 1974, to 10th October, 1977 and 10th October, 1977, to 30th June, 1978. Against the orders of assessment passed by the Sales Tax Officer, the assessee filed appeals on 29th April, 1982. On the same date, the assessee sent a letter to the appellate authority that as the assessee was filing a writ petition before the High Court in connection with the imposition of tax, the amount of tax as required by Section 38(3) of the Act, was not being paid. On 30th April, 1982, the Deputy Commissioner of Sales Tax issued a notice to the assessee to show cause why the appeal be not dismissed as copies of challans in proof of the payment of tax, as required by the provisions of Section 38(3) of the Act, were not filed along with the memorandum of appeal. On 27th May, 1982, the amount of tax was deposited by the assessee under protest and copies of the challans in that behalf were produced before the Deputy Commissioner. On 28th June, 1982, the appeals were heard by the Deputy Commissioner of Sales Tax and were dismissed by orders dated 30th June, 1982, on the ground that the memoranda of appeals filed by the assessee were not accompanied by the copies of challans in proof of payment of tax, as required by Section 38(3) of the Act read with Rules 57 and 58 of the Rules, framed under the Act. Aggrieved by the orders passed by the Deputy Commissioner of Sales Tax, the assessee filed second appeals before the Tribunal. The Tribunal upheld the orders of dismissal. Hence, at the instance of the assessee, the aforesaid two questions of law have been referred to us for our opinion.
4. Shri Chaphekar, the learned counsel for the assessee, contended that under the provisions of Section 38(3) of the Act, the appellate authority was directed not to admit the appeals unless the tax with penalty in respect of which the appeals had been filed, had been paid ; that non-compliance with the provisions of Rules 57 and 58 could not result in automatic dismissal of the appeals, that the appeals were heard on 28th June, 1982, on the question of admission and that as the assessee had by that time paid the required tax and produced challans in proof of payment of tax, the appellate authority was not justified in summarily dismissing the appeals for non-compliance with the provisions of Section 38(3) of the Act and the Rules made thereunder. Reliance was placed on the decisions in Lakshmiratan Engineering Works Limited v. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range, Kanpur AIR 1968 SC 488 and Babulal Mohanlal Kandele v. Commissioner of Sales Tax, M.P. 1980 MPLJ 504.
5. In reply, Shri Joshi, the learned Government Advocate, contended that payment of tax before or at the time of filing of the appeal was mandatory, that the provisions contained in Rule 58(3) that if proof of payment of tax before filing of the appeal was furnished after the filing of the appeal, the appellate authority could readmit the appeal, reinforced the contention that payment of tax prior to or at the time of filing of the appeal was mandatory and that the appeals were rightly dismissed as the assessee had failed to pay tax prior to or at the time of filing of appeals.
6. It is significant to note that Section 38(3) of the Act uses the expression "admit". The appellate authority is directed not to admit the appeal unless the tax or penalty in respect of which the appeal has been preferred, has been paid in accordance with the provisions of Section 38(3) of the Act. As held by the Supreme Court in Lakshmiratan Engineering Works Limited v. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range, Kanpur AIR 1968 SC 488, the words "admit" and "entertain" in contrast to the word "file" refer to the stage when the appeal comes for consideration. A Division Bench of this Court has held in Babulal Mohanlal Kandele v. Commissioner of Sales Tax, M.P. 1980 MPLJ 504 that the appellate authority should consider the question of compliance with the condition of deposit of tax on the date, when it last takes up the appeal for consideration of admission. In the instant case, it was only on 28th June, 1982, that the appellate authority heard the assessee on the question of admission and it is common ground that before that date, the assessee had complied with the requirement of payment of tax, as contemplated by Section 38(3) of the Act. All that had taken place on 30th April, 1982, was that the appellate authority had issued notices to the assessee to show cause why the appeals be not dismissed for non-compliance with the provisions of Section 38(3) of the Act. It was on 30th June, 1982, that the appellate authority decided not to admit the appeals and passed orders of dismissal.
7. Our attention was invited by the learned Government Advocate to the provisions of Sub-rule (3) of Rule 58. Now Rule 58 reads as under :
58. Summary rejection.-(1) If the memorandum of appeal or application for revision does not comply with all or any of the requirements of Rule 57, or the appellant fails to pay in accordance with the provisions of Sub-section (3) of Section 38 the tax with penalty, if any, in respect of which the appeal has been preferred, the appeal or application for revision may be summarily rejected :
Provided that no appeal or application for revision shall be summarily rejected under this Sub-rule unless the appellant or applicant is given such opportunity as the appellate or revising authority thinks fit to amend such memorandum of appeal or application for revision so as to bring it into conformity with the requirements of Rule 57.
(2) An appeal or application for revision may also be summarily rejected on any other ground, which should be reduced to writing by the appellate or revising authority:
Provided that before an order summarily rejecting an appeal or application or revision under this Sub-rule is passed, the appellant or applicant shall be given a reasonable opportunity of being heard.
(3) Where an appeal is summarily rejected under Sub-rule (1) on the ground that the appellant had failed to pay in accordance with the provisions of Sub-section (3) of Section 38, the amount of tax and/or penalty in respect of which the appeal has been preferred, the appellate authority may, where it is subsequently brought to its notice that the said amount was paid before filing the memorandum of appeal but the proof of payment was not furnished therewith, readmit the appeal.
From a perusal of Sub-rule (1) of Rule 58, it is clear that the appellate authority is not competent to summarily reject an appeal for non-compliance with the requirements of Rule 57 without giving opportunity to the assessee to bring the appeal into conformity with the requirements of Rule 57. Sub-rule (3) of Rule 58 deals with the powers of the appellate authority to review its order of summary rejection. That provision cannot be pressed into service for holding that unless tax in respect of which the appeal is filed, has been paid prior to or at the time of filing of the appeal, the appellate authority has no option but to dismiss the appeal. If the stage of admitting an appeal comes later to the stage of filing the memorandum of appeal, as held by this Court in Babulal Mohanlal Kandele v. Commissioner of Sales Tax, M.P. 1980 MPLJ 504, it cannot be held that the Tribunal was justified in holding that the tax should have been paid by the assessee before or at the time of filing of the memoranda of appeals.
8. For all these reasons, our answers to the two questions referred to us are in the negative and against the department. In the circumstances of the case parties shall bear their own costs of these references.