Patna High Court
Commissioner Of Sales Tax vs Ganesh Abhushan Bhandar on 28 January, 1966
Equivalent citations: [1968]22STC12(PAT)
JUDGMENT
Mahapatra and S.N.P. Singh, JJ.
1. This is a reference under Section 25(1) of the Bihar Sales Tax Act, 1947, at the instance of the Commissioner of Sales Tax, Bihar. The relevant period involved in the assessment out of which this reference arises was the 1st of April, 1956, to the 30th of July, 1958. The assessment was under Section 13(5) of the Act on the 16th of March, 1960, and having aggrieved by that he preferred an appeal before the Assistant Commissioner of Commercial Taxes on the 16th of September, 1960, but he had not, by that time, deposited twenty per cent, of the tax levied on him as required under Section 24(1). The appellate authority called upon him to give proof of the payment of the required amount of tax on the 11th of October, 1960. He was also reminded in that respect on the 9th of November, 1960. On the 10th of December, 1960, he produced a challan before the appellate authority in proof of his payment of Rs. 100 towards the sales tax and asked for time to pay the balance. The Assistant Commissioner, however, did not feel satisfied with the grounds made out by the assessee and he refused to give any further time to him- to make up the deficit in payment of the required amount of sales tax as a condition relating to the filing of his appeal against the assessment. He struck off the memorandum of appeal on that ground on the same day. Before the 5th of January, 1961, the assessee, however, paid the balance of the twenty per cent, of the tax and approached the appellate authority with an application to restore the appeal, in other words to review the order passed by him on the 10th December, 1960, rejecting the memorandum of appeal. The Assistant Commissioner again did not feel satisfied with the grounds mentioned by the assessee and refused to review his previous order. The assessee went in revision before the Deputy Commissioner of Commercial Taxes but without success. He approached the Board of Revenue where he was able to evoke their sympathy and got an order on 28th December, 1961, in his favour by which the appeal stood restored. The department asked for a reference and three questions were formulated for consideration of this Court as follows :-
(i) Whether the appellate authority was required by law to exercise its discretion in granting time to the appellant to enable him to deposit the required amount of the tax under the proviso to Section 24(1) of the Bihar Sales Tax Act before hearing the appeal as has been held by the Board?
(ii) Whether the order of the Assistant Commissioner dated 10th December, 1960, striking off the appeal for not complying with the requirements set out in the proviso to Section 24(1) of the Bihar Sales Tax Act, 1947, is valid in law?
(iii) Whether the order of the Board dated 28th December, 1961, restoring the appeal and directing it to be heard on merits is in accordance with law?
2. Section 24 of the Bihar Sales Tax Act, 1947, to be referred to hereafter as the Act, provides for appeal, revision and review. In Sub-section (1) it is stated that no appeal shall be entertained by the authority unless he is satisfied that twenty per centum of the tax assessed or such amount of the tax as the appellant may admit to be due from him whichever is greater, has been paid. In Sub-section (2) it is provided that every appeal shall be presented within 45 days of the receipt of the notice of demand issued under Sub-section (4) of Section 14 but the authority before whom the appeal is filed may admit an appeal after the expiration of the said period if he is satisfied that the appellant has sufficient cause for not presenting the appeal within that period. Reading these two sub-sections there cannot be any doubt about the powers of the appellate authority to entertain an appeal beyond the prescribed period of limitation on being satisfied about the sufficiency of cause preventing the appellant from filing the appeal in time. If the appeal is filed within the prescribed period but the required amount of tax is not deposited by him, before the memorandum of appeal is presented but paid later within the period of limitation there will be no defect for which the appeal shall not be entertained. It will make no difference whether payment of tax is made prior or subsequent to the filing of the appeal if such payment is within the prescribed period of limitation and the filing of the appeal is also during that period. Suppose an assessee prefers an appeal within 45 days and asks for time to pay the required amount of tax as provided under the proviso to Sub-section (1) of Section 24 and the appellate authority is satisfied that there is sufficient cause shown by the assessee for extension of such time, he can grant time as he may think it necessary for payment of the tax. That will be also in the process of admission of an appeal after the expiration of the prescribed period of limitation. The discretion given in Sub-section (2) to Section 24 will include such circumstances.
3. In the present case, when an application was made for time to pay the tax on the 10th December, 1960, before the Assistant Commissioner of Commercial Taxes it was open to that authority either to grant or to refuse the prayer on a judicial consideration of the facts brought to his notice by the appellant. There cannot be any hard and fast rule as to how the discretion is to be exercised. That will depend upon the circumstances of each case. If the appellate authority refused to grant any time which would mean that he refused to admit the appeal because it was not properly presented in the sense that the required amount of tax was not paid within the prescribed period of limitation, that cannot be said not being exercise of the powers vested in him under Section 24, Sub-sections (1) and (2). No doubt that order is revisable by the higher authorities. That order is also reviewable by the same authority.
4. Sub-section (5) to Section 24 lays down that subject to such rules as may be prescribed, any order passed under this Act or the rules made thereunder by any person appointed under Section 3 may be reviewed by the person passing it or by his successor-in-office. Under this provision, the appellant came before the Assistant Commissioner of Commercial Taxes on the 5th of January, 1961, with a petition for review of the order passed by him on the 10th of December, 1960, stating that he had already deposited the required amount of tax and also bringing to the notice of that authority the difficulties and handicaps under which he was not able to make the deposit within the prescribed period or within the time given by the appellate authority previously. As stated before, the Assistant Commissioner did not feel satisfied to review his own previous order and rejected the petition of the appellant-assessee on the 5th of January, 1961. This again was completely within his jurisdiction and the order was consistent with the provisions of law. Yet, that very order was also subject to revision by the higher authorities as provided under Rule 36, Clause (5), which reads as follows :
(a) The Commissioner may, of his own motion, revise any order passed by the Deputy Commissioner, Assistant Commissioner, Superintendent or Assistant Superintendent, and the Board of Revenue may, likewise, revise any order passed by the Deputy Commissioner or Commissioner.
5. When the assessee approached the Deputy Commissioner he refused to revise the order passed by the Assistant Commissioner. This order was made on the 31st of March, 1961. Against that, the assessee moved the Board of Revenue which was also competent to revise the order of the Deputy Commissioner. In exercising that power, the Board rescinded the order of the Deputy Commissioner and opined that the Assistant Commissioner should have entertained the appeal when the difficulties were pointed out to him by the appellant in the matter of depositing the required amount of tax. It is not necessary for us to examine the reasonableness of that order. The power of revision is bestowed by the Act on the Board of Revenue and is very wide and not circumscribed by any conditions. In that view, the Board was within its power to take view of the facts and circumstances of the case and to revise, if it thought necessary, the order passed by its subordinate authority, namely, the Deputy Commissioner. The Board's order as we understand, really means this that the Deputy Commissioner in exercise of his revisional powers should have, in the circumstances of the present case, set aside the order of the Assistant Commissioner of Commercial Taxes refusing to review his order as passed on the 10th of December, 1960, striking off the memorandum of appeal of the assessee. It cannot be said that the order passed by the Board in the present case was without jurisdiction or was invalid otherwise. In that view, the only answer to the third question which, in our opinion, is the important one in this reference must be in the affirmative.
6. Coming to the second question whether the order of the Assistant Commissioner dated 10th December, 1960, striking off the appeal for not complying with the requirement set out in the proviso to Section 24(1) of the Bihar Sales Tax Act, 1947, is valid in law, the answer also will be in the affirmative. It was valid in law so far as that authority was concerned but, none the less, it was subject to revision by the Deputy Commissioner.
7. The first question as framed is whether the appellate authority is required by law to exercise its discretion in granting time to the appellant to enable him to deposit the required amount of the tax under the proviso to Section 24(1) of the Bihar Sales Tax Act, As we have already indicated, Sub-section (2) of Section 24 gives the power to exercise such discretion and that discretion is in relation to presentation of the memorandum of appeal and its admission for hearing which also includes the payment of the required amount of tax. There is virtually no difference between excusing the delay in presentation of appeal and extending time for completing the presentation either by payment of the required amount of tax or by furnishing necessary particulars in the prescribed form of appeal. In one case, the discretion is exercised after the period of limitation and in the other, before the end of that time. The purpose and effect is the same in both the cases. Filing a defective appeal within the period of limitation is not a proper presentation. When the defects are removed, the appeal comes to the stage of being "entertained". If by that time the period of limitation expires and the appeal is entertained, the appellate authority does so on condonation of the delay in its discretion.
8. This reference is disposed of as stated above. In the circumstances of the case, there will, however, be no order for costs.